THE UNIVERSITY 
 
 OF ILLINOIS 
 
 LIBRARY 
 
 552. 
 
 B8T5 
 V.27
 
 A VIEW 
 
 OF TH E 
 
 MONEY SYSTEM OF ENGLAND, 
 
 FROM THE CONQUEST ; 
 
 WITH PROPOSALS FOR 
 
 ESTABLISHING A SECURE AND EQUABLE 
 
 CREDIT CURRENCY. 
 
 BY JAMES TAYLOR. 
 
 " Above all things good policy is to be used, that the treasure and monies in 
 a state be not gathered into few hands ; for otherwise a state may have a good 
 stock and yet starve ; and money is like muck, no good except it be spread." 
 
 Bacon. 
 
 LONDON: 
 
 PRINTED FOR JOHN TAYLOR, 
 
 ISoolteeller anti Publiel^ei- to t!)e JDnibrreits of 3Lonttoii; 
 
 30, UPPER GOWER STREET. 
 
 AND SOLD BY J. DUNCAN, PATERNOSTER ROW; HESSEY, FLEET STREET; 
 AND HATCHARD & SON, PICCADILLY. 
 
 1828.
 
 London : 
 
 I'rinted by Littlewood & Co. 
 
 15, Old Bailey.
 
 
 ADVERTISEMENT. 
 
 About two years ago the Author of these remarks published 
 a little pamphlet, entitled, " No Trust, no Trade." It was 
 soon afterwards out of print, and he was urged to bring out 
 a second edition. But having found from subsequent dis- 
 cussions that information was wanted upon the subject, rather 
 than argument, he has, in the following pages, incorporated 
 the substance of his former pamphlet, in a general View of 
 the History of English Money from the Conquest to the 
 present time, and of its effects at various periods upon the 
 condition of the English people. The historical facts brought 
 forward are generally of such notoriety to the readers of 
 English history, that he has thought it needless to encumber 
 the work with formal references. He has only had to show 
 the order in which certain events succeeded certain changes 
 in the money system. For the records which more immedi- 
 ately relate to money, and which are not so generally known, 
 he would refer to Tindal's " Notes on Rapin's History," 
 Leake's " Historical Account of English Money," and Ru- 
 ding's " Annals of the Coinage." To the latter work he 
 feels himself much indebted for a great number of important 
 documents and interesting particulars. 
 
 Bakewell, May, 1828. 
 
 359358 
 
 A 2
 
 A VIEW 
 
 MONEY HISTORY OF ENGLAND. 
 
 WILLIAM THE FIRST. 
 
 When William had accomplished the conquest of England, 
 he ordered an exact survey and valuation to be made of all 
 the lands in the kingdom, recording their proprietors, tenures, 
 the quantity of pasture, w^ood, and arable land which they 
 contained, and generally the number of tenants, cottagers, and 
 slaves who lived upon them. Having obtained the nation by 
 conquest, he regarded every man as his steward, liable to ren- 
 der an account to him of whatever he possessed. 
 
 It is also recorded that he brought the Jews from Rouen into 
 England, and that he adopted the present method of account : 
 viz. that of reckoning by pounds, shillings, and pence, or by 
 pounds, ounces, and pennyweights. The pound weight of 
 silver constituted the pound, which was divided either into 
 12 shillings composed of 20 pennies each, or 20 shillings 
 of 12 pennies ; but it was not till some reigns afterward 
 that it obtained the denomination of the pound sterling. 
 The shilling, like the pound, was probably money of account. 
 The only piece of money known to be current as coin was the 
 denarius, or penny, the value of which, estimated according 
 to the proportion it bore to the pound weight of standard 
 silver, was as 1 to 240, or did. about of our present money.
 
 William having obtained an exact inventory of all the 
 property and treasure in his kingdom, knew^, as one of our 
 historians says, of how much wool his English flocks 
 might be fleeced ; and it is generally believed that the flocks 
 were shorn pretty closely under his dominion. There was, 
 however, this advantage to his subjects, — their payments were 
 generally made in kind, and according to their means. If he 
 demanded the material of money from those who had it, he 
 took something else from those who had it not. The nobles or 
 highest class of his subjects were called upon for military 
 service. The tenants of socage lands and demesnes were re- 
 quired to perform work, and to supply provisions. Sometimes 
 they were called upon to furnish articles of luxury, as horses, 
 dogs, and birds of game, or, as the language of that time ex- 
 presses it, palfreys, destriers, chaseurs, leveriers, hawks, &c. 
 Upon various occasions certain fines or forfeitures were de- 
 manded : for instance, when the king's tenant ^V/cffp^7e died, 
 the king held possession of his estates until the son had done 
 homage, and was of age ; the king receiving, in the meantime, 
 all the proceeds of the land ; and when the estates were re- 
 delivered to the son, if he were an earl, he was required to 
 present to the king eight horses saddled and bridled, four hel- 
 mets, four coats of mail, four shields, four spears, four swords, 
 four chaseurs, and one palfrey bridled and saddled : this 
 was called the relief, or re-delivery of the estates of an earl. The 
 relief of a baron was half as much, with a palfrey. That of a 
 vavasor to his lord consisted of his best horse, his helmet, coat 
 of mail, shield, spear, sword ; or in lieu of these, a hundred 
 shillings : that of the countryman, his best beast ; and of him 
 that farmed his lands, a year's produce. It is observable that 
 these, and the like sources of revenue, of which there were 
 many, admitted of being fulfilled without the intervention of 
 any money. The vavasor, it is true, was expected to give a 
 hundred shilUngs for his relief, in lieu of his best horse, &c. ; 
 but if he had not a hundred shillings conveniently at his
 
 disposal, the alternative was easy for him. Conformably with 
 this arrangement, it may be supposed that saddlers, smiths, 
 tailoi^, shoemakers, &c. were attached to every large establish- 
 ment, where, in return for their labour, they were fed and 
 clothed at their lord's expence. Among persons of inferior 
 rank the exchange of commodities would be chiefly effected 
 by barter : and the king maintained his soldiers by quartering 
 them upon such of his subjects as had wherewithal to support 
 them. Little or no money therefore w ould be required by the 
 common people, nor was it very essential to those of rank. 
 
 But although there appeared to be so little actual ne- 
 cessity for money, William seems to have been aware of its 
 power and convenience. On this subject he had probably 
 learnt something from the Jews whom he had brought into 
 England. He took especial care to extract from his subjects 
 as much of the precious metals as he could, without quite de- 
 priving them of all inducement to get them back again ; and 
 for this purpose purveyances were gradually more and more 
 changed into money. It is on record that they were afterwards 
 collected by the sheriff in the following proportions : bread for 
 one hundred men was to be commuted for with one shilling ; 
 a pasture-fed ox one shilling ; a ram or sheep fourpence ; 
 provender for twenty horses fourpence. It is obvious, that as 
 under this arrangement, in the payment of all tributes to 
 government, a pasture-fed ox, or bread for one hundred men, 
 and one shilling, would stand as the exact equivalent for each 
 other, and for other things after the like pi-oportion, so, who- 
 ever had the means of gaining possession of the silver would 
 have the means of getting these commodities, provided the pay- 
 ment of tributes to government were so kept up as to make it 
 incumbent on the people to pay the one or other of the above 
 equivalents. William had the power within himself of accom- 
 plishing both these ends. The Doomsday survey furnished 
 him with an exact estimate of the money it was possible to 
 draw out of the hands of his subjects; and his absolute sway
 
 8 
 
 furnished him with the means of taking possession of that 
 money by violence if he chose ; but had he done this he would 
 have destroyed the inducement which the people would other- 
 wise have to get it again : he therefore wisely drew it from 
 them, by making it their interest to give it to him voluntarily, 
 as an acquittance from some obnoxious duty or more burthen- 
 some forfeiture. Thus, the vavasor who had a hundred shil- 
 lings at command, would no doubt gladly pay it for the relief 
 of his estates, rather than have the mortification and trouble 
 of giving up his best horse, and providing himself with ano- 
 ther coat of mail, helmet, sword, &c. ; whilst the hundred 
 shillings, being endowed with power to acquit the vavasor 
 from such a tax, would gladly be received by the nobleman, 
 as a means of commutation for the services and provisions 
 which the king demanded of him. Hence, also, merchants 
 who could send English produce abroad and bring silver back, 
 had a market at home ready for it. The same view holds good 
 with respect to one who had bread to provide for a hundred 
 men: a shilling being made the equivalent, he that had the 
 shilling would doubtless give it in lieu of so troublesome a 
 payment in kind. This, it is obvious, would be done upon 
 the same principle as that which induces the farmers now 
 to pay their tithes generally in money. The tithe collector 
 finds it much more convenient to receive money than pro- 
 duce ; he therefore offers to take, as a commutation, such a 
 sum as the farmer knows to be of somewhat less relative 
 value in the market than the hay, corn, or wool which he 
 must otherwise give, and therefore he sells his goods, and 
 gives money to the tithe collector. Upon this principle, there- 
 fore, William got his wants supplied. He fixed the rate 
 at which he would receive money as a commutation for 
 services or purveyance, and this gave the coin payable as 
 tribute its circulating value. Having an exact knowledge 
 of his subjects' stores, he well knew how to proportion 
 the commutation, so as to secure himself in the receipt of
 
 9 
 
 a large share of their precious metals ; and this being done, 
 Jie had only to take his moneyers with him wherever he 
 went, for the purpose of coining, and his wants were sure 
 of being supplied. Agreeably to this view, the money of 
 those early days is often found to have been coined even in 
 villages, wliere it happened that the king had staid. 
 
 Thus the money system of the Conqueror was rather cal- 
 culated to be a convenient mode of taxation, or of collect- 
 ing a revenue through the willing agency of tlie people, 
 than a system of currency, though it is obvious that a cur- 
 rency system would very naturally grow out of it. This may 
 be illustrated by what has happened in our own times, if we 
 observe the operation of our credit system, as it existed under 
 the Bank Restriction Act. The government was empowered 
 by parliament to enforce payment of a given number of mil- 
 lions of pounds sterling from the people for the forthcoming 
 year. The bank note was authorized by law to represent the 
 pound sterling. Payment of the money was then anticipated 
 by exchequer bills ; the Bank of England gave their pro-r 
 missory notes to government for the exchequer bills; with 
 the promissory notes of the Bank of England the govern- 
 ment purchased their stores from the people ; and the people 
 were content to take those notes for the produce of their 
 labour, &c., because the government was pledged to take them 
 again for taxes. The notes, after performing a long round of 
 circulation, viz . from the government to the contractor ; from 
 the contractor to the factor ; the factor to the manufacturer ; 
 from him to the various workmen employed ; and from them 
 to the butcher, baker, &.c. who paid them to the farmer, and 
 he to the landowner ; found their way back to government 
 through the direct or indirect taxes of all these people. And 
 with the bank notes thus returned to government, the ex- 
 chequer bills ought to have been redeemed. 
 
 Our view begins with the state of money in the reign of 
 William the Conqueror, because from that period to the pre-
 
 10 
 
 sent we have an uninteiTupted record of its history. But 
 prior to his time, a similar system appears to have prevailed, 
 even to the first subjugation of this country by the Romans. 
 Caesar says that the Britons had no money; but that pieces 
 of brass and iron were esteemed valuable among them ac- 
 cording to their weight, and that these supplied the place of 
 coin. Such pieces of metal were useful as objects of barter, 
 but they would serve equally for money. 
 
 Camden thinks that after the arrival of the Romans in this 
 Isle, the Britons imitated them in their coins ; that this 
 sort of money did not pass current in the way of trade, but 
 was at first coined for some special purpose ; and that after 
 Caesar had imposed a tribute upon the Britons, and they 
 were afterwards oppressed with customs, and other taxes for 
 corn-grounds, plantations, groves, pasturage of greater and 
 lesser cattle, such coins were first stamped for these uses : 
 for greater cattle with a house, for lesser with a hog, for woods 
 with a tree, for corn-grounds with an ear of corn ; those 
 with a man's head for poll-money. I have thought (says he) 
 that in old times there was a certain sort of money coined 
 on purpose for this use, seeing in Scripture it is called tribute 
 money ; and I am the more confirmed in this opinion, be- 
 cause in some of the British pieces there is the Mint master 
 stamping the money with Tascia, which, among the Britons, 
 signifies a tribute penny. But if this money was first coined 
 for the express purpose of tax or tribute, it afterwards came 
 into common use. 
 
 The money of William being accompanied with the alter- 
 native of payment to the crown in kind, if the people pre- 
 ferred it, was properly taxation money. It received its value 
 from the obligation which was imposed upon the people, 
 either to pay the tax in kind, or to pay a piece of money 
 which the king would receive in acquittance of that tax. 
 Under a patriarchal system, whilst no taxes were paid and 
 no taxation money existed, the precious metals would be ex-
 
 11 
 
 changed purely on the barter system ; and no man being 
 compelled to acquire specie, a fixed value, of course, would 
 not be assigned to it. But under a monarchy, when taxes 
 were imposed and every individual had to provide not merely 
 for his own wants, but also for his share of the wants of the 
 king, — as each man must give the required portion of his 
 property or personal services, or something which the state 
 agrees to receive in lieu of that property or personal service, — 
 so money would then be of positive value, equal to the 
 worth of that which it represented. In the time of the Con- 
 queror, we have seen that a pound weight of standard silver 
 (or proportions thereof, duly stamped by the king's moneyer,) 
 was made to possess this representative value ; but whilst ac- 
 companied with the alternative of payment in kind, the pro- 
 duction of such money as a tax could never be onerous to 
 the people ; because no one had the power to enhance its 
 value beyond that of the service or sacrifice for which it was 
 held to be an equivalent. 
 
 WILLIAM THE SECOND. 
 
 William the Second continued to act upon the same money 
 system as his father: but he possessed neither the know- 
 ledge nor the prudence which distinguished the Conqueror ; 
 nor could he have so correct an idea of the relative wealth 
 of his subjects ; because, in the nature of things, their con- 
 dition would undergo a change, and, by the operation of the 
 money system itself, that part of the people's wealth, which 
 consisted of the precious metals, would be transferred to other 
 hands. It is true that he had the advantage of entering into 
 possession of his father's store ; but this he soon squandered ; 
 and when it was gone he was put to his wits to find the means 
 of getting it back again. To meet his necessities, money
 
 12 
 
 commutations came too slowly in : but to make amends for 
 this, he greatly increased the rate of them wherever he could. 
 It is stated by Ordericus Vitalis, that in the 10th year of his 
 reign, he got 3,000 pounds from Robert de Belesme, earl of 
 Arundel and Shrewsbury, upon the death of his brother Hugh 
 de Montgomery, as a relief for the said earldom, whereas, a 
 short time before, 6,666 pounds is stated to have been the pur- 
 chase money of the dukedom of Normandy. Upon another 
 occasion he had recourse to the following expedient, to sup- 
 ply himself with money. He gave orders that 20,000 men 
 should be raised with all possible speed. In raising this army, 
 those were purposely selected to whom it was particularly in- 
 convenient to leave their families and occupations. When 
 these levies were going to embark, the king's treasurer told 
 them by the king's order, that they might every man repair to 
 his own home upon the payment of ten shillings each. The 
 soldiers being all willing to be dismissed upon such terms, 
 paid the money, and so William raised by the manoeuvre 
 £10,000. 
 
 Malmsbury says, that the taxes imposed upon the land in 
 this reign were so heavy, that the farmers abandoned tillage, 
 and a famine ensued. 
 
 HENRY THE FIRST. 
 
 These modes of taxation were harassing enough, but not 
 intolerable, since the demands of money continued to be ac- 
 companied, at least ostensibly, with the alternative of pay- 
 ment in kind, or personal service ; the choice of this alter- 
 native, although the benefit of it was at the time not duly 
 appreciated by the people, gave to the money system of that 
 day a character of equity, which was lost when payment in 
 money alone was afterwards rendered imperative.
 
 13 
 
 But the uncertainty which every man felt in his tenure, 
 when all his possessions were held at the pleasure of the king, 
 and the liability of the people to have soldiers quartered upon 
 them, and to be called on to supply the necessaries of war or 
 the luxuries of the state at the mere will of the monarch, 
 prepared the nation to regard as a benefactor Henry, the 
 brother and successor of William II., who, to secure a 
 crown irregularly obtained, granted to the people a charter, 
 the immediate design of which was, to render their posses- 
 sions more secure, and their contributions to the state appa- 
 rently more definite. As a part of this definite system, the 
 provisions of the king's household, which were accustomed to 
 be furnished in kind, were now rated at certain prices, and 
 collected in money. Beneficial as the definite contribution 
 might be to those who knew how to make the best use of it, 
 the absolute money system which grew out of it presently 
 became to the bulk of the people an instrument of great op- 
 pression. Whilst they were required to supply stores, which 
 they had the option of commuting for money, if more conve- 
 nient to themselves, they were safe from the demand being 
 carried much beyond the occasion ; for a superfluity of sheep 
 and oxen would have been almost as inconvenient to the 
 king's establishment, as the not having enough ; but the case 
 was altered when money had become the unconditional repre- 
 sentative of supplies in kind. Then, to accumulate money 
 was to accumulate sheep, oxen, bread, clothing, &c. in ad- 
 vance, without the trouble, in the meantime, of taking care of 
 them ; and to have power, thus obtained, over the necessaries 
 of life, brought the property of the people more under the 
 king's control than the sword could bring it. 
 
 Henry appears to have understood how to manage this sys- 
 tem for his own aggrandizement. His forte was to get money : 
 for want of the like tact, his brother Robert was ruined by 
 him. Having by the charter, and his fair promises to the 
 people, secured himself in the possession of the crown of Eng-
 
 14 
 
 land, he pretended to be forced to go to war with the two 
 tyrants of Normandy, (as they were called,) viz. Robert de 
 Belesme and the Earl of Mortaigne. On this ground he 
 oppressed his own subjects by an exorbitant tax, although the 
 object was one in which it was notorious that the English had 
 not the least concern. Notwithstanding the charter, and his 
 promises to the people, " this tax (says Rapin,) was levied 
 with all imaginable rigour, even to the imprisoning and 
 plaguing various ways such as had refused, or had not tohere- 
 withal to pay it." As soon as his preparations were finished, 
 he passed into Normandy with a numerous army, carrying 
 with him large sums of money, with which he bribed the no- 
 bles and governors of castles. Amongst other means which 
 he employed for amassing wealth, it is recorded, that when 
 Anselm Archbishop of Canterbury died, Henry kept the re- 
 venues of the archbishoprick to himself for five years. On 
 another occasion, he yielded to the Pope a power to prevent 
 the clergy of England from marrying, and afterwards obtained 
 for himself authority to execute the decrees of the church 
 against the clergy, not, as it appears, to prevent them from 
 marrying, but to make money by it. For when he became 
 invested with the Pope's authority, he gave the priests leave 
 without scruple to keep their wives, upon paying him money 
 for a dispensation ; and when it is recollected how much the 
 superstition of those days favoured the priests in acquiring 
 wealth, it is probable that this was to Henry a fruitful source 
 of revenue. The marriage of his daughter also furnished 
 him with a pretext to extort money very largely from the 
 people. At that time he levied a tax of three shillings on 
 every hide of land, which was thought an immense burden. 
 
 Henry soon made it apparent, that under a king who 
 was a shrewd money-scrivener, and an ambitious man, an 
 absolute money system, compared with the absolute military 
 power of the Conqueror, was infinitely superior as a means of 
 oppression. William, it is true, knew of how much wool he 
 could fleece his English flocks ; but then, like a prudent shep-
 
 15 
 
 herd, he was satisfied with the fleece, — he seldom, or never, 
 touched the carcase. He considered every man in the king- 
 dom bound to pay according to what he had ; but it does not 
 appear that he ever demanded that which his subjects had not. 
 
 Now, however, under the refined art of Henry's absolute 
 money system, the people were liable to be imprisoned and 
 punished for not complying with impossible demands. After 
 this experience, which was in the early part of Henry's reign, 
 the people coidd no longer remain ignorant of the supreme 
 importance of money. The prudent hoarded the good coin, 
 and the ingenious supplied its place with bad, which the ab- 
 sence of better caused for some time to be tolerated in the 
 circulation, till in the end, Henry, who was in Normandy, 
 finding his money would not pay for so much as it formerly 
 did, sent orders that the severest sentence of the law should 
 be inflicted upon all his moneyers, and this sentence was ac- 
 tually executed on ninety-four persons. After this he had 
 recourse to a new coinage, which was a new evil, for one of 
 the old chroniclers tells us, " by thus changing the money, all 
 things became most dear, whereof a right sore famine ensued." 
 
 It is remarkable that to the changing of the money is 
 attributed the dearness of provisions, and the dearness of pro- 
 visions (not the scarcity of them) is made the cause of the fa- 
 mine. Thus the case of the poor people of that day was veiy 
 much like that of the weavers of Lancashire in 1826. If they 
 could get money they could get food, but if they could not 
 get money, it was all the same as a famine to them. The 
 change of the money being assigned as the cause of the dear- 
 ness of provisions, renders it probable that the dearness of 
 provisions did not consist in an increased nominal price, but 
 in the greater specific value of the coin, and the consequently 
 increased difficulty of obtaining it. So in our own time, com- 
 paring the money value of bread now, with the money value 
 of it some years ago, it is cheaper now than then ; but com- 
 paring it with the relative means which the common people
 
 16 
 
 possess of obtaining the money which commands bread, it i* 
 considerably dearer now. 
 
 When Heniy died, he is recorded to have left £100,000 in 
 his treasury, and no doubt, from the character of the man, it 
 was all in money of full weight ; each pound a pound weight 
 of silver. 
 
 Thus we see that the foundation of an absolute money sys- 
 tem was begun in a series of measures which made it the in- 
 terest of the people voluntarily to pay tribute in money rather 
 than in kind, wherever they could, and that it was completed 
 in the reign of Henry the First. We have seen that in the 
 outset it became a means of the most galling oppression (the 
 people being punished for what they could not help), the 
 ground of the most sanguinary executions, and the cause of 
 ** a right sore famine." Such were the early consequences of 
 the absolute money system. The subsequent history of our 
 country shows, that from that time to the present it has been 
 a continual source of perplexity to the crown, and of injury to 
 the people; of perplexity to the crown, when a prince reigned 
 who knew not the art of managing this instrument of taxation 
 and tyranny to his own advantage, for then he was sure to be 
 outwitted by some of his wealthy subjects, though at the peril 
 of their lives ; of invariable injury to the people generally hy 
 whomsoever the issues were controlled. 
 
 STEPHEN. 
 
 The circumstances under which Stephen came to the 
 throne soon forced him to distribute among his followers the 
 large stores of his predecessor and with this loss of money, 
 the crown in his hands was shorn of some of its power. 
 Stephen understood not the mystery of money. His necessi- 
 ties induced him to lend the royal sanction to its debasement,
 
 17 
 
 and thus did that measure receive the sanction of the crown 
 in this reign, which in the preceding had subjected ninety- 
 four persons to the severest sentence of the law. The disper- 
 sion of the treasure which Henry had accumulated ajfiforded 
 those into whose hands it passed, and who were aware of its 
 increasing power, an opportunity of hoarding it : the confis- 
 cations which took place in the next reign, and which were 
 very numerous, gave them an opportunity of purchasing the 
 forfeited estates with it ; and these confiscations thus became 
 the means of again drawing the money into the royal coffers. 
 
 HENRY THE SECOND. 
 
 In this monarch we have another prudent money-getting 
 king. One of our Historians, speaking of him, says the 
 chief taxation of his time was " when he took escuage* of 
 Englishmen towards his wars in France, which amounted to 
 12,000/. ; but confiscations were many, because there were 
 many rebellions, and every rebellion was as good as a mine." 
 Henry the Second appears to have well understood, and 
 highly appreciated the power of money, for there was found 
 in his coffers, when he died, no less then 900,000 pounds 
 weight of silver, besides plate and jewels. 
 
 One of the first consequences attendant on the introduc- 
 tion of an absolute money system, would be to check the 
 productions of nature, after they had arrived at a point a lit- 
 tle beyond the immediate wants of the people ; because to 
 produce more food, when that which was already in exis- 
 tence was more than enough for the present buyers, would 
 be only to reduce the money value of that stock which the 
 growers already possessed, and money, be it remembered, 
 under an absolute money system, alone constitutes value. The 
 
 * A fine in lien of military service. 
 B
 
 18 
 
 corn grower, therefore, would be tempted to hoard his money, 
 rather than to expend it in increasing the productions of the 
 soil ; and this would go on till the progressive increase of the 
 population, having at last overtaken the old average produc- 
 tion of the cultivated lands, a famine would ensue, and a 
 famine from this cause, unlike that arising from a temporary 
 interruption in the order of nature, would be some years 
 before it could be counteracted. This effect was produced ; 
 for in the next reign, it is recorded that a dearth did prevail 
 for three or four years, which occasioned so great a mortality 
 that the living scarce sufficed to bury the dead. This famine 
 continued until the population being decreased, and the stock 
 of food probably increased, the stock of food and the people 
 became at length proportioned to each other, and the evil was 
 for that time surmounted. 
 
 To be, however, the known possessor of money in those 
 days frequently subjected a man, upon almost any or no 
 pretext, to be attainted of some offence against the king or the 
 laws, for which his money was the forfeiture. Though the 
 king therefore might hoard with impunity, the only way which 
 the common man had of preserving the wealth which he could 
 accumulate, was by burying it, and this created another evil. 
 Mr. Ruding tells us in his Annals of the Coinage, that the 
 coins of Henry the Second were rare until a large quantity 
 of them happened to be found at Royston, about the year 
 1721, and a still larger hoard, to the amount of more than 
 5,700, at Tealby, in Lincolnshire, in 1807, and in all pro- 
 bability to this day considerable quantities remain concealed 
 in the earth. 
 
 RICHARD THE FIRST. 
 
 Henry the Second was followed by a succession of impro- 
 vident kings. In the reign of his son Richard a great famine
 
 10 
 
 was experienced, as we have already noticed. Added to this, 
 Richard so impoverished himself and exhausted his revenues 
 by the Crusade in which he was engaged, that when money 
 was afterwards required to be raised for the ransom of his 
 person, the clergy were forced to bring in their church plate, 
 and for a long time latten (pewter) was used in the place of 
 it. The Crusade, and the ransom together, so drained the 
 kingdom of money, and money was now become so essential 
 as a means of living, since every thing was made to bow 
 to it, that the richest, we are told, had enough to do to main- 
 tain themselves. We may imagine what a deplorable state 
 the lower classes must have been in, when such was the con- 
 dition of the highest ; and we cannot wonder that the common 
 people were ready to favor the sedition of William Fitzosborn, 
 sometimes called Longbeard, who, by advocating the cause of 
 the meanest of the people, is said to have gained the hearts 
 of the populace, and to have been held by them in extreme 
 veneration, insomuch that a rebellion was raised in the city of 
 London on account of a tax, the burden of which, Fitzosborn 
 shewed, would fall wholly on the poor. His fate, however, 
 shewed that it was veiy dangerous to be a patriot in those 
 days, for he was shortly afterwards hung in chains with nine 
 of his accomplices. His followers stole away his body and 
 buried it, and the superstition ran, that miracles were wrought 
 at his grave. Neither is it to be wondered at, that when the 
 poor were so oppressed, highwaymen and robbers, who attacked 
 the rich, but respected the poor and unprotected, should stand 
 high in the estimation of the community. To this cause was, 
 probably, owing the celebrity of Robin Hood and his party, 
 who lived in these times. 
 
 But great as the famine is stated to have been in this reign, 
 it would seem that corn was even then less scarce in England 
 than money; for it is stated by Hoveden, that during the fa- 
 mine. King Richard found ships at St. Valeri full of corn ex- 
 ported from England. This, doubtless, would not have been 
 
 b2
 
 20 
 
 the case, if the merchants could have got as much money for 
 the corn in England as abroad. Richard, however, did not 
 enter into their views, for he ordered all the people belonging 
 to those vessels to be hanged. 
 
 JOHN. 
 
 This prince finding himself thwarted in obtaining, by the 
 usual means, those heavy contributions which he wished to 
 levy, endeavoured to exact them by mere force. In the con- 
 flict, the church proved too shrewd, and the barons too strong 
 for him : he not only failed to attain his object, but after 
 being compelled to surrender the glory of his crown to the 
 pope, and the power of it to the barons, he at length died, 
 broken-hearted and unregretted. The unhappy Jews, however, 
 having nobody to stand up for them, felt the full weight of his 
 injustice. Matthew Paris says, those of both sexes were 
 seized all over England, and dreadfully treated, till they would 
 ransom themselves according to the king's pleasure. Among 
 the rest, a Jew at Bristol, though cruelly tormented, refusing 
 to ransom himself, the king ordered that his torturers should 
 every day pull out one of his cheek teeth, till he would pay 
 down 10,000 marks. Accordingly they pulled out seven in as 
 many days ; but on the eighth day he relented, and so, with the 
 loss of seven teeth, parted with 10,000 marks to save the rest. 
 This mode of getting money was obviously much more likely 
 to drive the money out of the kingdom, or into close hiding- 
 places, than to make the king rich, but it affords an illustra- 
 tion of the spirit in which King John would have levied his 
 exactions generally, if his power had been equal to his will.
 
 21 
 
 HENRY THE THIRD. 
 
 The influence which the pope obtained in England through 
 the weakness of king John was severely felt in the following- 
 reign. His holiness had discovered the conveniency, and pos- 
 sessed the power, of collecting his tenths in money. In 1229, 
 the thirteenth year of Henry the Third, it is recorded that 
 these payments were exacted with such severity, that 
 people were compelled to borrow money of the usurers, who 
 came over with the pope's nuncio, and the rate of interest 
 was about 60 per cent, per annum. It is very obvious, that 
 if the pope had been obliged to receive payments in kind, his 
 appetite would have been sooner satisfied, especially if the 
 produce were to have been conveyed to Rome ; but when 
 sheep, oxen, &c. were so conveniently capable of being repre- 
 sented by silver money, the aiiri sacra fames became insatiable. 
 The Italian money merchants, who were now introduced 
 into England by the pope's nuncio, were chiefly distinguished 
 from the Israelitish money merchants in that they enjoyed the 
 pope's protection ; whereas, those Jews who had conscience 
 enough publicly to adhere to the faith of their ancestors, were 
 left to the protection of the king. We have an illustration of 
 the nature of that protection in the twenty-fifth year of Henry 
 the Third. In that year writs were directed to the sheriffs of 
 each county, commanding them to return before him, at Wor- 
 cester, upon Quinquagesima Sunday, six of the richest Jews 
 from every town ; or two from those places where there were 
 but few. The professed object of this order was, that the 
 Jews might treat with the king upon matters concerning their 
 mutual benefit. This business, which was to be for the mu- 
 tual benefit of themselves and the king was, that the Jews 
 should give the king 20,000 marks. He afterwards let the 
 Jews out to farm to his brother Richard, Earl of Cornwall, 
 for a great sum of money, who was to make what more of them 
 he could ; and, truly, Richard seems to have been a shrewd
 
 22 
 
 manager of money matters, for when the pope would have 
 borrowed 500 marks of him, the earl replied, he liked not to 
 lend his money to one upon whom he could not distrain. 
 The Jews must have enjoyed a very unenviable protection 
 under such a farmer as Richard. 
 
 Hume says, Henry's great defects were want of economy 
 and an ill-judged liberality ; but if historians are to be 
 believed, his poverty gendered in him still greater defects, 
 rapacity and meanness. His ways to get money are thus set 
 forth by one of our them : " Never son was more like a 
 father in any thing than King Henry was like his father King 
 John, in this point, for raising money ; for he trod directly in 
 all his steps, if he added not something of his own. King 
 John had great subsidies granted him by parliament, for any 
 great action he undertook ; so had King Henry. King John 
 resumed the lands aliened from the crown ; so did King 
 Henry. King John made benefit of the vacancy of bishopricks 
 and abbeys ; so did King Henry. King John took great fines 
 of many for crimes not proved, but only supposed ; so did 
 King Henry. And John made benefit of a new seal ; so did 
 King Henry. King John extorted great sums from the Jews ; 
 so did King Henry. And one way more he had to get money, 
 which perhaps his father had not ; and that was by begging, 
 as he told the Abbot of Borough, it was more alms to give 
 money to him, than to the beggar that went from door to door." 
 But whatever rapacity Henry might manifest in his ways 
 of getting money from his subjects, his brother Richard, the 
 Earl of Cornwall, appears to have been much more deeply versed 
 in the mystery of money making. In the thirty-first year of 
 Henry's reign, Richard obtained the privilege of making new 
 money in the king's name, for twelve years, in England, Ireland, 
 and Wales, and of this privilege he made enormous profit. But 
 Richard himself was at length outwitted. By means of his 
 immense wealth he obtained the title of King of the Ro- 
 mans. Perhaps the pope saw that he was a dangerous com-
 
 23 
 
 petitor in money matters, and therefore favoured his election. 
 The attainment of this honour, however, involved him in ex- 
 pences which presently drained him of all his money, and 
 caused him to return to England in comparative poverty. In 
 the mean time the people of England experienced a complete 
 dearth of money. The demands of the pope and his Italian 
 Jews abroad, and that of King Henry and his Jewish brother 
 Richard at home, caused the absolute money system to act 
 upon the people with the pressure of a perpetual screw ; the 
 demands upon them increasing in proportion as their means 
 were diminishing, until from the dearth of money a dreadful 
 dearth of food ensued. It was, therefore, thought good to 
 change the old money, and to make it baser ; ** whereupon," 
 says Leake, " a new stamp was engraven, and all the old 
 stamps were called in ; the old money was exchanged for new, 
 allowing thirteen shillings for every pound, to the great 
 damage of the people, who, besides their travel, charge and 
 long attendance, received of the bankers scarce twenty shil- 
 lings for thirty. And the reason of this oppression appears 
 to be, because this re-coinage was farmed by the Earl of 
 Cornwall, who was accountable to the king only for the third 
 part. By this means the grievance was increased, instead of 
 being redressed ; and the same Earl of Cornwall, in the forty- 
 first year of King Henry, being elected King of the Romans, 
 is said to have carried into Germany 700,000 pounds sterhng, 
 in ready money ; an immense sum in those days, which, added 
 to what the pope had drawn out of the nation, made a very 
 great scarcity of money. It was this want of money, more than 
 of corn, (for corn had several times been dearer than it was 
 then) that made provision so scarce, that an author says, he 
 saw people fighting for the carcasses of dead dogs, and other 
 carrion ; and that they were glad to eat the wash that was set for 
 the hogs, and many died of hunger." 
 
 The power of determining value being limited to money, 
 which itself was limited to silver, it followed as a matter of
 
 24 
 
 course that to accumulate this, either coined or uncoined, was 
 a much surer way to obtain all other things, than to accumulate 
 those things themselves ; and we have seen that the beggary 
 of the king, and the starvation of the lower orders, were the 
 natural, though unthought-of consequence of the general ac- 
 knowledgment, that value rested upon such a principle. Upon 
 this principle the well-known maxim is founded, " Get money, 
 honestly if you can, but get money." The next two or three 
 reigns show how faithfully this rule was followed, as soon as 
 its importance was discovered. 
 
 EDWARD THE FIRST. 
 
 Edward the First, impatient of the beggary to which his 
 father had been reduced, was no sooner in safe possession of 
 the crown, than he shewed himself to be a beggar of a more 
 sturdy class. He was resolved to have money from those who 
 possessed it, without being very delicate about the means ; and 
 the obtaining it from these made his government popular with 
 those who had it not, especially as he appears to have spent 
 the money as freely as he acquired it. The secret of Edward's 
 policy consisted in the skill with which he divided the wealthy 
 powers of the nation against each other, when, by attacking 
 them singly and bringing them by turns to bear upon each 
 other, he so completely subjugated the whole, as to render the 
 power of the crown in his time as absolute as it had been in 
 that of the Conqueror. The Jews were always sufficiently 
 obnoxious to the prejudices of the people to admit of being 
 made an easy prey, whenever it was desirable to assail them. 
 They therefore became the first object of Edward's attack. 
 Under the accusation of having defaced the coin, nearly 3 00 
 of them were executed in London, in his fifth year, and their 
 confiscated property brought considerable treasure to the king.
 
 25 
 
 In his eighth year a writ was issued, requiring all his subjects 
 to shew by what title they held their lands. By this he drew 
 considerable sums from the barons and other landed proprie- 
 tors, and probably would have done much more in that way, 
 but for the spirited defence of John, Earl of Warren, who 
 met him with his own weapons, saying, that he held his lands 
 by the sword, and would so hold them until death. 
 
 In his 17th year, Edward fined all his judges for corruption, 
 some in 1,000 marks, some in 2,000, others in 3,000 and 
 4,000 ; one in 6,000, and another in 7,000. Sir Adam Strat- 
 ton. Chief Baron of the Exchequer, was mulcted in the enor- 
 mous sum of 34,000 marks; and Thomas Wayland, found to 
 be the greatest delinquent, and it is said of the greatest sub- 
 stance, had the whole of his estates and goods confiscated. 
 When forfeiture to the king was the punishment, it was a 
 fearful thing for a delinquent to be possessed of great pro- 
 perty. In his 18th year Edward banished all the Jews from 
 his kingdom, about 15,000 in number, and confiscated all 
 their goods. 
 
 The abuses to which the nation had been subjected by 
 the pope and the clergy, from the time that the pope had 
 obtained the complete ascendancy over king John, prepared 
 the people to acquiesce in any measures on the part of the 
 crown, which went to cripple the ecclesiastical powers. Ed- 
 ward had already drawn frequently and largely upon the re- 
 venues of the church, and the clergy, in the spirit either of 
 peace or policy, had quietly submitted. But their patience 
 being exhausted with the continuance of those demands, they 
 at length thought fit to resist an imposition laid upon them in 
 his 25th year. Whereupon, Edward immediately put them 
 out of his protection, by which means they were deprived of 
 justice in any of his courts, so that they were presently forced 
 to concede every thing that he asked. There was perhaps no 
 class of his subjects, possessing money, from whom he did not 
 by one means or other contrive to extort it. But as he does
 
 26 
 
 not appear to have left much behind him, it is fair to con- 
 clude that he spent it as freely as he got it, and this may ac- 
 count for the high price of provisions in this reign, their 
 value in money depending essentially upon the amount of 
 money in circulation, (not merely on money in existence,) 
 which amount is always great when the state is possessed of 
 the will and means to cause a great expenditure. 
 
 In the 15th year of his reign, wheat was 5d. a bushel, and 
 in the next year Is. dd. The year following, it was as low as 
 3d., and again as high as Is. 4d., from which price it progres- 
 sively increased for some years, until at last it was sold for 
 2s. 6d. the bushel. In his 27th year, it was again reduced to 
 5d. the bushel. These fluctuations in the price of the first 
 necessary of life, at a time when the currency was entirely 
 metallic, shew that extreme changes in value are not the ex- 
 clusive consequence of a credit currency. 
 
 The mode of obtaining supplies which Edward had re- 
 course to was not of a character to last long ; it contained 
 within itself the principle of its own destruction. For after 
 he had once drained the wealthy part of his subjects of the 
 bulk of their money, and spent it again, every repetition of 
 the process would be attended with less success ; and that 
 which was expended would by degrees find its way into the 
 possession of persons who could either conceal their property 
 from the king's knowledge, or defend it against his demands. 
 Whilst, therefore, the prices of provisions were enhanced by 
 the free expenditure of the monarch, his means of keeping 
 up that expenditure gradually became exhausted. To this 
 cause, aided as it was in his 25th and 26th years by a large 
 foreign expenditure, may be attributed the fact, more than to 
 to the increased quantity of provisions, that the money value 
 of wheat in his 27th year was so much reduced. And pro- 
 bably to the same cause may be owing the enactment of a 
 law, in the same year, to limit the price of provisions ; 
 for supposing the king to have found difficulty in pro-
 
 27^ 
 
 curing money to meet the market price of provisions, the 
 next expedient which would suggest itself to his mind, would 
 naturally be to make the market price conform to the amount 
 of his income. By this law it was fixed, that a fat lamb 
 should be sold for 1 6d. from Christmas to Shrovetide, and all 
 the rest of the year for 4c?. ; a goose or a pheasant for 4c?. ; a 
 couple of pullets for l^d., &c. 
 
 So long as the rich supplied him with money, Edward's 
 government, however oppressive it might be to the wealthy, 
 would be favourably regarded by the common people, inas- 
 much as it suspended the operation of those evils, which an 
 arbitrary money system was calculated to inflict upon them. 
 It is observable, that although there was a long continued 
 scarcity of provisions in this reign, attended with a great in- 
 crease of their money price, yet as the means of obtaining 
 money kept pace with the increased price, there does not ap- 
 pear to have been any very great distress experienced by the 
 bulk of the people. In former reigns, when similar scarcity 
 existed, though the money value of provisions was kept nomi- 
 nally low, the poorer sort not being able to obtain remune- 
 ration for their labour at even that low rate, were often 
 stai'ved to death. This exemption, however, from the oppres- 
 sive bearing of the money system, could not last long. Laws 
 to restrict the price of provisions are calculated to tell upon 
 the comforts of the community ; since to restrict the 
 price of commodities is virtually to restrict the price of the 
 labour expended in producing them ; and as labour is the only 
 commodity which the common people have to bring to market, 
 their wealth rises and falls with the money value of it : there- 
 fore, to limit the price of provisions was in fact to draw from 
 the poor their labour upon the same terms that the rich 
 had been recently compelled to surrender their property. No 
 doubt, every body thought then, as almost every one does now, 
 that the principle of low prices is an excellent thing in the 
 main, and only bad when applied to one's own individual case.
 
 28 
 
 And probably, the poor people themselves might be as clamo- 
 rous for low prices then as they are now ; not perceiving how 
 intimately and necessarily the low prices of commodities and 
 low wages are connected. 
 
 EDWARD THE SECOND. 
 
 Edward inherited the crown of England when it was sur- 
 rounded with laurels. He came into the possession of some 
 money also ; but unless he could replenish his coffers, it was 
 impossible to sustain the glory of the crown, and his father 
 had so reaped the wealth of his subjects as to leave but 
 scanty gleanings for the son. The barons, profiting by ex- 
 perience, were now on the alert to resist by force a repetition 
 of arbitrary enactments against themselves. The revenues of 
 of the church had been so exhausted, that its ministers were 
 glad to co-operate with the barons to protect themselves 
 against further impoverishment. All the property of the Jews, 
 as we have seen in the preceding reign, had passed into the 
 hands of the monarch, and therefore that source of supply 
 was, for the present, effectually cut off. It therefore behoved 
 Edward the Second to extend the principle of making his 
 money go further in payments. Coin of inferior value was 
 accordingly countenanced in circulation, and the principle of 
 restricting the prices by law, which in the preceding reign 
 had been applied to many minor articles of food, was now 
 extended to larger objects. It was ordered that a pasture-fed 
 ox should be sold for 155. ; an ox fattened with corn for 20s.; 
 the best cow for 12s., and so in proportion for other things. 
 
 After these rates were fixed, it is natural to suppose that 
 the owners of the above articles would be little solicitous to 
 sell them ; and that they would care still less to increase
 
 29 
 
 their stock, when they were to be compelled to part with it 
 at a price which was doubtless below the natural money- 
 value, or the law would have been uncalled for. The conse- 
 quence of these enactments may therefore be easily foretold. 
 Provisions became excessively scarce, insomuch that, in a 
 short time, it was with difficulty enough could be obtained for 
 the king's household ; and a famine so dreadful ensued, that 
 it is said the thieves newly cast into prison were torn to pieces, 
 and eaten half alive by those already there. A terrible pes- 
 tilence, as usual, was the consequence ; and in about three 
 years, the people being diminished and the food increased* 
 (the king and parliament having in the mean time revoked 
 their order for the restriction of the price of provisions, and 
 permitted the market folks to make the best of their wares) 
 things were again brought round. 
 
 Afterwards numerous confiscations took place. These sup- 
 plied the king with money ; but it is probable that they also 
 furnished him with a strong temptation to shed the blood of 
 so many of his nobles. The manner in which he subsequently 
 lost his crown and his life, shows how dangerous it is for a 
 monarch to sanction, by his own example, the exercise of mere 
 arbitrary power: the precedent established by Edward the 
 First proved fatal to his immediate successor. 
 
 EDWARD THE THIRD. 
 
 Hitherto we have seen the operation of a money system 
 limiting the representation of value solely to silver, and we 
 have seen that in a few reigns, after the first confirmation of 
 this system, our ancestors were subjected to many dreadful 
 famines, some of which are directly attributed, by historians, 
 to the absence of money rather than of food, and others to
 
 30 
 
 an absence of food, which, on natural principles^ may fairly 
 be derived from the false estimate of value which such a 
 money system could not fail to infuse into the minds of those 
 who were subject to it. Under this system it was impossible 
 for the king to sustain an adequate quantity of money in 
 circulation, without gross injustice to some of his people, in 
 violently forcing from them the material of money ; and if 
 the circulation were not adequately sustained, starvation be- 
 came the inevitable lot of others of the community. We have 
 witnessed the continuance of the system till it drove Henry 
 the Third to have recourse to beggary, and Edward the 
 First to what would have been robbery, if the acts of that 
 reign had been the deeds of any one of less authority than a 
 monarch. 
 
 But in the course of the reign of Edward the Third an im- 
 portant change was effected in this money system by the in- 
 troduction of gold into the currency. Up to this time the 
 legal pound sterling had been of equal value, or nearly so, 
 with the pound weight of silver ; for, until the reign of Ed- 
 ward the First, it required a pound weight of silver to make 
 a pound sterling ; and afterwards a pound weight was au- 
 thorised to make one pound and three pence sterling ; there- 
 fore, though a pound weight of silver was not a pound ster- 
 ling until it had received, by royal sanction, the impression 
 of coinage, yet a legal pound sterling was, or ought to have 
 been, a pound weight of silver, subject to the above trifling 
 abatement. This continued until the eighteenth year of the 
 reign of Edward the Third, consequently the pound sterling 
 until that time was subject to a test which could not be abused. 
 But when gold was introduced into the coinage, this test 
 was soon lost sight of. For then it was in the power of the 
 king to cause the pound sterling to be represented by a given 
 quantity of gold, as well as by a given quantity of silver ; 
 and thus by making the gold coinage at one time conform to 
 the test of the silver standard, and at another time by mak-
 
 31 
 
 ing the silver coinage conform to the test of the gold stand- 
 ard, the king was furnished with a plea for altering the 
 pound sterling at his pleasure. 
 
 Edward's first coinage of gold was upon a scale which made 
 the pound weight of gold, of certain fineness, represent 15/. of 
 sterling silver; but this value being found too high in relation to 
 the silver standard, the difi^erence was attempted to be adjusted 
 by a new coinage of both gold and silver, in which the pound 
 weight of gold was coined into 13/. 3s. Ad., and the pound 
 weight of silver into 1/. 2s. 6d. This arrangement took place 
 in the eighteenth year of Edward the Third. By this coinage 
 a piece of gold, called a noble, considerably heavier than our 
 present sovereign, and more pure, was made to pass for 6s. Sd. 
 In two years afterward this arrangement of the relative value 
 of gold to silver was again altered. It was then ordered that 
 the pound weight of gold should represent 14/. sterling of 
 silver. Five years after this (25th of Edward III.) another 
 change took place. It was enacted that the pound weight 
 of gold should make 15/., and the pound weight of silver 
 1/. 5s. These frequent variations in the relative value of an 
 equal weight of gold and silver, gave early proof of the im- 
 possibility of adjusting by law the proportions in which they 
 really exist, and consequently their value with respect to each 
 other, without the intervention of some other measure common 
 to both, yet independent of either, by which, as on .a gra- 
 duated scale, their true relation might be ascertained. 
 
 At this stage of our inquiry it becomes necessary to ad- 
 vert to the terms in which these fluctuations in the value of 
 the precious metals are usually expressed, and to the sense in 
 which the reader will be required to understand them through- 
 out the subsequent pages. Gold is said to be loioered in re- 
 spect to silver, when a pound weight of it is declared by law 
 to be exchangeable against a less quantity of silver than for- 
 merly, and it is of course raised when the contrary takes place. 
 Vice versa, silver is said to be lowered or raised when its pro-
 
 32 
 
 portion to gold is altered, the latter, in snch cases, remaining 
 stationary. But there is a further relation to be noticed, 
 which is, when gold and silver remain in the same proportion 
 to each other, but the value of both is altered with respect 
 to other things, — provisions for instance. This alteration may 
 be effected either by coining the pound weight of standard 
 silver and gold into a greater number of pieces of the same 
 denomination as before, or by causing the current coin to 
 pass for more in amount than it had previously done. In 
 either case of this last description of change in the value of 
 gold and silver, where other commodities are the objects of 
 comparison with them, the coin is said to be enhanced. 
 Agreeably to this phraseology, gold, after its first introduc- 
 tion, was lowered in^ value, or silver was raised, (according 
 as either is taken for a standard) ; but the coin altogether 
 was enhanced (that is, against commodities and labour,) in the 
 course of seven years no less than 20 per cent., which large 
 profit was the portion of those who had the precious metals 
 under control. 
 
 So great an enhancement of the value of gold and silver 
 in so short a time, was a mine of wealth, the discovery of 
 which might have satisfied the king ; but his wants grew 
 with their gratification. Recent experience prevented the 
 government from legislating about the price of commodities ; 
 they were therefore left to find their own level in the reduced 
 currency ; but with the price of labour, nothing but the 
 analogy of the cases forbade interference. The same selfish 
 policy, therefore, which in the preceding reign had created a 
 famine by restricting the money value of provisions, again 
 overcame the suggestions of reason and humanity ; and a 
 foundation for the rebellion, which took place in the next 
 reign, was now laid by the passing of a law to limit the 
 money value of labour. In the very year that the last en- 
 hancement of the coin took place, it was enacted that the 
 price of labour, under the new standard, should be restricted
 
 to its nominal amount under the old standard. Thus Avhilst 
 provisions were permitted to rise in value, the poor man's pro- 
 perty, his labour, was to be kept down. 
 
 The effect of this law was for some time counteracted 
 by the warfare which distinguished the middle of this reign, 
 and which provided both employment and remuneration for 
 all the restless spirits of the nation. During this period the 
 kings of both Scotland and France became Edward's prison- 
 ers; and for the release of the latter, in the 34th year of Ed- 
 ward III., France consented to pay no less than three millions 
 of crowns of gold, two of which crowns were to be equal in 
 value to one English noble. No sooner however did the re- 
 sources, supplied by successful warfare, begin to slacken, than 
 it became expedient for the legislature to devise some plan 
 by which the legal rate of the wages of husbandry might be 
 made adequate to the support of the labourers. But instead 
 of raising their wages to their necessities, government endea- 
 voured to adjust the appetites of the poor to their wages. 
 Pursuant to this, in the 37th year of Edward the Third, an 
 act was passed, declaring that labourers and husbandmen 
 should be allowed only one meal a day, and further declaring 
 what kind of food they were permitted to eat. Afterwards, 
 when war had not only ceased to be a profitable, but actually 
 became a losing game to England — when, as it is said, king 
 Edward expended more money in losing towns than it had 
 formerly cost him to win them, and when money must be had 
 from some source or other to supply the wants of the state, 
 — the measure of injustice towards the inferior classes ap- 
 pears to have been filled up. For instead of taking money 
 from the wealthy in preference, as was proposed by the Duke 
 of Lancaster, it was most unreasonably enacted by Parlia- 
 ment that a poll tax of fourpence per head should be levied 
 upon evert/ person, male and female, above the age of four- 
 teen years, those only excepted who were living on alms. 
 Thus, at the conclusion of the glorious reign of Edward the
 
 34 
 
 Third, England appears to have nearly reached what some 
 would deem that point of perfection in political economy, 
 which denies to the working people adequate wages and 
 proper food, and yet requires them to supply the revenues of 
 the state — a point which Egypt also was very near attaining, 
 when the industrious Israelites were rescued from the neces- 
 sity of making bricks without materials, by the miraculous 
 interposition of Heaven. 
 
 RICHARD THE SECOND. 
 
 Those oppressive regulations, with respect to the labour- 
 ing classes, which commenced in the last reign with an altera- 
 tion of the money laws, had their natural issue in the rebel- 
 lion under Wat Tyler. It is notorious that the poll tax 
 proved the direct means of arousing that rebellion, and the 
 rapidity with which the flame spread when once it was lit, 
 shews that the minds of the working people throughout the 
 kingdom were in a state of high excitement. They felt that 
 gross injustice had been done them by the higher classes, and 
 menaces of destruction were levelled not only against wealthy 
 people, but against property itself. The following couplet, 
 which it is stated was very popular at the time, no doubt ex- 
 presses the views then entertained of the distinction of ranks : 
 
 •■' When Adam delved and Eve span, 
 Who vi^as then the gentleman ?" 
 
 Judging from what was done by Wat Tyler and his fol- 
 lowers, it is highly probable that their intentions were not 
 over-rated in the dying confession of Jack Straw, when he 
 declared that their purpose was to cut off the heads of the king 
 and all the wealthy people in the kingdom, and to burn the 
 city of London. 
 
 After this experience more caution appears to have been ex-
 
 35 
 
 ercised both in taxing the poorer classes and in applying the 
 law to the restriction of their wages; and it is not improbable 
 that a contest for the crown, which about this time began to 
 agitate England, might tend to improve their condition, 
 how much soever it mig-ht disturb the comforts of their su- 
 periors. For whilst the common people were liable to be con- 
 tinually wanted as soldiers, by one party or the other, they 
 would doubtless obtain better fare as the retainers of some 
 nobleman, than that which the parliament of Edward the 
 Third had allotted to them as artisans and husbandmen. 
 
 HENRY THE FOURTH. 
 
 In the thirteenth year of this monarch, the specific weight 
 
 of standard silver in the pound sterling was again reduced. It 
 
 was then enacted, that the pound weight of standard silver 
 
 should make 1/. 10s. sterling, and the pound weight of gold 
 
 16/. 13s. 4id. The previous regulation, it will be recollected, 
 
 was 1/. 5s. for silver, and 15/. for gold. So that the precious 
 
 metals were not only enhanced, but their relative value was 
 
 again altered ; silver was enhanced one-fifth, or 20 per cent. ; 
 
 and gold little more than one-tenth. " The great scarcity of 
 
 money within the realm of England, and other mischiefs and 
 
 causes" were assigned as the reason for this deterioration of 
 
 English money. But the fact was, that the enhancement of 
 
 the value of gold and silver in coin was naturally followed by 
 
 a progressive advance in the mercantile value of the uncoined 
 
 material, until the mercantile value became upon a par with 
 
 the coined value ; and when this became the case, no person 
 
 would take his metal to the mint and allow the king and the 
 
 mint-master a profit upon the coinage, when he could make 
 
 more profit of the metal by taking it to the merchant. When 
 
 the bullion-market got into this state, money naturally became 
 
 scarce. 
 
 c 2
 
 36 
 
 Various strong and arbitrary measures were repeatedly 
 tried under these circumstances to prevent the exportation of 
 bullion, and to force its importation. But private interest 
 always proving too ingenious for public laws, in the end it 
 became necessary to raise the value of gold and silver in coin, 
 to such a degree, as to overtop the mercantile value of the 
 uncoined material. Usually, as soon as this was done in any 
 particular country, in England for instance, there was, for a 
 season, plenty of money in circulation, because, until the ex- 
 ample were followed by other countries, it would, of course, 
 be profitable to merchants to bring the precious metals there : 
 again, the new money being so much lighter than the old 
 money, nobody, in the first instance, would like to hoard it, 
 lest it should be again restored to the former standard, to the 
 loss of the holders, as was formerly the case, when the pound 
 sterling was restored to the pound weight of silver ; and each 
 alteration of the value was accompanied with a clause which 
 encouraged this apprehension. From these causes, the quan- 
 tity of gold and silver in the nation was not only increased 
 actually, but also increased in its efficiency, private interest 
 operating to sustain it in more lively circulation, and a tempo- 
 rary prosperity was the consequence. But as increased prices, 
 and increased wages (when unrestrained by law) naturally 
 followed in the train of consequences, with a further increase 
 in the mercantile value of gold and silver ; so, when the king 
 had reaped the first fruits of a diminution of the coin, and he, 
 as well as others, had enjoyed the privilege of paying off his 
 debts with a less quantity of the precious metals than that in 
 which they had been contracted, then the old evil of " great 
 scarcity of money within the realm of England, and other 
 mischiefs and causes," gradually returned, and called for a re- 
 petition of the process.
 
 37 
 
 HENRY THE FIFTH. 
 
 During the short, but brilliant career of this monarch, 
 money was preserved from further deterioration. In the first 
 year of his reign the clergy were led to entertain serious fears 
 lest he should take their temporalities from them. To divert 
 him from this purpose, it is said, they gave him a very large 
 sum of money. In his fourth year he drew considerable sums 
 from the laity, but more from the clergy, towards the support 
 of his wars in France. Being still in want of money he 
 pawned his crown for a large sum to his uncle, the Bishop of 
 Beaufort, and his jewels to the Lord Mayor of London. To 
 have been forced to have recourse to these modes of getting 
 money is a sufficient proof that his sole object in obtaining it 
 was to give it circulation. The success, however, of his wars 
 was probably the chief cause that during his reign the nation 
 was preserved from any further diminution of the coin. 
 
 HENRY THE SIXTH. 
 
 So great a scarcity of the precious metals was now ex- 
 perienced, that by an act of the legislature, it was commanded 
 that all wool, wool-fells, and tin, exported, should be paid for 
 in gold and silver, which gold and silver were to be brought to 
 the mint to be coined ; and the sellers of the above articles 
 were also forbidden, by law, to lend to any merchant any of 
 the money which they should receive for them. But though 
 gold and silver were both scarce in England, gold, it seems, 
 was the rarer of the two ; which arose from gold and silver, in 
 their mercantile character, varying in their relative value from 
 the proportion assigned to them in their money character, so 
 as to make it profitable for dealers and merchants to buy up 
 silver money with gold money, or vice versa. At this time
 
 38 
 
 the coined gold of England bore a considerable premium above 
 the coined silver, in the public market of Europe, and it had 
 become a common practice for foreign merchants to make their 
 bargains to be paid in gold alone. To check this practice, it 
 was enacted, that no merchant alien should be allowed to bind 
 any of his Majesty's subjects to make payment in gold for 
 any debt, and if any refused to take payment in silver for any 
 debt due to him, he should be subject to a penalty of double 
 the amount of the sum. The scarcity of money appears to 
 have been a growing evil throughout this reign. Mr. Ruding 
 attributes to the extremity of the distress which the king in 
 consequence experienced, his readiness to put faith in alche- 
 my for the supply of his wants. In his 35th year, his ma^ 
 jesty's expectations were raised so high, that in a patent 
 which he granted to certain persons for practising that art, he 
 speaks with the utmost confidence of being able soon to pay 
 fill his debts with real gold and silver produced by the stone. 
 
 EDWARD THE FOURTH. 
 
 Edward the Fourth resorted to the old method of making 
 a larger quantity of money out of the same quantity of metal ; 
 which, if he could get the metal, proved him '' a wiser 
 child of this world" than his predecessor. In his fourth year, he 
 enhanced both gold and silver 25 per cent., which was, in effect, 
 to tell every one who owed £100, to take his bill quickly and 
 write down fourscore. At this time it was ordered that the 
 pound weight of silver should make 1/. 17s. 6d. sterling, in- 
 stead of 1/. 10s.; and the pound weight of gold 20l.l6s.8d., 
 instead of 16/. 13s. 4cL But even this vast and sudden en- 
 hancement, it seems, was not found enough, with respect to 
 gold ; for in the next year it was ordered, that the pound 
 weight of gold should be coined into 22/. 10s. : so that at
 
 39 
 
 this time gold money was enhanced in value considerably more 
 than silver money; whereas, in the former great change 
 made by Henry IV., silver money was enhanced in a much 
 greater proportion than gold. The proclamations which an- 
 nounce these alterations speak rather more explicitly of those 
 " other mischiefs and causes" which had led to the scarcity 
 of money in England, than the ordinance of Henry IV. 
 had done. Amongst other things, " lack of bringing of bul- 
 lion into the king's mint," is stated, " which, as is conceived, 
 is because they that should bring bullion may have more for 
 their bullion in other prince's mints than in his." Hence it 
 appears that other princes were not ignorant of the conve- 
 nience of enhancing the precious metals ; and the necessity of 
 adjusting the coined money of different countries to each 
 other served afterwards as a pretext for debasing the stan- 
 dard, as well as for lessening the size of the coin. 
 
 By the second gold coinage of Edward IV. which took 
 place in his fifth year, the noble was ordered to weigh 
 5 dwts. 8 grains, exactly the weight of our present guinea ; 
 but the quality of the gold was near 10 per cent, finer. Its 
 value was fixed at lOs. ; if it was under weight, it vras to be 
 refused in payment. Considerable inconvenience being found 
 to result from this, it was shortly afterwards enacted, that 
 whatever deficiency there might be in the weight of the noble, 
 should be made up with current silver. 
 
 In the seventh year of Edward IV. complaint was made 
 that Ireland was destitute of silver, — that the new coined 
 money of that country was carried away daily, and that the 
 people, contrary to law, (necessity being stronger than law,) 
 continually took clipped money in payment : it was therefore 
 ordered, that there should be an entirely new coinage, lower- 
 ing the specific worth of Irish money very considerably ; and 
 that after the ensuing Easter, all other silver coins or money 
 should be strictly prohibited from circulating in Ireland. All 
 persons receiving or paying them, were to be adjudged guilty
 
 40 
 
 of felony. It seems, however, that the people were not put in 
 possession of the means of getting the new money in a degree 
 commensurate to their wants, and its diminished worth ; for in 
 consequence of this alteration of money, all kinds of merchan- 
 dize and victuals became so excessively dear that many peo- 
 ple were near perishing through want, and many gave up 
 their houses and quitted the land. 
 
 When the value of the pound sterling was altered by Ed- 
 ward III., it may be presumed that neither he nor foreign 
 princes, nor mercantile men, were immediately aware of the 
 changes which it would occasion ; but now, the consequences 
 likely to result from such depreciation of the pound ster- 
 ling were better understood, and they were so quickly 
 brought about, as to leave the sovereign but little time in 
 which he could make his profit. By the enhancement made 
 in the 6th year of Edward IV., the crown gained a profit of 
 11. Os, lOd. out of every pound weight of gold ; for the 
 pound weight was coined into 221. 10s. Od., while the person 
 who brought the metal to be coined received back only 
 2\l.9s.2d.: and so with the silver, the pound weight pro- 
 duced 37s. 6d., but the owner received only 33s. which left 
 a profit of 4s. 6d. to the crown. But the rise of the market 
 value of the metal so rapidly followed this enhancement 
 of the coin, that in his 8th year, the king found it necessary 
 to reduce the seignorage on gold to 14s. 6d. and on silver to 
 2s. Sd., and in his 1 1th year it was further diminished to 7s. 6d. 
 on gold, and to Is. 6d. on silver. 
 
 HENRY THE SEVENTH. 
 
 The pound sterling remained unimpaired during the reign 
 of Henry VII. That shrewd and politic monarch being in the 
 undisputed possession of the throne, and fully conscious of 
 paramount value of money, appears to have had his attention
 
 41 
 
 keenly excited to the acquisition of wealth ; and to his skill 
 in accumulating money may be attributed that high degree of 
 absolute power with which he again invested the crown of 
 England. Henry understood too much of the mystery of 
 money, not to be aware that no real good could accrue to the 
 crown from diminishing the weight of the pound sterling, 
 whatever temporary advantage it might afford an improvident 
 king. Had it been possible for a monarch, with the knowledge 
 of a Jew in the science of money, to have monopolized the 
 coin, and yet to have prevented the clipping of it, Henry 
 might have been that man, but in defiance of all his regula- 
 tions money grew scarce ; scarcity made people less scrupu- 
 lous about its perfection ; and as there was a market for light 
 money the article was sure to be provided. This monarch's 
 disposition to hoard wealth probably tended in no little de- 
 gree to make money scarce. The treasure he is recorded to 
 have left behind him is variously stated, but all accounts 
 agree in making it much more than was accumulated by any 
 of his predecessors. It was mostly secreted under his own 
 key. The malpractices by which it was amassed were so 
 notorious, that Henry VIII., on coming to the crown, thought 
 fit to cause two of his father's favourites (Empson and Dudley) 
 to be beheaded for their services in this matter ; and several of 
 the inferior agents were suffered to perish in prison. 
 
 In the hands of Henry VII., parliamentary power and 
 judicial influence were quite as potent in contributing to the 
 wealth of the king, as the direct power of the sword was in 
 the hands of the Conqueror and Edward I. 
 
 HENRY THE EIGHTH. 
 
 The love of display was greater in Henry VIII. than the 
 love of money ; and therefore, though he inherited such im- 
 mense wealth from his father, he soon found means to scatter
 
 42 
 
 it. During its dispersion, the public probably were benefited, 
 but this was paid for afterwards. The king's want of money 
 caused him to exercise the royal prerogative in reducing the 
 pound sterling, and he taxed his subjects to an amount which 
 the stock of precious metals in the kingdom could not possibly 
 represent, without diminution or deterioration of the coin, 
 in weight or purity. In his 18th year, it was enacted, that 
 the pound weight of silver should make 21. 5s. sterling ; and 
 the pound weight of gold, 27/. sterling. Thus each was en- 
 hanced about 20 per cent. ; but after this, the money was ra- 
 pidly debased and diminished, until in his 37th year, a pound 
 weight of metal, which contained only four ounces of fine sil- 
 ver, the remaining eight ounces being alloy, was coined into 
 21. 8s. Od. sterling, and the pound weight of gold, which was 
 now only 20 car. fine, and 4 car. alloy (instead of 23 car. 
 3| grs. and J gr. alloy), was coined into 30/. ; so that the pound 
 weight of silver of the old standard, which prior to this reign 
 was authorized to make \l. 17s. 6d. sterling, was now actually 
 coined into 71. 4s. ; and the pound weight of fine gold, 
 which previously formed 27/., was now converted into 36/. 
 
 By this change, silver was enhanced to nearly four times its 
 former value, while gold was only raised about one-third : thus 
 their relation to each other in the money system was amazingly 
 altered ; but not so their mercantile value, for no one that 
 could help it parted with gold, or old silver in payment, at 
 that rate. The money value of an old angel was fixed at 8s. ; 
 but Stow says, that he had seen 21s. given for one ; it was for 
 the purpose of using it in gilding, he tells us : but when it is 
 considered that the 21s. contained only one-third their weight 
 of silver, it was a profitable purchase in a mercantile point of 
 view. The prices of victuals, and the rate of rents for lands 
 and tenements, were presently raised in some proportion to the 
 diminished worth of the money, and of course far beyond any 
 former precedent. Clipped silver, however despised at other 
 times, was then as diflficult to meet with as hght guineas dur-
 
 43 
 
 ing the latter part of the last war; for of course, no one 
 would lend, when he was liable to be repaid in baser money. 
 
 The difficulty of borrowing clipped, bent, or broken silver, 
 is thus humorously illustrated in some verses of that day : 
 
 Hast thou any bowed silver to lend me, Joan ? 
 
 Nay. Hast thou any broken silver for me? None. 
 
 Hast thou any dipt silver ? I had, but 'tis gone. 
 
 Hast thou any crack'd groat? Crack'd groat ! nay, not one. 
 
 No silver, bowed, broken, clipped, crack'd, nor cut. 
 
 Here's a friend for friendship not worth a crack'd nut ! 
 
 EDWARD THE SIXTH. 
 
 This last and worst coinage of Henry the Eighth continued 
 in circulation until the third year of Edward the Sixth, when 
 the purity of the coin was increased ; but exactly in the same 
 degree its value was enhanced, so that in effect it remained 
 without improvement. Instead of the pound weight of metal 
 of four ounces of silver and eight ounces of alloy making 
 21. 8*. sterling, Edward ordered that a pound weight of metal, 
 of six ounces silver and six ounces alloy, should make 3Z. 12s., 
 so that what was gained in purity was lost in weight. 
 
 The shilling was thus reduced to 3 dwts. 8 grs., one half of 
 which only was of fine silver ; whereas the weight of the groat, 
 until the 13th year of Henry the Fourth, had been 3 dwts. 
 4| grs. undebased. It is supposed to have been this small 
 shilling of Edward the Sixth which caused Bishop Latimer, 
 in a sermon before the king, sarcastically to say, " We have 
 now a pretty little shilling, indeed a very pretty one ; I have 
 but one I think in my purse, and the last day I had put it 
 away almost for an old groat, and so I trow some will take 
 them." Latimer in his next sermon vindicated himself for 
 having brought this subject forward in the pulpit, by an allu-
 
 44 
 
 gion which shewed that he conceived the bad state of the 
 money was occasioned by the covetousness of those at the 
 head of the state, and that it was accordingly a crime which 
 it was his duty to reprove. By this new coinage the merchant 
 was to have 3/. 45. for the pound weight of fine silver, which 
 being to be coined into 11. 4s. left the king a profit of 4/. 
 sterling. This enormous profit on the coinage was a confirma- 
 tion of Latimer's suspicion. 
 
 It may seem strange that the merchant should supply 
 silver upon terms apparently so unprofitable; but although 
 the coined silver of England was greatly enhanced above 
 the mercantile value of it, the coined gold of England was 
 not so enhanced, and therefore the 3/. 4s. which the mer- 
 chant was to receive for his pound weight of silver must 
 be understood to have been sufficient, in the first instance, to 
 enable him to discharge English debts, or get gold with it, so 
 as to realize a profit on the transaction. Henry the Eighth, by 
 debasing the gold money, thought to make profit of the gold 
 coinage as well as of the silver coinage ; but it was soon 
 found to be impossible, as profit could only be gained, even 
 by a king, from making the one comparatively dearer than 
 the other. Accordingly the coined value of gold money 
 was kept on a par with its mercantile value, so that it could 
 be employed to buy silver with at its mercantile value also ; 
 and then the royal proclamation could cause silver in its 
 coined state to bear any value, in the home circulation, which 
 his Majesty might chuse to put upon it, whereby a proportio- 
 nate profit was secured until the means of getting gold were 
 exhausted. 
 
 But whilst silver coin was thus made to possess so high 
 a money value, and gold was restrained to its mercantile va- 
 lue, it was in vain to expect that any gold coin should remain 
 in circulation, or that the silver should escape being counter- 
 feited, seeing it was possible to make it as good as the king's 
 money, and for the counterfeiter to get an immense profit out 
 
 I
 
 45 
 
 of it. , William Thomas, clerk of the council, notices this, in his 
 letter to Edward VI., exhorting him to reform the coin : " If 
 there be any quantity of gold remaining (as some men think 
 but small) it cannot come to light ; because that like as the 
 value of our [silver] money doth daily decay, so doth gold 
 increase to such value that lying still it amounteth above the 
 revenues of any land. And he that shall live twelve months, 
 shall see that an old angel [which by law was current for eight 
 shillings] shall, in value and estimation, want little of twenty 
 shillings of our current money, if provision for the redress of 
 your Majesty's coin be not had." The temptation, indeed, to 
 counterfeit the coin of the realm was at that time so strong, 
 that men in the higher classes of society, and those immedi- 
 ately connected with the mint, were guilty of it. Sir Wil- 
 liam Sharrington, master of the mint at Bristol, confessed 
 that he had made large profit of clipping and shearing the 
 coin, (of course the old coins, for the new were not worthy of 
 it,) and that in the first year of King Edward he had issued 
 12,000/. of counterfeit money. 
 
 It now became apparent to the king's advisers, that as it 
 was natural, in the way of trade, for the uncoined material of 
 money to follow the value it was allowed to possess in coin, in 
 a short time after the first issue of the diminished money, so 
 the crown in the long run could not derive anymore profit out 
 of the coinage of worthless money than of good j and that 
 whilst the counterfeiter was participating with the crown in 
 the profits arising from the continual debasement of the 
 money, the king in the end bore all the loss by the diminished 
 specific worth of his annual receipts. 
 
 The popular voice too was decidedly opposed to this worth- 
 less money, although there was doubtless good foundation for 
 the opinion of those who, at the time, maintained that three- 
 fourths of the people were bettered in their condition by it. 
 The letter of Mr. Thomas before referred to goes to the sup- 
 port of this opinion. He says, that, from the worthlessness
 
 46 
 
 of the money, people employed it to great disadvantage 
 rather than keep it. — As the value of labour would naturally 
 be increased by the demand, and as three-fourths of the 
 people, at least, are indebted for their comforts to a free de- 
 mand for labour, so it would follow of course, that whilst the 
 wealthy esteemed it more advantageous to expend their money 
 to disadvantage rather than keep it, the condition of the great 
 majority of the people, whose only property was their labour, 
 could not fail to be improved by the expenditure. 
 
 The necessity of a reformation of the money being now ge- 
 nerallv admitted, measures were taken for efFectino; it. But 
 these were again discreditable to the government, and injuri- 
 ous to the common people. 
 
 Although the gold money, as a mercantile commodity, was 
 enormously below its value in relation to silver, yet, strange 
 as it may seem, the first measure adopted towards the refor- 
 mation of the coinage was to reduce the money value of gold, 
 so that a pound weight of gold of the old standard was allow- 
 ed to make only 28/. I65. It is fair to believe that the go- 
 vernment neither possessed the power nor the inclination to 
 issue much gold according to this scale, and that it was 
 merely adopted as a device for drawing the gold already in coin 
 out of the hands of the more simple part of the holders of it, 
 by leading them to suppose, that if they did not immediately 
 part with it, they should sustain loss ; for in the next year, 
 the pound weight of standard gold was again enhanced to 36/. 
 
 This measure was accompanied with a piece of state policy 
 respecting the silver money, which appears to have possessed 
 the like character for integrity. According to the journal of 
 Edward VI., it was determined, in the early part of the fifth 
 year of his reign, to coin 20,000 pounds' weight of metal into 
 money, so much baser than even that which was already in cir- 
 culation, as to get a clear profit by the transaction of 160,000/. 
 for the purpose, as is alleged, of paying the debt of the 
 realm, of defending the country, and of amenditig the coin.
 
 47 
 
 Agreeably to this resolution, a coinage took place by which 
 a pound weight of metal, containing only three ounces of 
 silver (the rest alloy) was coined into 3/. 125. sterling, thus 
 making the pound weight of fine silver equal to 14/. 8s. 
 sterling. Of this coin the merchant was to receive 10s. for 
 an ounce of silver. It is difficult to conceive how this base 
 coinage was to furnish means for amending the coin, unless 
 it were by actually cheating the ignorant ; and such appears 
 to have been the real design. For, at the very time when a 
 part of this wretched money was in preparation, the former 
 coinage of this reign, and the latter coinage of the preceding 
 reign, which, bad as they were beyond all former precedent, 
 were twice as good as that now contemplated, were first cried 
 down one-fourth, and afterwards one-half, making the shilling- 
 current only for sixpence, and the groat for twopence. Thus the 
 unsuspecting people were robbed of half their money on the 
 plea of its baseness, whilst the government was at the same 
 time plotting the issue of other money, the shilling of which, 
 in comparison, was not worth more than threepence. The 
 richer sort of people, according to Lanquet's Chronicle, had 
 knowledge of these changes beforehand, *' and did put off their 
 new light money, and kept in store none but good gold and 
 old silver, that would not bring any loss," so that the chief 
 loss fell on the lower orders. 
 
 After the first reduction above mentioned, an apprehension 
 currently prevailed, that another would soon follow, for which 
 cause people refused to bring provisions to the markets, 
 chusing rather to keep them than run the risk of being cheated 
 out of the value of the money which they might receive in 
 exchange for them ; in consequence of which, a great scarcity 
 was presently felt. Whereupon a proclamation was issued, 
 stating, that these effects arose "from false and untrue rumours, 
 which were spread by certain lewd persons, who, of their own 
 light heads, had imagined, that because the king had some- 
 what abated the value of his coin, he should, therefore, more
 
 48 
 
 abate it ;" and it proceeds to forbid his Majesty's subjects 
 " to invent, speak, mutter, or devise any manner of tale, news, 
 or report, either touching the abasing of the said coin, or that 
 in anywise might sound, either to the dishonour of his 
 Majesty's person, or the defacing of his or his council's pro- 
 ceedings, or to the disquieting of his subjects, on pain of six 
 months' imprisonment, and of such fine to his Majesty's use 
 as his Majesty's justices of the peace should think fit." The 
 offender was also to be liable to be put in the pillory, and to 
 have one or both his ears cut off, at the discretion of the ma- 
 gistrate ; and any person hearing such tale, news, and report, 
 and not immediately revealing it to some justice, was to be 
 subject to the like punishment. Even the magistrate was 
 to be subject to the same punishment if he failed to fulfil the 
 intention of the proclamation. 
 
 About a month after this proclamation had been issued for 
 stopping the ears and tongues of the people, the second re- 
 duction was made. Such measures, accompanied with such 
 professions, did more towards *' dishonouring his Majesty's 
 person, and defacing the proceedings of his council, than the 
 false and untrue rumours," as they were called, " of certain 
 lewd persons." To aggravate the vexatious cruelty of these 
 proceedings, it appears that some of the servants of the crown 
 turned them to their private profit. The receiver for the 
 county of York confessed that he gained 500/. at one crying- 
 down, by borrowing 2000/., subject to the allowance of 3J. in 
 the shilling, and then paying it into the exchequer at its old 
 nominal value, which he was privileged to do as a receiver of 
 the revenue. 
 
 The foregoing events took place from April to August in 
 1551. In September it was determined that a coinage of 
 silver should be issued of 11 oz. fine, and 1 oz. alloy, the 
 pound weight to make 3/. sterling, whereby, as it is stated in 
 the king's journal, five shillings in silver was to be worth five 
 shillings in gold. Thus the relative value of gold to silver in
 
 49 
 
 a mercantile view, had not been greatly disturbed by the un- 
 equal value attempted to be given to them in the English 
 coinage. By an indenture executed shortly after this, it ap- 
 pears that a pound weight of metal, 1 1 oz. 1 dwt. fine silver, 
 and 19 dwts. alloy, was coined into 3/, sterling. 
 
 Whilst this improvement of the money w^as taking place in 
 England, a measure was adopted towards Ireland, which 
 would have been extraordinary if it had not already been seen 
 that the practice of the time was to prepare for an '• amend- 
 ment of the coin," by a system which would have been down- 
 right swindling had it been practised by ordinary persons. 
 According to the king's journal, it was, on the 18th of May, 
 1552, determined that money should be cried down in Ireland 
 immediately after the Midsummer payments, and that in the 
 mean time the thing should be kept secret : and on the 10th 
 of June (the intention of the 18th of May being referred to) it 
 was appointed that a considerable weight of metal which the 
 king had in the Tower should be carried to Ireland, and there 
 coined in a very base state, and that as soon as it was disbursed 
 the coin should be cried down. 
 
 In the mean time, the improved money of England had be- 
 o-un to be issued, but it was no sooner issued than it was 
 bought up at a premium with the old bad money, and either 
 hoarded or exported. The merchants were accused by the 
 king of loitering at home, and employing themselves in ex- 
 changing money, and clandestinely conveying bullion out of 
 the realm, instead of adventuring to bring in foreign commo- 
 dities. The direct mode of preventing this would have been to 
 suppress the circulation of the bad money altogether, but the 
 doing so presented a choice of difficulties — the government 
 must have taken it in, and given good money for it, themselves 
 bearing the loss, or they must have thrown the loss at once 
 upon the holders. The latter course would probably have 
 caused a rebellion, considering the high state of excitement 
 
 D
 
 50 
 
 into which similar acts of injustice had recently wrought the 
 minds of the people ; and the former alternative the govern- 
 ment had not the means of adopting, or it would have been 
 discovered that to prepare for the amendment of the coin by 
 first grossly debasing it, was an expedient no less unprofitable 
 than unprincipled. It was therefore deemed impossible to 
 suppress the circulation of bad money ; and all that could be 
 done was to enact various penalties to prevent the bad from 
 absorbing the good money. Parties exchanging the good for 
 more than its current value, were subjected to heavy fines and 
 imprisonment. 
 
 A short time previously money was so unworthy of being 
 hoarded, that persons would employ it to great disadvantage 
 rather than keep it ; now, however, it was so scarce, that ac- 
 cording to the king's journal, the usual rate of interest was 
 14 per cent, per annum ; to counteract which the taking of 
 usury was altogether prohibited by law. All this being insuf- 
 ficient to make money more plentiful, the law of the 17 Ed- 
 ward IV. was renewed, whereby it was made felony to carry 
 any kind of money or plate out of the kingdom ; and gold- 
 smiths and others were prohibited from using gold and silver 
 for articles of luxury. The strictness with which it was designed 
 to prohibit the export of gold and silver, is rendered apparent 
 by the minute exception shortly afterwards made, viz. that 
 merchants might take 41. in money with them for their ex- 
 penses. These measures, however, were so far from rendering 
 the circulation more abundant, that they rather produced the 
 contrary effect, — as the greater was the anxiety of govern- 
 ment to force the holders of coin to part with it, the greater 
 would naturally be their inducement to keep it. The early 
 death of Edward put a stop to further measures.
 
 5i 
 
 MARY. 
 
 Through the short reign of Mary, good and bad money 
 were allowed to circulate together under the royal sanction, 
 pretty much as they had done before her accession to the 
 throne. The queen made great professions of her intention to 
 complete the reformation of the coin : notwithstanding this, 
 her good money was of rather lower standard than that of the 
 preceding reign ; and it also appears, that by her authority a 
 considerable quantity of base money was coined and issued. 
 The opportunity of reforming the coin was now, however, be- 
 coming peculiarly favourable, in consequence of the diminu- 
 tion of the mercantile value of silver in Europe, from the 
 increased supplies derived from the New World. 
 
 ELIZABETH. 
 
 This sensible and spirited woman had both the ability and 
 the will to avail herself of the favourable circumstances in 
 which she was placed for bringing the silver money of Eng- 
 land to a par with the gold money. As concerned her English 
 dominions, she was alive to the advice of her counsellors when 
 they told her that it was for the honour of the crown and the 
 wealth of the prince and people to restore the standard to its 
 ancient purity, *' and that it was not the short ends of wit 
 nor starting-holes of devices that could sustain the expence of 
 a monarchy, but sound and solid courses." This looked well 
 in theory, and was attempted to be practised with respect to 
 England ; but Ireland was still fated to endure the miserable 
 consequences of a policy dictated by ^' the short ends of wit, 
 and the starting-holes of devices." For whilst the queen's 
 government were preparing to suppress the circulation of base 
 monies in England, a commission was granted to the chief 
 officers of the mint to coin 12,000 pounds of the base Enghsh 
 
 d2
 
 52 
 
 money into 20,000 pounds Irish ; and a further commission 
 was afterwards granted, authorizing her majesty's money- 
 makers to alter the base monies then current in England into 
 harp shillings and groats, to be defrayed about the queen's 
 affairs in Ireland — 4000/. of such money to be coined into 
 8000/. Irish, after the standard of 3 oz. fine silver to 9 oz. 
 alloy — the pound troy to be coined into 40s. : so that a pound 
 weight of fine silver, which in England was at this time worth 
 about 3/. 5s. sterling;, in Ireland was to be worth 8/. 
 
 By this device it is probable the knowing ones in England 
 got rid of their base coin, so that when the base monies in 
 England were cried down, the loss fell chiefly upon the more 
 simple kind of folks. 
 
 The shilling, or teston, which Edward had brought down to 
 sixpence, was now reduced to fourpence halfpenny, the two- 
 penny piece to three halfpence, and the penny to three far- 
 things. Certain shillings which were marked with a lion, a 
 rose, a harp, or a flower-de-luce, and which it was stated were 
 so base and full of copper as to be easily known, were only to 
 pass for twopence farthing. Probably these were the coins of 
 3 oz. fine and 9 oz. alloy, issued by authority of Edward the 
 Sixth, and the counterfeits of that coinage. These twopence- 
 farthing shillings, or testons, were only to be allowed to 
 circulate even at this rate for four months ; and in the mean 
 time the holders were invited to bring them and the other base 
 monies to the mint, where they were to be exchanged after the 
 above rates for good new money. As a further inducement to 
 bring the old money to be exchanged for new, those who 
 brought it to the Mint were to have threepence in the pound 
 over the above rates. It was justly anticipated in the procla- 
 mation announcing the above changes in money, that the coin 
 would not go so far as formerly in the purchase of provisions, 
 &c. To counteract this, all justices were commanded to 
 punish those with speed and severity who should seek to ad- 
 vance the accustomed price of victuals.
 
 53 
 
 Immediately after the abovementioned proclamation was 
 issued, reducing the value of the current coin, her majesty 
 caused a summary of her reasons for the alterations to be pub- 
 lished, wherein it is stated to be a truth well known, that " the 
 honour and reputation of the singular wealth that this realm 
 was wont to have above all other realms, was partly in that it 
 had no current monies but gold and silver ; whereas, on the 
 contrary, all other countries, as Almain, France, Spain, Flan- 
 ders, Scotland, and the rest of Christendom, have had, and 
 still have, certain base monies." But as the money of Eng- 
 land had of late grown into infamy and reproach, it had there- 
 fore been thought necessary that it should be recovered. And 
 in the attainment of this end, as her majesty meant for her 
 part to be at great charges, so every good English subject 
 ought to be content, though it was some small loss to him at 
 the first. As one consequence of the issue of this base money, 
 the proclamation stated that counterfeiters, both at home and 
 abroad, had uttered testons or shillings first for twelvepence, 
 afterwards for sixpence, which were really not worth more than 
 twopence ; and so, for small sums of money counterfeited, had 
 carried out of the realm six times the value of it in rich com- 
 modities — that although King Edward and Queen Mary had 
 coined great quantities of gold and silver, yet no part thereof 
 was seen in the currency, some being carried out, and some 
 perchance hoarded hy the loiser sort, as it were to be ivished that 
 the ivhole ivere. It was further alleged, that although the 
 earth had been plentifully productive, yet that the price of 
 things had risen immeasurably, and no remedy could be de- 
 vised for reducing the same, but to reduce the base monies to 
 their just value ; for, says her majesty, " every man of the 
 least understanding knew that a teston was not worth 
 sixpence, and therefore no man would give that which was, 
 and ever had been, worth sixpence, for a teston, but 
 rather would require two testons ; and so a thing being 
 worth sixpence was bought and sold either for two tes-
 
 54 
 
 tons, or one and a half, which was in reckoning twelve- 
 pence or ninepence. Whereas, every teston being brought 
 to its just value, it must needs follow that one shall buy that 
 for four-pence halfpenny which was wont to cost six-pence ; 
 so that what he may lose by the bad money, he will gain by 
 the next good money he shall get. By this means the ex- 
 change in favour of the monies of England shall rise in es- 
 timation as formerly, and the foreign commodities be thereby 
 bought for easier prices ; so that every man ought to thank 
 God that he may live to see the honor of his country thus 
 partly recovered from the privy thief, which is the counter- 
 feiter." — The address did not fail to set forth the great bene- 
 fit which was to arise from the reformation of money to all 
 poor people living upon daily wages, all mean gentlemen 
 who were living upon pensions and stipends, and all those 
 living on soldier's pay, which being to be paid in good and 
 fine monies, would therefore yield more necessaries for their 
 sustentation than their wages formerly did. 
 
 Such were some of the reasons which the cabinet of Queen 
 Elizabeth addressed to the nation, to reconcile the people to 
 the loss which this further reduction of the money threw 
 "upon them. Two errors are especially to be noticed in the 
 reasoning of this address : 1st. It is assumed that the value of 
 silver in coin rests upon the same single principle of barter 
 as if it were a mere mercantile commodity : and, 2ndly. It is 
 supposed that the possessors of money would circulate it as 
 freely in the employment of labour, when it was good enough 
 to be hoarded, as when it was so bad as not to be worth keeping. 
 
 Experience had shewn that the market price of silver 
 in England had a natural tendency to approximate to the 
 mint price ; but it had also shewn that, at least since the 
 introduction of gold into the English coinage, the two prices 
 were by no means the same. In 1544 (the 36th of Henry 
 the Eighth) a proclamation announces the market price of fine 
 silver to have been recently advanced to 4s. per oz. that is,
 
 55 
 
 4s. in coin ; but an ounce of fine silver at that time coined 
 into money was current for 4s. 8c?. In the course of the same 
 year, whilst the market price was still 45. per oz., the king 
 caused his coin to be composed of one half base metal, and 
 yet its money value to be retained, so that fine silver, when 
 coined, was then worth 8s. per oz., or double the market price. 
 In the following year he further debased it so much, that an 
 ounce of fine silver in coin was made worth 12s. Four 
 years after this, when Edward the Sixth coined money so as 
 to make 12s. in coin out of an ounce of fine silver, the market 
 price of fine silver had risen to 5s. 4d. per oz. And two years 
 after that, when the same king coined an ounce of fine silver 
 into 1/. 4s. sterling, in ordei-, as it was said, to get means for 
 paying off the national debt, defending the nation and amend- 
 ing the coin, he then was obliged to offer 10s. of this money 
 for an ounce of fine silver. This, no doubt, was somewhat 
 above the previous market price, as a temptation to merchants 
 to become the utterers of such base money ; but base and 
 worthless as it was intrinsically, yet possessing the super- 
 scription and stamp of the monarch of England, 10s. of it 
 were made, at the time, to have the same value in an English 
 payment as an ounce of fine silver ; the silver gaining in 
 power from possessing the king's sanction, what it wanted in 
 intrinsic purity. Thus it appears that whilst the value of silver 
 uncoined is entirely dependent upon the principle of barter, 
 the value of coined silver is made up partly of the mercan- 
 tile value of the raw material, and partly of the royal sanc- 
 tion, the relative quantity of each being varied according to the 
 power, will, or necessities of the monarch. 
 
 In the foregoing remarks it is seen that Henry the Eighth 
 and Edward the Sixth made money with a large proportion of 
 royal prerogative, and only a small proportion of pure metal. In 
 after-times, when the power of James the Second was about to 
 expire, we have an extraordinary instance of the extent to 
 which this principle of constituting value might be carried.
 
 56 
 
 By the threat of the halter, and the aid of the soldiery, he was 
 enabled to make 10/. sterling with only four pennyworth of 
 metal, the remaining 9/. 195. 8d. being all derived from royal 
 power. As the failure of James to retain his crown constituted 
 the proof that he had no right to exercise the kingly preroga- 
 tive of coining money, so his successor did not feel himself 
 bound to fulfil James's pledge to take it back for taxes at the 
 rate at which it was issued. It was, therefore, immediately 
 cried down ; the piece of money which tradesmen and others 
 had been compelled to take for the half-crown was reduced to 
 one penny, and the shilling to one farthing. But it may be 
 questioned on what other principle than that of mere arbitrary- 
 power, King Edward and Queen Elizabeth reduced the value 
 of the teston. The teston was coined by Henry VIII. as a 
 shilling, and was to pass for twelve pence. The proclamation 
 of King Edward speaks of it as " the piece of twelve pence, 
 called a teston ;" and, therefore, it had the same title, viz. 
 the sanction of the acknowledged monarch, for representing 
 twelve pence, as the penny had for representing one penny. 
 But, admitting this, then the monarch who had paid them 
 to the people for twelve pence, was bound in equity to take 
 them again from the people at the same rate, for taxes, pre- 
 vious to their value being reduced. 
 
 The supposition that the possessors of money would part 
 with it as freely when it was intrinsically good as they did 
 when it was intrinsically bad, is made the foundation of the 
 reasoning of that part of the address which was designed to 
 show that poor people living on daily wages, mean gentlemen 
 living upon pensions and stipends, and soldiers living on fixed 
 pay, would be benefited by the change. Gentlemen, whether 
 mean or noble, whether living upon pensions or annuities, or 
 deriving their income from lands, whilst they could get their 
 former revenues paid, would of course derive benefit from the 
 increased value of money : soldiers also, whose pay proceeded 
 directly from the prince, and only indirectly from the people, 
 and whose services might be essential to enforce the payment of
 
 57 
 
 the revenue, would not have their wages lowered according to 
 the increased value of money ; it is no wonder, therefore, 
 if the queen and her measures were popular with them. But 
 poor people living upon daily wages, depending upon the 
 voluntary employment of the more wealthy, would not find 
 Elizabeth's golden promises so completely realized. On the 
 contrary, the want of employment at adequate wages would be 
 the natural consequence of an increased value of money 
 then, in like manner as the same cause produces the same 
 efi'ect now ; and this, together with the loss of subsistence 
 previously derived from religious houses, probably caused the 
 poor-laws, which Elizabeth established, to become imperatively 
 necessary. 
 
 Meanwhile the middle classes of society, such as farmers 
 and tradesmen, were not much more equitably treated than 
 the poor. Their commodities were liable to be valued by 
 officers appointed by the government, and the owners were 
 forced to part with them at a reduced rate ; for if prices had 
 been allowed to remain nominally the same, then mean 
 gentlemen and soldiers would have derived no benefit from 
 the increased value of money : they were therefore lowered, 
 so that a commodity accustomed to be sold for a teston, 
 when it was valued at sixpence, should be sold for a teston, 
 valued at fourpence halfpenny. But by this arrangement the 
 producers or venders of the necessaries of life could not pay 
 rent and taxes as before, and, consequently, stipends and 
 annuities according to the old scale would fall off, whence 
 the mean gentlemen and soldiers would be forced to lose 
 in the nominal amount of their pensions as much as was 
 given them in the improved specific worth of money. True, 
 but by a sacrifice of capital on the part of the producers, 
 or venders of the necessaries of life, the queen's promises to 
 these gentlemen might for a time be realized ; and so they 
 were. And upon the same principle a farmer, in modern days, 
 having saved a thousand pounds, may pay, even for ten years,
 
 58 
 
 100/. per annum, for rent and taxes, and other outgoings, more 
 than the profit of his farm, before he himself comes to the 
 parish. To the parish, however, he must come at last, and 
 himself and family become a dead weight on the proprietor of 
 the soil; or his rent and taxes must be lessened in the 
 same degree that his receipts are diminished. 
 
 By the same short-sighted policy which leads the poor me- 
 chanic and labourer of the present day to expect that he shall 
 continue to receive the same daily wages when provisions and 
 clothing are low in price, as when they were high, the 
 cabinet of Queen Elizabeth was certainly governed when it 
 propounded the foregoing argument. Possessed of great 
 power, and resolved to spare no pains in enforcing their decree 
 that the prices of commodities should be regulated by magis- 
 trates, and not by the buyer and seller, they might have suc- 
 ceeded in their views, had success been possible. But upon 
 former occasions, the like sapient policy had been adopted, 
 until the market was so badly supplied with provisions that it 
 was with difficulty enough could be obtained for the king's 
 household ; and similar consequences ensued now. 
 
 Stowe says, that in October 1563, London was visited with 
 a three-fold plague — pestilence, scarcity of money, and dearth 
 of victuals; and that Michaelmas term was not kept. These 
 calamities, which came upon the nation almost as soon as the 
 new coinage was completed, were the natural consequences of 
 that measure, and of the steps by which it was accompanied. 
 When money was made worth hoarding, and by restraints on 
 profit capital was driven from employment, famine and sick- 
 ness were sure to follow. 
 
 In the new coinage the pound weight of gold of twenty- 
 two carats fine, and two carats alloy, was made to represent 
 33/. Sovereigns were coined of this gold, to be current for 
 20s., which weighed seven pennyweights, six grains and a half. 
 Gold of this quaUty is distinguished as the new standard. 
 The old standard was twenty-three carats, three grains and a
 
 59 
 
 half fine, and only half a grain alloy. Henry the Eighth was 
 the first English monarch who debased it. In his eighteenth 
 year, he caused the pound weight of gold of twenty-two carats 
 fine, and two alloy, to represent 251. 2s. 6d., coining it into 
 crown pieces, and not into nobles, angels, &.C., from which cir- 
 cumstance it was afterwards called crown gold. In his thirty- 
 seventh year, he further debased the standard to only twenty 
 carats fine, and four carats alloy, and the pound weight was 
 then to make 30/. This lowest standard was not continued ; 
 but crown gold remained in use, and was sometimes distin- 
 guished by writers as the new standard, and sometimes as 
 crown gold. From the time of Henry the Eighth to Charles 
 the First, the old and new standards were in use together, 
 the value being adjusted according to their relative fineness. 
 Since Charles I. crown gold has been the only standard. 
 
 Elizabeth coined the pound weight of crown gold into 33/. 
 and the pound weight of the old standard into 36/., which pro- 
 portions were as nearly as possible equal to 30/. coined out of 
 the pound weight of gold of 20 carats fine and 4 alloy ; so that 
 Elizabeth valued gold in her new coin exactly the same as 
 Henry the Eighth did in his basest coinage. In the value of 
 gold money, therefore, Elizabeth virtually made no improve- 
 ment. AH that she attempted was to restore the silver money 
 to the same value, in relation to gold money, which it pos- 
 sessed in the time of Henry the Seventh. She did not in- 
 tend to restore the pound sterling either of gold or silver 
 to the same weight and purity which it possessed in her 
 grandfather's reign, as some may imagine, for in that case 
 the pound weight of gold, of the old standard, must have 
 made only 22/. 10s., and the pound weight of standard silver 
 1/. 17s. 6d.; but she did restore silver coin to the same value, 
 in relation to gold, which it held in the reign of Henry the 
 Seventh, by coining the pound weight of standard silver into 
 3/. sterling, which, in proportion to 36/., is precisely what 
 I/. 17s. 6d. is to 22/. 10s.
 
 GO 
 
 In thus restoring silver to the same relative value with 
 gold money, which it bore in the reign of Henry the Seventh, 
 Elizabeth flattered herself that she had settled the money ques- 
 tion upon a lasting basis ; that " she had (as she expressed 
 it,) conquered that monstei; which had so long devoured 
 her people ;" but the subsequent History of England, and 
 even that of Elizabeth's own reign, shews that though 
 his power was checked, the monster was not annihilated. 
 
 The queen was pledged by principle, by ambition, and by 
 vanity, to keep the money of England upon the basis on 
 which it was now placed, and she spared no pains to do it; 
 but all her power and policy were inadequate to the task. 
 Her credit was good, and she borrowed largely : the mines 
 were also very productive, and the wealth of those who un- 
 derstood the mystery of money was greatly on the increase ; 
 but the coin in circulation was far below the necessities of 
 the people. Its scarcity was indeed so great that the people 
 were willing to take it however imperfect, and this opened a 
 wide field for the practices of clipping and counterfeiting : 
 clipped money accordingly soon formed a considerable part of 
 the circulating medium of England, in defiance of all the se- 
 verity used by the crown to check its progress ; and this caused 
 the relative value of gold and silver, and the rate of exchange 
 between England and foreign countries, to be disturbed. For 
 though an English shilling or sovereign having lost somewhat 
 of its coined weight, was fully adequate to discharge an Eng- 
 lish obligation of one shilling or one pound ; yet their value 
 against each other, and their foreign value, varied with every 
 diminution of their original weight: and thus merchants 
 and brokers were enabled to buy up the gold money of 
 full weight with the current silver of diminished weight, 
 and the silver money of full weight with current gold of 
 diminished weight. So there were two standards to which the 
 money was conformable ; one the legal coining standard, the 
 other the current standard. The coining standard, after Eliza-
 
 61 
 
 beth had restored the money, required 7 dwts. 6| grains of 
 gold, of the same degree of fineness as our present sovereign, 
 or twenty shiUings, each weighing 4 dwts, of silver of stan- 
 dard fineness, to represent the pound sterling ; but the current 
 standard was limited only by the lowest weight at which it 
 was possible to get money into circulation. Under the sanc- 
 tion of this double standard, therefore, the person who wanted 
 to pay away money in the home market profited by selling his 
 heavy gold and silver to the merchant, for which he received 
 an increased numerical amount of current money in exchange, 
 whilst the merchant had his profit in the foreign market, in 
 the superior weight of the money which he bought. The na- 
 tural effect of this traffic was to cause all the best gold and 
 silver money to be abstracted from circulation as an article of 
 merchandize rather than of currency ; and to render it impos- 
 sible for the government to coin and issue money according to 
 the legal standard, without being subjected to continual loss. 
 
 Pressed with this difficulty, Elizabeth (notwithstanding her 
 often repeated determination to preserve the standard invio- 
 late) for some time secretly connived at the legal standard 
 being departed from by the mint master ; and when in conse- 
 quence of the officiousness of one of the officers of the mint, 
 the variation betwixt the coinage and the indenture for coin- 
 ing could no longer be concealed, she publicly announced that 
 for great and urgent causes, she was compelledyb/- a short time 
 to tolerate some deviation from the express words of the for 
 mer indentures. This happened at the commencement of the 
 21st year of her reign, and to this day the short time is un- 
 expired. 
 
 The first departure from her original standard was appa- 
 rently triflino;. It was ordered, that the pound weight of gold re- 
 duced in purity by one quarter-grain more of alloy, should make 
 36/. I5. \Q\d.; and that the pound weight of silver with one 
 dwt. more of alloy than the former standard, should make 
 3/. O5. 3(/. Trifling as this first alteration may appear to be.
 
 G2 
 
 it was important as to its cause and consequences. It clearly 
 proved, that Elizabeth had not discovered the secret of settling 
 for ever the money question. This evasive mode of com- 
 bating the monster, (as she called the evils of the money sys- 
 tem), was rather an acknowledgement of his invincibility; and 
 before the conclusion of her reign, facts made it evident that 
 he was still able to distress both prince and people. For the 
 abuse of exchange, as the evil was denominated, had in the 
 latter years of this queen's reign risen to such a pitch as to 
 occasion a loss to England of 500,000/. annually, at least at 
 that rate it was estimated in her 42d year, by the lord-keeper 
 of the great seal, and the lord high treasurer : and yet in her 
 43d year the like evasive mode of meeting the evil was again 
 had recourse to. It was then enacted, that the pound weight 
 of gold should be coined into ten shillings more than the 
 queen's original standard ; and the pound weight of silver into 
 two shillings more. Thus terminated Elizabeth's attempt to 
 make the money of England " always the same," in accord- 
 ance with her motto. During this reign, the measures adopt- 
 ed with respect to the currency of Ireland were of a character 
 to rival for injustice the worst of those which Henry the 
 Eighth and Edward the Sixth had adopted towards England, 
 
 JAMES THE FIRST. 
 
 The experience of Elizabeth's reign proved, that though 
 she had power to restore the coinage at the commencement of 
 her reign, by inflicting great injustice on the holders of the 
 currency, it was beyond her ability to keep the coinage and 
 currency at par. Her last attempt, in her 43d year, to make 
 the mint value conformable to the current value of money, 
 was presently found to be no more successful than that which 
 had been made in her 21st ; for within four years after we find 
 her successor King James, alleging in a proclamation, that the
 
 63 
 
 relative value of gold to silver in England was imperfectly 
 adjusted, and that he had therefore deemed it necessary to 
 make a new coinage of gold, in which the pound weight of 
 crown gold was coined into 37/. 4s., which is 3/. 14s. more than 
 the last coinage of Elizabeth. A new name was also given to 
 the piece of money representing the pound sterling : viz. an 
 unit or nniti/ ; Queen Elizabeth called it a sovereign. The 
 unit weighed only 6 dwts. 10| grains ; whilst the reduced so- 
 vereign of Queen Elizabeth weighed 7 dwts. 4 grains. 
 
 But the whole history of James's reign show s that this 
 system was no more successful in his hands (largely as he 
 was disposed to act upon it,) than in those of his predecessor ; 
 neither w^as it likely that it should be successful. As well 
 might a man expect to find his way in a foggy night by fol- 
 lowing a Will-o'-wisp, as a king expect to find a fixed standard 
 for his money, by acknowledging both a gold and a silver stan- 
 dard, and by adjusting the weight and purity of his new coin 
 to the weight and purity of the current money. The further 
 this system is pursued, the further it must always lead astray. 
 By following it the Scotch pound had, at that time, become 
 reduced to twenty-pence of English money, and the French 
 pound or livre to two shillings, (since which it has fallen to 
 tenpence) ; yet the only alternatives James had, were to follow 
 this ignis jatims, or to adopt the unjust expedients of former 
 times for supplying the mint with the material for money. 
 He chose the former, and accordingly reduced, in the second 
 year of his reign, the gold representative of the pound ster- 
 ling, from 7 dwts. 4 grs, to 6 dwts. 10| grs. 
 
 Notwithstanding this large reduction in the weight of the 
 gold pound, the scarcity of gold and silver soon afterwards 
 became very great, wherefore taking it for granted that the 
 money was exported, the king appointed a committee, in his 
 eighth year, to inquire into the cause. The causes were re- 
 ported to be these : the weight, the fineness of the standard, 
 the relative value of the monies in gold and silver, and the
 
 64 
 
 abuse of exchange for monies by bills, wherein all the former 
 were included. This last, it is to be observed, was a new 
 cause which had grown up in consequence of the credit that 
 had now become attached to merchants' bills of exchange. 
 The difference of weight, fineness, and valuation, the com- 
 missioners declared were not true causes of exportation, if 
 there were betwixt countries a due course holden in the ex- 
 change of money ; but that due course not being observed, 
 then they might accidentally become causes : that is to say, 
 amongst merchants and buUionists, there is no reason why the 
 weight, fineness, and relative value of one kind of metal money 
 to another should not be understood and adjusted, as well on 
 one side the English channel as the other, and if so, then no 
 mercantile profit was to be got by the transport of it on ac- 
 count of its weight and fineness, unless the usual course in 
 the exchange of money were disturbed by some other cause. 
 This was all good reasoning, but when they stated this dis- 
 turbance to have arisen from an overbalancing of foreign 
 commodities, increased by the immoderate use of them, and 
 by neglect of setting the people on work, they only explained 
 one difficulty by starting another. It was, however, represent- 
 ed to the king as a fact, that the gold coin called the unit, 
 which was current for a pound sterling in England, was 
 valued in foreign parts at \L 2s. sterling. This effect was 
 stated to have been produced by the increased importation 
 of silver from America ; but the truth was, that though the 
 silver standard in England had not been officially altered from 
 the last standard of Elizabeth, yet it was virtually altered by 
 the silver in circulation getting worn down or clipped, so that 
 upon an average the unit was really equivalent to 22s. of the 
 silver money, when both were brought to the goldsmith's 
 scales, and determined by the relative value of the metals 
 fairly rated. Instead, however, of restoring the silver 
 money to its legal specific weight, which ought to have been 
 the case, if the increased importation of it had caused the
 
 65 
 
 derangement, James ordered that the gold money should be 
 raised 10 per cent, in its numerical value, and that the unit 
 should thenceforth be current in Eno-land for 1/. 2s. sterlino-, 
 and all other gold monies in proportion. 
 
 As this enhancement of gold went somewhat beyond the 
 absolute difference in the mercantile value of gold and silver, the 
 effect of it was for a time to bring gold to England, and to cause 
 a comparative scarcity of silver, insomuch that it was in serious 
 contemplation to alter the silver standard, so as that the pound 
 weight should be coined into 66s. instead of 62s. ; but by the ad- 
 vice of several eminent merchants this measure was suspended. 
 By a new coinage of gold, which took place at this time, a 
 new piece of gold was authorized to represent the pound ster- 
 ling. Its weight was five pennyweights, twenty grains and a 
 half. It was still called an unit ; but to distinguish it from 
 the unit of 22s. value, its common appellation was a " Laurel," 
 because the king's head upon it was surrounded by a laurel- 
 wreath. Though by this coinage gold experienced a further 
 trifling enhancement, viz. of 2s. Sd. in the pound weight, yet 
 the pound sterling having now a distinct representative in 
 gold (which it had not during the time that the old unit repre- 
 sented 22s., for then the pound sterling had no other represen- 
 tative than 20.S. in silver), the extra demand for silver for mer- 
 cantile purposes was for a time checked. It was, however, 
 only a temporary check ; for, in defiance of all the expedients 
 which James and his councillors could adopt to prevent mer- 
 chants and goldsmiths from giving better prices for the mate- 
 rial of money than those held out by his majesty's mint, the 
 scarcity of money in circulation became every day more se- 
 verely felt. 
 
 At the commencement of this reign, the money of Ireland, 
 which had been of the standard of only three ounces fine to nine 
 ounces alloy, was ordered to be made of the standard of nine 
 ounces fine to three ounces alloy ; and the magistrates were 
 required to see that the prices of provisions were adjusted t>.
 
 66 
 
 this increased value of money, in like manner as had been 
 done in England by Queen EUzabeth. As much confusion 
 had arisen from the application of the word " sterling" to the 
 improved Irish money, in consequence of his majesty having 
 used that term in an ordinance, it was ordered that the word 
 sterling should be utterly abolished in reference to Irish mo- 
 ney, and that the shilling of Ireland should be called twelve- 
 pence Irish, and not twelvepence sterling. 
 
 CHARLES THE FIRST. 
 
 Till this time, and especially during the reigns of Henry 
 the Eighth, Edward the Sixth, Mary, and Elizabeth, it had 
 been the lot of the people to bear all the evils arising out of a 
 vacillating money system ; but now the tables were turned, 
 and it became the fate of the king to suffer from it. We have 
 already observed that James the First followed this shifting 
 system whithersoever it would lead him ; the consequence of 
 which was, that his son Charles inherited the crown under 
 such embarrassment, that turn whatever way he would, he 
 could not extricate himself. It is to be recollected, that from 
 the time of Henry the Seventh, the strength of parliament had 
 been rapidly on the increase. That monarch having the 
 talent to render the power of parliament subservient to his 
 personal avarice, fostered its growth. His son, Henry the 
 Eighth, found the support of parliament very useful in liber- 
 ating his crown from the inconvenient interference of the 
 pope, and by availing himself of its aid, he infused further 
 strength into its constitution. The succeeding reigns of Ed- 
 ward the Sixth, Mary, and Elizabeth, were very favourable for 
 the confirmation of that strength ; so that when Elizabeth had 
 settled, as she thought, the principles upon which money was
 
 67 
 
 thenceforth to be coined, she bound the crown to conform to a 
 law for the coinage of money, which another power in the state 
 was now in a fit condition to enforce. But aoainst such confor- 
 mity to the legal principles which governed the coinage, those 
 practical principles, which regulated the currency, formed a 
 natural and insurmountable impediment. Instead, therefore, 
 of Elizabeth having by her money laws destroyed the money- 
 monster, as she vainly hoped, their establishment had, in fact, 
 only tended to bring both prince and people more decidedly 
 beneath its grasp. 
 
 It was the fate of Charles the First to afford melancholy 
 proof of the truth of this assertion. Inheriting with his 
 father's kingdom his father's debts, and being involved in a 
 foreign war, he found his occasions for money soon surpass 
 all common means of supply. His first expedient was to 
 enhance the value of both gold and silver in coin. Accord- 
 ingly, in his second year, a commission, bearing date the 14th 
 of August, was granted for coining the pound weight of silver 
 into 3/. 10s. 6d. sterling, and the pound weight of crown gold 
 into 44/. The effects of this regulation would be, first, that 
 all old monies, whether of gold or silver, would become mer- 
 chandize, and thereby cease to circulate as mere currency ; 
 and, secondly, that by the silver being enhanced much more 
 than gold, the gold would be entirely bought up with silver by 
 the bullion dealers. Such would seem to have been its imme- 
 diate consequence ; for so early as the fourth of the following 
 month, a proclamation was issued for the purpose of indirectly 
 annuUino- the coinage under the commission of the 14th of Augrust. 
 By that proclamation it was ordered, that all gold and silver 
 monies should only be legally current in such species, and at 
 such weights, fineness, and value, as the same were current at on 
 the first day of August preceding ; and that all monies of gold 
 and silver coined since the said first day of August, in any 
 other manner than according to the proclamations which were 
 in force upon that day, should be esteemed but as bullion, and 
 
 E 2
 
 68 
 
 not be current. Rapidly as these changes were made to take 
 place, there can be no doubt that those who understood the 
 mystery of money would be quick enough to make great 
 advantage of them, at the cost of others who were ignorant of 
 the consequences. 
 
 By a commission for coining, bearing date the 7th of Sep- 
 tember, the same regulations as to weight and fineness were 
 returned to, which were in existence when Charles came to 
 to the throne. But this little flirt (as it were) with the value 
 of money, had taught the bullion dealers and the people gene- 
 rally, to take good care of their old money ; so that the scar- 
 city of it in circulation was increased ; and as from the repeated 
 enhancements of the value of gold in its relation to silver 
 since the time of Elizabeth, the silver money afforded rather 
 more profit for foreign payments than gold, so it became a com- 
 mon practice for bullion-dealers to cull the weightiest and best 
 of the silver money (for which, according toKushworth's account, 
 they gave a premium of two and sometimes three shillings in 
 the hundred pounds), to melt and transport the same. The defi- 
 ciency of silver money in relation to gold increased so much, 
 " that the drovers and farmers, who brought cattle to Smith- 
 field, would commonly make their bargain to be paid in silver; 
 and it was usual to give twopence, and sometimes more, to 
 change a twenty-shilling piece of full weight." After this, a 
 large quantity of silver was, for some years, brought to the 
 English mint to be coined, under an agreement which was 
 entered into betwixt England and Spain : but instead of 
 making money in general circulate more plentifully, it only 
 caused the export or monopoly of gold to become profitable 
 and practised ; till in the end, the foreign demand for English 
 money, first silver, and then gold, aided by the monopoly 
 at home, caused the want of coin in circulation to be- 
 come an evil too great for the king to surmount. 
 
 In 1639, his Majesty was made to feel his dependance upon 
 parliament and the monied interests of the nation. In the
 
 69 
 
 parliament which met at Edinburgh that year, it was de- 
 manded of the king that the coin of the kingdom should not 
 be meddled with but by the advice of parliament. This 
 attempt to invade his prerogative, as his Majesty called it, he 
 resisted in high terms, saying, " The coin is a prerogative 
 most peculiar to the crown, and none can meddle with it but 
 by our consent, without incurring the punishment of high 
 treason, as it is in all kingdoms." But these were vain words, 
 and only evinced, that in proportion as actual power is lost, 
 the apparent owner is likely to become more than usually 
 tenacious of its semblance. Charles presently found to his 
 cost that he had no legal means of possessing himself of the 
 material of money in quantities adequate to his wants, and 
 that without this the prerogative of coining was an idle pri- 
 vilege. To relieve himself from this difficulty, he notoriously 
 broke those laws, the maintenance of which constitutes the es- 
 sential condition on which an English monarch holds his 
 crown. In the month of July 1640, he gave orders to seize 
 upon the bullion in the Tower, which had been brought thither 
 by merchants from abroad, to be coined. But not being- 
 honest enough to stick to the right, nor yet wicked enough to 
 persevere in a wrong cause, and finding that this unjust pro- 
 ceeding would effectually prevent any more metal from being 
 brought into the Tower, he was induced to release it on con- 
 dition of one-third part, viz. 40,000A being lent to him. Thus 
 the king lost the bulk of the money, and did not regain the 
 confidence of the people. On the contrary, in a petition on 
 the 24th of April following, by the citizens of London, a peti- 
 tion subscribed, as it is said, by 20,000 persons of good rank 
 and quality, it was stated, " that the stopping of the money 
 in the mint, which, till then, was accounted the safest place 
 and surest staple in these parts of the world, did still hinder 
 the importation of bullion." 
 
 Another scheme which Charles had recourse to for getting 
 money, was such as, at the present time, would deprive a
 
 70 
 
 common man of the benefit of the insolvent debtor's act : he 
 became a trader, and bought on credit a large quantity of 
 pepper, which he sold again immediately, for money, at a rate 
 much under its value. He next wished to do as Henry the 
 Eighth and Edward the Sixth had done, viz. to make a larger 
 quantity of money out of the same quantity of silver. It was 
 debated in council to mix silver and copper together, and to 
 coin to the value of 300,000/. : the coin to be such, that 
 three-pennyworth of silver, added to a certain quantity of 
 copper, should be made current for one shilling. But herein 
 he was made to feel his weakness. Sir Ralph Freeman, 
 master of the mint, well knowing that parliament would be 
 able and willing to make good the sentiments he expressed, 
 declared to Lord Strafford that the servants of the mint-house 
 would refuse to work the copper money, to which the earl is 
 reported to have replied, *' Then it were well to send those 
 servants to the house of correction :" and to the house of cor- 
 rection, or something worse, both they and the master of the 
 mint would have gone, if they had ventured to utter the like 
 sentiments in the time of Henry the Eighth ; but the arbitrary 
 power of the crown had now received a check, from which it 
 could not recover, and was itself made to yield obedience to 
 the supreme dominion of gold and silver. 
 
 Charles having, in such instances as these, set at nought 
 the sacredness of his own laws, was met by his opponents 
 upon the common ground of mere natural power ; each party 
 seeking its strength in the means it had of raising money. 
 The two universities, and the king's party, supported the king 
 with all their plate, and the great bulk of the people supported 
 the parliament with all the bullion they could muster. Hu- 
 dibras very justly called it the cause of gold and plate, and 
 ridiculing the eagerness with which the people brought forth 
 their gold and silver vessels, he says, — 
 
 For when they thought the cause had need on't, 
 
 Happy was he that could get rid on't.
 
 71 
 
 Did they not coin pots, bowls, and flaggous, 
 Into officers of horse and dragoons ? 
 And into pikes and musqueteers 
 Stamp beakers, cups and porringers? 
 The result of the contest is well known. 
 
 In 1647, parliament having resolved to stop the circulation 
 of clipped money, ordered that it should only be received as 
 bullion ; but this regulation was not to apply to old monies 
 which had grown light through wear. 
 
 In proportion, however, as the intrinsic value of the coin 
 was increased, the inducements to circulate it were dimi- 
 nished, and the parliament became so distressed for money 
 wherewith to pay the army, that they gave orders to seize the 
 public treasuries of Goldsmiths', Weavers', and Haberdashers' 
 Halls. And notwithstanding twenty milhons of money were 
 coined within twenty-five years, according to the mint books, 
 it was almost all transported or melted down ; so that weighty 
 gold, as a writer of that time observes, was as precious in the 
 kinodom as diamonds. 
 
 OLIVER CROMWELL. 
 
 Cromwell was indebted to a lucky accident for the means 
 of fixing the powers of government absolutely in himself. 
 Three Hamburgh ships, having 300,000/. in silver on board, 
 had been detained upon suspicion that it was the property of 
 the Dutch. Cromwell hearing of the silver, ordered a detach- 
 ment of soldiers on board, and seized it. Having thus pos- 
 sessed himself of money, he was emboldened to take upon 
 himself the right to dissolve the parliament. The grand 
 secret of Cromwell's policy appears to have been, with money 
 to govern the army, and with the army to govern the people ; 
 and thus governing the people by mere military power, he
 
 72 
 
 was provided with the means of getting money, or the material 
 of money, wherever it was known to exist. The alienation and 
 sale of church and other property, was also a fertile source 
 of revenue to him ; and for the few years that this system con- 
 tinued, there was such an increased quantity of money in cir- 
 culation, as justified a remark made afterwards by Lord Lucas, 
 that in the time of the late usurping powers, though the taxes 
 were great, the means which people had of obtaining money 
 were great also. 
 
 But these modes of creating supplies could not last long ; 
 they would do for an emergency only, and the time would 
 inevitably come when such summary means of making a reve- 
 nue would as suddenly fail : this, however, was a state of things 
 for which Cromwell's death saved him the necessity of pro- 
 viding. In the meantime, the people had seen enough of the 
 system to make them wish for a change ; and a recurrence to 
 the laws for the protection of property was gladly hailed by 
 all parties. 
 
 CHARLES THE SECOND. 
 
 No sooner was the constitution re-established by the re- 
 storation of Charles, than scarcity of money became again the 
 bane both of the prince and of the great bulk of the people ; 
 and recourse was again had to various arbitrary and oppres- 
 sive enactments in hopes of a remedy. The exportation of 
 gold and silver was absolutely forbidden, until it was disco- 
 vered that this regulation was better calculated to check 
 their importation than to prevent their being sent out of the 
 country. So far did this zeal exceed the bounds of common 
 sense, that it was foolishly thought the making of gold and 
 silver wire and lace, and the gilding of carriages, &c., were 
 the cause of the scarcity, and therefore prohibitory laws 
 were enacted against the free exercise of those trades. But
 
 73 
 
 all these regulations were to no purpose. The disease was 
 not understood, and it is therefore no wonder that the remedy 
 was not efficient. Those who had the means of monopolizing 
 the precious metals felt it to be their interest to monopolize 
 them, and private traders could afford to give higher prices 
 for bullion in current light money, than his majesty's mint 
 could afford to give in new coined money ; so the mint was 
 badly supplied with the material, his majesty was ill supplied 
 with money, and the great bulk of the people who wanted 
 coin for the mere purposes of circulation, were crippled in all 
 their transactions, whilst in the coffers of the great capitalists 
 there was abundance. The pernicious political bearing of 
 such a state of things was well illustrated by Lord Bacon, 
 in that remark of his which forms the motto of our title- 
 page. 
 
 The scarcity of money still continuing, the government was 
 forced to adopt the old expedient of diminishing the specific 
 value of the pound sterling ; and here was at once a good profit 
 for the capitalists. The old unit (the coined weight of which 
 was six pennyweights, ten grains and three-quarters) which 
 King James had coined at the commencement of his reign to 
 represent the pound sterling, but which he after\vards ad- 
 vanced to 1/. 2s., was now ordered to represent II. 3s. 6d., and 
 the new unit or laurel (the coined weight of which was five 
 pennyweights, twenty grains and a half) was enhanced to 
 11. Is. 4d. In two or three years after this enhancement, the 
 guinea (so called from the gold of which it was first made 
 being brought from the coast of Guinea) weighing five penny- 
 weights, nine grains and a half, was coined for the purpose of 
 giving a new gold representation to the pound sterling. This 
 end, however, was not attained, for tn^ guinea, reduced as it 
 was in weight from the old 205. piece, was no sooner issued 
 than it bore to the current silver the relative value of 20s. 6d. 
 From that time the old unit of both sorts received the name 
 of broads oi" broad-pieces. This enhancement of the value of 
 gold being found inadequate to the proposed end, a law was
 
 74 
 
 shortly afterwards passed by which the state undertook to 
 defray the whole expense of the coinage, so that those who 
 brought bullion to the mint were to be entitled to receive it 
 back in current coin without any deduction whatever: a tax 
 was imposed upon wines, vinegar, cyder, and beer imported, 
 for the purpose of defraying the expense. 
 
 Had this regulation of the coinage been accompanied with 
 any measure that could have checked the material of money 
 from being monopolized, its effects would have been beneficial ; 
 but for want of such a principle of counteraction, its effect 
 was to bring the circulating medium of the kingdom more 
 than ever under the control of bullionists and merchants. 
 The following extract shews what was thought of it at the 
 time. 
 
 " Sir Dudley North was infinitely scandalized at the folly of 
 this law, which made bullion and coined money par, so that 
 any man might gain by melting ; as when the price of bullion 
 riseth, a crown shall melt into five shillings and sixpence ; 
 but on the other side, nothing could ever be lost by coining ; 
 for, upon a glut of bullion, he might get that way too, and 
 upon a scarcity melt again ; and no kind of advantage, by 
 increase of money, as was pretended, like to come out. 
 
 " The reasons why the scheme prevailed were, first, that the 
 crown got by the coinage duty ; next, that the goldsmiths, 
 who gained by the melting trade, were advancers to the trea- 
 sury, and favourites. 
 
 " The country gentlemen are commonly full of one profound 
 mistake, which is, that if a great deal of money be made, they 
 must of course have a share of it ; such being a supposed con- 
 sequence of what they call plenty of money. So little do men 
 follow the truth of things in their deliberations ; but shallow, 
 unthought prej udices carry them away by shoals. In short, 
 the bill passed, and the effects of it have been enough seen 
 and felt ; however the evil hath been since in some sort, but 
 not wholly, remedied." — Life of Sir Dudley North, p. 179.
 
 75 
 
 In the year following that in which the coinage was made 
 free from seignorage, goldsmiths and brokers found it profit- 
 able to buy up with gold the weighty silver pieces, such as 
 dollars and pieces of eight, which it is said they could buy 
 for 5s. 3^. a piece ; but instead of bringing them to the mint 
 to be coined, they sent them to France, to Ireland, and to 
 Scotland, where their relative value in payments to the cur- 
 rent but lighter silver in England was such as to yield a very 
 considerable profit. 
 
 In 1670 such continued to be the scarcity of money, that 
 when the subsidy bill for granting one-twentieth of all estates 
 was read a second time in the House of Lords, his Majesty 
 being present. Lord Lucas spoke to the following effect. He 
 began by stating that all those hopes had been disappointed, 
 under the impression of which his Majesty had been recalled 
 to the exercise of the regal power ; that the burthens of his 
 subjects, instead of being lightened, had been increased, 
 whilst their strength to support them had been diminished ; 
 that in the times of the late usurping powers, though the taxes 
 were great, yet there was plenty of money throughout the 
 nation to pay them with ; " but now," continued his lordship, 
 " there is nothing of this ; brick is required of us, and no straw 
 is allowed to make it with. For that our lands are thrown up, 
 and corn and cattle are of Uttle value, is notorious to all the 
 world. And it is as evident that there is a scarcity of money ; 
 for all the parliament money called Breeches, a fit stamp for 
 the coin of the Rump, has wholly vanished ; the king's procla- 
 mation and the Dutch have swept it all away ; and of his now 
 Majesty's coin there appears but very little ; so that, in effect, 
 we have none left for common use, but a little lean coined 
 money, of the late three former princes ; and what supply is 
 preparing for us, my lord ? I hear of none, unless it be of cop- 
 per farthings ; and this is the metal, according to the in- 
 scription upon them [the farthings], ' Quatuor maria vindico' 
 that is to vindicate the dominion of the four seas."
 
 76 
 
 Sir W. Petty, speaking of the extreme scarcity of money in 
 Ireland about this time, says, it would have been easier for the 
 Irish labourer to have contributed forty-nine days' labour for 
 the use of the state, if taken at seasonable times in the course 
 of the year, than to raise two shillings for his hearth tax at 
 one period, and just when the collector called for it. This 
 extremity of hardship appears to have been produced by the 
 narrow policy of the British government. The agricultural 
 interest in England suffering greatly from the scarcity of mo- 
 ney, was caiTied away with the impression that the introduc- 
 tion of Irish cattle into the English market was the cause of 
 the farmers' distress ; and parliament was accordingly in- 
 duced to prohibit the importation of Irish cattle into England, 
 though at the same time a considerable part of the army of 
 Ireland was subsisting in England, the expense of which was 
 to be paid for by Ireland. Under these circumstances, to 
 furnish the sums that were demanded, Ireland was obliged to 
 send her goods to distant parts of the world, to Barbadoes for 
 instance, where an exchange was made for sugars, and the 
 sugars being remitted to England, discharged the obligation ; 
 but at such great charges to Ireland, that whilst they had any 
 money left, the payment was of course made in money. 
 
 With these facts before him, it is surprizing that Sir W. 
 Petty should have maintained the following sentiments on 
 absenteeism without some further qualifications. They are of 
 such old standing, and yet so closely agree with those which 
 have recently excited a good deal of attention, that we are 
 tempted to transcribe them : 
 
 " Many think," says Sir W. P., " that Ireland is much 
 impoverished, or at least, the money thereof much exhausted, 
 by reason of absentees, who are such as having lands in Ire- 
 land, do live out of the kingdom ; and do therefore think it 
 just that such, according to former statutes, should lose their 
 said estates. 
 
 "Which opinion I oppose as both unjust, inconvenient, and
 
 77 
 
 frivolous. For, first, If a man carry money or other effects 
 out of England to purchase lands in Ireland, why should not 
 the rents, issues, and profits of the same return into England 
 with the same reason that the money of England was dimi- 
 nished to buy it. 
 
 " Secondly. Suppose one quarter of the land of Ireland did 
 belong to the inhabitants of England, and that the same lay 
 all in one place together, why may not the said quarter of the 
 whole land be cut off from the other three, and sent into Eng- 
 land, were it possible so to do ? And if so, why may not the 
 rents ofthesamebe actually sent, without prejudice to the 
 other three parts of the interessor thereof? 
 
 " Thirdly. If all men were bound to spend the proceed of 
 their lands upon the land itself, then, as all the proceed of 
 Ireland ought to be spent in Ireland, so the proceed of one 
 county in Ireland ought to be spent in the same, of one 
 barony in the same barony, and one parish and manor ; and 
 at length it would follow, that every eater ought to avoid 
 what he hath eaten upon the same turf where the same grew, 
 &c. &c." 
 
 The above reasoning would be perfectly fair if commerce 
 were perfectly free, and if some natural law were in existence 
 to prevent money from being monopolized by states or indi- 
 viduals, to the prejudice of other states and other individuals. 
 But whilst a nation is liable to fulfil its engagements, not in 
 produce, but in metallic money, and that money is liable to 
 be limited in amount, and checked in its free circulation, some- 
 times by natural causes, and at other times by the arbitrary 
 enactments of a neighbouring state, or by the secret monopoly 
 of some great capitalists, then the experience of Ireland shews 
 that it may, according to the facts already quoted on Sir W. 
 Petty's authority, be easier for an individual to contribute 
 forty-nine days' labour to the use of the state in the course of 
 the year, than to give the small sum of two shillings in 
 money. We have had experience of this in our own day.
 
 78 
 
 Towards the latter end of Charles the Second's reign, it 
 was proposed to coin farthings of tin. But the farmers of the 
 scheme would not undertake it without his Majesty agreed to 
 their supplying England, Ireland, and the Plantations. The 
 design was opposed by the officers of the mint as a gross 
 fraud ; and when it was represented to his majesty that he 
 must expect ultimately to receive his revenue of excise in 
 them, and the Duke of York his postage, the intention was 
 abandoned. 
 
 JAMES THE SECOND. 
 
 The ruinous course of an absolute money system which 
 brought every thing of value under the control of those who 
 could govern the precious metals, was now rapidly tending to 
 a crisis. Charles the Second died February 6, 1684 — 5, and 
 on December 23, 1688, James abdicated the throne, and 
 went to France. In March following he came into Ireland, 
 and immediately raised the current value of the guinea to 245. 
 and other coins in proportion. This expedient failing to sup- 
 ply him with a sufficiency of money, he coined brass and cop- 
 per sixpenny-pieces for the purpose, as was stated in the pro- 
 clamation, of remedying the scarcity of money in Ireland, of 
 better subsisting his army, and of enabling his subjects the 
 better to pay and discharge the taxes, excise, customs, rents, 
 and other debts and duties, which were, or should be here- 
 after payable to his majesty. He continued to debase the 
 money more and more, till at length a pound weight of mixed 
 metal, which cost him fourpence, was coined into money re- 
 presenting near 10/. sterling. The people were compelled, 
 under severe penalties, to take this base money in liquidation 
 of engagements entered into on the faith of receiving good 
 regular money. The soldiers were paid their wages in it, and
 
 79 
 
 tradesmen were obliged to receive it for goods and debts. The 
 governor of Dublin, the provost marshal and his deputies, 
 threatened to hang up all that refused it. 
 
 Though James had repeatedly pledged the royal authority 
 that the base money thus paid should be ultimately redeemed 
 by good coin, yet, as soon as the battle of the Boyne had taken 
 place, whereby he was finally dispossessed of his kingly title, 
 a proclamation was issued by William III., assigning to the 
 currency of his predecessor a value in payment upon a par, or 
 nearly so, with the market value of the metal of which it was 
 made, so that the large half-crown of King James was at once 
 reduced to one penny, and the large copper shilling to one 
 farthing. It is computed that 6 or 7000/. worth of metal had 
 been made to represent upwards of 2,000,000 of money, of 
 which only 22,000/. was found in the mint when Jaines fled 
 from Ireland: the loss, therefore, to those who had been com- 
 pelled to take this money must have been very considerable. 
 
 WILLIAM AND MARY. 
 
 The commencement of this reign was distinguished by an 
 extraordinary scarcity of money in England, and an inquiry 
 was instituted to ascertain the cause. In a petition to the 
 House of Commons, dated April 9, 1690, from the working 
 goldsmiths of London, it is stated that the Jews and mer- 
 chants were in the habit of giving for silver three halfpence 
 per oz. above the mint price ; and that the melting down of 
 plate and milled monies was so encouraged by this, that the 
 petitioners were deprived of the means of carrying on their 
 trade, and the mint stopped from coining ; and that since the 
 preceding October, 286,102 ounces of silver bullion, and 89,949 
 dollars had been entered at the Custom-house for exportation 
 by private persons. This statement was fully corroborated by
 
 80 
 
 the report of the committee of the House of Commons, on the 
 8th of the following month, which assigns as the reason for this 
 exportation, that the French king, finding money very scarce 
 in his dominions, had raised the value of silver in coin ten per 
 cent : that is, a person who owed money in France, or wanted 
 to purchase goods there, was from that time permitted to dis- 
 charge a debt of 1 10/. sterling, with such a given quantity of 
 standard silver as up to that time would only have been equi- 
 valent to 100/. sterling. But the like enhancement was not 
 made in the value of gold, and therefore it was in relation to 
 gold money, and to credit or existing money contracts in 
 France, that the silver money was thus enhanced ; in like man- 
 ner as thrice in the same century the same thing had been 
 done in England, only ithad been done here in favour of the 
 gold currency. 
 
 Notwithstanding this enhancement of the value of silver in 
 France, the old silver standard was continued in England ; 
 so in order to turn that newmea sure of France to a profita- 
 ble account, the dealers in money, especially the Jews, sent 
 the gold to England, where they could exchange it for crown 
 pieces and other silver money of full weight, and with this 
 silver they were enabled to take the full private benefit of the 
 French king's measure. The profit resulting from this course 
 of exchange was such, that in a very short time England was 
 drained of many hundred thousand ounces of her best silver 
 money. It is to be observed, however, that whilst English sil- 
 ver was current abroad only by weight, in England it was 
 current by tale, constituting a legal tender to an unlimited 
 extent. When it was afterwards limited, the law permitted 
 that to the amount of 25/., silver, however light, having the 
 appearance of being genuine, should be a legal tender. 
 The traffic in silver was therefore not limited to the exchange 
 of gold for it ; but a farther opening for private profit was 
 found in the exchange of light silver for heavy ; thus, if with 
 twenty-one light shillings the dealer could buy four crown
 
 81 
 
 pieces of full weight, for which he could in France obtain 
 value, at the rate of twenty-two shillings, according to weight' 
 whilst the person who took the twenty-one light shillings could 
 pay them in England by tale for one shilling more than the 
 four crown pieces were authorized to be paid for ; both these 
 parties, it is obvious, would gain profit by the transaction, 
 at the expense of the public at large. The better part of 
 the English silver currency being thus made to bear a premium 
 over the inferior part, and yet the inferior part constituting a 
 legal tender, the exchange betwixt light and heavy silver be- 
 came a profitable trade, and there resulted from it a greater 
 scarcity of silver currency in England than had previously 
 been felt in France. The better part of it being continually 
 carried off either for hoarding or for exportation, any thing, 
 at last, that bore a resemblance to the English silver currency 
 was tolerated in the circulation ; and so light and bad was it, that 
 there were half-crowns then current which were jocularly said 
 to be 7s. 6d. too light ; by which was meant, that one being 
 put into the scale, it required the addition of three others of 
 the same sort , to make up the weight which that one half- 
 crown ought by the standard to have been. Thus England 
 had a legal standard for silver, which required that 62 shil- 
 lings should weigh a pound troy, and yet an authorized cur- 
 rency, of which it might take 120 shillings or more to make a 
 pound troy. 
 
 England being then engaged in war, suffered very greatly 
 from this derangement of her currency. The money which 
 was collected in taxes by tale, and which, from the scarcity 
 of money thus artificially created, cost the people nearly as 
 much labour to get, as it had formerly done when the coin 
 was of proper weight, was obliged to be paid for the support 
 of our army abroad by weight. For though we might chuse 
 to call 20 light shillings a pound sterling at home, and oblige 
 ourselves by law to receive them as such from each other, and 
 in discharge of any debt from abroad, yet we could not per- 
 
 F
 
 82 
 
 suade the Dutch to submit to the like conditions : on the con- 
 trary, the pound sterling, which in the beginning of the war 
 was equivalent to 43 Dutch schellings, now became gradually 
 lowered (owing to the diminished quantity and character of 
 that money, by which in England the pound sterling was lia- 
 ble to be represented,) till a.t length it was only deemed equi- 
 valent abroad to 28 Dutch schellings. 
 
 With a view to force good silver money into circulation, 
 severe punishments were denounced against those who should 
 exchange a given quantity of the better sort for a larger quan- 
 tity of the inferior. But instead of this measure forcing the 
 better part of the silver into circulation, the immediate effect 
 of it was to cause the barter in money which heretofore liad 
 gone on directly betwixt perfect and imperfect silver, to be 
 thenceforward carried on indirectly through the medium of 
 gold. For now those who possessed heavy silver, even if it 
 were of full weight, could only pass it legally in England for 
 20 shillings to the pound sterling ; whereas, with 22 shillings 
 of silver full weight, they could and might legally purchase a 
 guinea, and for this guinea they could readily obtain 29 or 30 
 shillings of the current light silver, and 20 shillings of this 
 light silver, as before observed, was a legal tender for a pound 
 sterling, in any payment under the amount of 25/. ; so that 
 (according to Burnet) from the time that the direct exchange 
 of perfect for imperfect silver was prohibited by law, the 
 guinea was deemed equivalent to 30 shillings. 
 
 Mr. Ruding, in speaking of this period, in the Annals of the 
 Coinage, says : 
 
 " For a long time, both the government and the people had 
 beheld their specie, as it were, melting away before their eyes, 
 and almost every man was become, in some way or other, a 
 robber of the public ; for he who neither debased nor dimi- 
 nished it, yet either hoarded or sold what fell into his hands 
 undebased or undiminished." And quoting Ralph's History 
 of England, he adds, " The opposition writers of the time 
 
 I
 
 83 
 
 asserted that the remittances for the charge of the war every 
 year, carried out of the kingdom from a million and a half to 
 two millions of money, either in specie or bullion, which was 
 the same thing ; that all this wealth not only centered in Hol- 
 land, but was negociated there a thousand ways to our preju- 
 dice ; that as our coin degenerated from bad to worse, they 
 either refused to take it at all, or took it by weight, which gene- 
 rally reduced the value to half its denomination ; that the 
 heavy Joart of it they first clipped as close as possible, and 
 then remitted it hither again, where it was current by tale ; 
 that the light they melted down, and debased into their own 
 schellings, which became the currency of the army, and by 
 which they had all the profits of the coinage, &c. ; that they 
 prevented the Bank of England from erecting a mint in Flan- 
 ders, &c. ; that a great part of our base coin was minted in 
 Holland, and from thence obtruded upon us ; that after hav- 
 ing beat down the value of our guineas abroad to nineteen 
 shillings sterling, [this of course means in relation to shillings 
 as they ought to be], they remitted them to England, where 
 they were current for thirty shillings, [that is, such shillings 
 as thei/ were] ; that all foreign gold, rising in value in exact 
 proportion to this rise upon guineas, they took the advan- 
 tage to buy up our grain and manufactures with it, and 
 thereby enabled themselves, at our loss, to forestall and under- 
 sell us in all the markets of Europe." All this was not the 
 mere exaggerated statement of the opposite party, as is shewn 
 by Mr. Ruding, who represents the Chancellor of the Exche- 
 quer and his party as alleging officially the like truths, viz. 
 
 " That by reason of the ill state of the coin, the exchange 
 abroad was infinitely to the nation's prejudice. 
 
 *' That the supplies that were raised to maintain the army, 
 would never attain their end, being so much diminished and 
 devoured by the unequal exchange and exorbitant premiums, 
 before they reached the camp. 
 
 f2
 
 84 
 
 " That this was the unhappy cause that the guineas ad- 
 vanced to thirty shillings, and foreign gold in proportion. 
 
 " That therefore to the nation's great loss, not only the 
 Dutch, but indeed all Europe, sent that commodity to this 
 market, and would continue to do so, till the nation should be 
 impoverished and undone by plenty of gold. 
 
 " That we must exchange for their gold our goods, or our 
 labour, till at last we should have only guineas to trade withal ; 
 which nobody could think our neighbours would be so kind as 
 to receive back at the value they were here. 
 
 " That therefore the disease would every day take deeper 
 root, infect the very vitals of the nation, and if not remedied, 
 would soon become incurable." 
 
 These, be it observed, are the declarations of the ministerial 
 party at that time. After this description of the disease which 
 afflicted England, let us advert to the remedies which were 
 suggested for its cure. 
 
 All seemed to agree that a recoinage of the silver was ne- 
 cessary ; the question was, how and upon what terms it was 
 to be made. 
 
 The Chancellor of the Exchequer and his party contended 
 that a recoinage of the silver currency ought to be effected 
 agreeably to the old standard, viz. 5s. 2d. per ounce. 
 
 The party in opposition maintained that the recoinage ought 
 to be made at the rate of Qs. 3<f . per ounce, alleging that to be 
 the market price. 
 
 It was maintained by the ministerial party, that the market 
 value of bullion was merely in relation to diminished money ; 
 that it was matter of fact, that with 5s. 2d. of new milled 
 money an ounce of bullion might be bought, whilst those 
 who bought it with clipped pieces paid 6s. 3d. The inference 
 intended to be drawn from this argument was, that 5s. 2d. per 
 ounce was actually the market price. But this argument, it 
 is obvious, was calculated to get rid of the question rather than 
 to settle it. For the question was not merely whether 5s. 2d.
 
 85 
 
 of new-milled money, which by law was to weigh an ounce, 
 would buy another ounce of uncoined silver ; this was merely 
 reducing the question to the dogma of Mr. Locke, on which 
 the reasoning was founded, namely, that an equal quantity of 
 silver is always of equal value to an equal quantity of silver ; 
 but how was new-milled money at 5s. 2d. per ounce to be ob- 
 tained in quantities sufficient for the necessities of the people 
 of England, when 22s. of such silver money would exchange 
 abroad for a guinea, and a guinea would buy 29 or 30 light 
 shillings, 20 of which shilUngs were allowed by law to dis- 
 charge a debt of one pound sterling. It is plain that the 
 tendency of this must be to drain England of her silver, and 
 that to regain possession of it she must purchase it with 
 gold, at a price considerably higher than she professed to 
 issue it. 
 
 Notwithstanding the powerful opposition which the minis- 
 terial party met with, the Chancellor of the Exchequer ulti- 
 mately succeeded in carrying his plan into effect for a re- 
 coinage of silver money at the old standard of 5s. 2d. per 
 ounce. 
 
 As might be expected, a law, enacted shortly afterwards, 
 authorized the receivers and collectors of the taxes and reve- 
 nues to take silver at the rate of 5s. 8c?. per ounce, or, in other 
 words, to allow a premium of Qd. per ounce, over and above 
 the mint price upon all uncoined silver brought in. Thus all 
 the money which the government borrowed at this time, and 
 all the money received in taxes, was authorized by law to be 
 paid to the government at the rate of 10 per cent, higher than 
 that price at which the government was pledged by law to 
 pay it away again ; and to provide for this losing game, the 
 government was obliged to keep borrowing money on Exche- 
 quer bills, at the rate of 11. 12s. per cent., to the great profit 
 of all money lenders, and to the great loss of all the rest of 
 the nation. 
 
 Had the proposition of the opposite party been complied
 
 86 
 
 with, the above consequences might for a time have been 
 averted; and as far as the question was discussed, the right 
 was with those who proposed to enhance the value of the 
 silver currency of England to 6s. 3d. per ounce ; but this con- 
 clusion arises solely from the argument not having been car- 
 ried far enough. For let it be admitted, that the 10 per cent, 
 enhancement of the value of silver in France had occasioned 
 plenty there and scarcity in England ; and that a 20 per cent. 
 enhancement of the value of silver in England would for a 
 time have caused plenty in England, and a consequent scar- 
 city in France ; yet the whole history of money shews that a 
 farther enhancement on the part of France would have called 
 for a repetition of the like operation on the part of England, 
 till the intrinsic worth of the metal currency of both countries 
 would have been almost annihilated. 
 
 Such, however, were the remedies first proposed for extrica- 
 ting England out of her pecuniary difficulties. Enough has 
 been said to shew, that neither of them alone could ever have 
 succeeded. 
 
 Before we proceed to notice that remedy which did prove 
 efficient, it may be useful to observe, that the evil which 
 afflicted the nation, and for which a cure was sought, arose 
 not from a natural, but an artificial scarcity of silver. There 
 was probably as much silver then in existence as there had 
 ever been at any previous period ; but from an unequal distri- 
 bution of it subsisting betwixt two rival kingdoms, the means 
 one of them took, as she thought, to rectify her want, proved 
 presently the means of occasioning the like calamity to exist 
 in the other. In the end this brought on distress of a 
 similar kind betwixt individuals of the same kingdom, where- 
 by the self-interest of every man was called up in opposition 
 to the general interest of the whole, until in fact the scarcity 
 of money thus artificially created, had rendered the monopoly 
 of the material of money, viz. gold and silver bullion, a sure 
 and an increasing source of profit to those who could take
 
 87 
 
 advantage of it, and as sure a source of increasing misery to 
 the nation at large. 
 
 Whilst the artificial deficiency of the material of money 
 lasted, which would be as long as it was the interest of those 
 to make it scarce who held the stock in reserve, it is manifest, 
 that to look for a cure of the evil in the mere recoinage of the 
 money, whether by the scale proposed by the ministers, or by 
 that of the opposition, would be as vain and foolish as to expect 
 in'a time of famine, that a deficiency of corn would be remedied 
 by a new method of measuring it. If the scarcity in either case 
 arose from its being the interest of certain parties to withhold 
 from the market a supply adequate to the demand, the cure 
 must be looked for in some measure which should have the 
 effect of making it the interest of the withholding parties to 
 cease from their pernicious policy. In the progress of this 
 money famine, a measure was fortunately hit upon, which had 
 the effect of making the money hoarders disgorge their trea- 
 sure. 
 
 In the session of Parliament, 1694-5, an act passed the 
 legislature totally to suspend for a time the coinage of guineas ; 
 and the importation of guineas, half-guineas, &c. was also 
 absolutely prohibited. 
 
 These measures, in conjunction with the establishment of 
 the Bank of England, which had been founded a short time 
 before, struck at the root of the monopoly of the precious 
 metals. For it follows, that when men were deprived by 
 law of the possibility of obtaining gold, no man could be 
 compelled by law to make payment in gold ; and thus bank- 
 notes, bills of exchange, and silver, (which latter was so im- 
 perfect as to cause the credit money generally to be preferred), 
 would constitute the only currency. The necessity of obtain- 
 ing gold for payments being thus altogether suspended, the 
 holders of it soon found that article to be a dead stock on their 
 hands, and instead of the people having to tempt the holders 
 of gold to part with it, the gold hoarders had now to tempt
 
 88 
 
 others to take it from them. The good effect of this was ma- 
 nifest: the value of gold declined rapidly. On the 15th Fe- 
 bruary following, parliament was in a condition to pass a 
 resolution, that no guineas should be received in payment at a 
 higher rate than 28s. On the 28th of that month, they were 
 reduced to 265. This falling market presently made gold so 
 plentiful, that there then appeared as great a rage to get rid of 
 it as a year before there had been to hoard it. On the 26th of 
 the following month (March), guineas were reduced by law to 
 26s., with the proviso that no person should be compelled to 
 take them at that price, and in two or three weeks after- 
 wards they were brought down to 22s. 
 
 Mr. Leake, remarking upon the difficulties of this period, 
 in his Historical Account of English Money, says : " In the 
 mean time a paper prop supported the state, whilst its silver 
 pillars were removed, which laid the foundation of our paper 
 credit. But there was gold too much, necessity giving a 
 currency to guineas, till silver was supplied, and as soon as 
 this was done, in some measure, guineas were lowered to 
 ]/. 5s. after the 25th of March, 1696, and half-guineas, 
 double-guineas, and five-pound pieces in proportion, under a 
 penalty ; but not compelling any one to receive them at that 
 price. An act was likewise passed for taking off the obliga- 
 tion for coining guineas, from the 2nd of March, 1695, till 
 the 1st of January following, during which time no guineas 
 were to be coined at the Mint, and they were also forbid to 
 be imported. The 10th of April 1696, they were brought 
 down to 1/. 2s., and being now reduced so near the standard 
 and the nation better stocked with the new silver money, 
 guineas were again coined, and it was made lawful to import 
 the same." P. 393. 
 
 Many a wise legislative measure has been brought into ex- 
 istence by mere necessity, without the parties adopting it 
 being aware of its consequences. And judging from the ac- 
 count which Mr. Leake has given of the period in question.
 
 89 
 
 it would seem that the power of the measure which at that 
 time had the effect of checking the monopoly of gold was 
 not understood. 
 
 Mr. Leake began to publish his opinions upon these matters 
 about thirty years after the above-mentioned occurrences, a 
 time near enough, and not too near, to admit of his gathering the 
 consolidated judgment of the statesmen of the time, divested 
 of party views ; and the above extract is from an enlarged 
 edition of his work published twenty years subsequently^ 
 The incidental manner in which he notices the suspension of 
 the gold coinage, and the prohibited importation of guineas — 
 the unquahtied assertion that there was too much gold in the 
 country, when it was notorious that the guinea was worth 
 II. 10s. sterling, while the circulation of it, as money, was 
 virtually superseded by the paper prop, as he calls it, and by 
 the prohibition given to the coining or importing of guineas, — 
 the attributing their reduction to the mere increase in the 
 quantity of silver, which, to have produced the effect attri- 
 buted to it, must, from the 25th of March to the 10th of April, 
 have been immense indeed ; whereas Mr. Leake afterwards 
 records that such continued to be the scarcity of silver, that 
 till the 1st of July 1697, government was obliged to allow 
 for it, in payment of the revenue, a premium of sixpence 
 per ounce over and above the Mint value, and also to allow 
 11. I2s. per cent, per annum interest for such money as was 
 lent them on exchequer bills — and finally, the immediate adop- 
 tion of the old system by government, without any qualifica- 
 tion, as soon as guineas got down to 1/. 2s. each, although, as 
 before stated, the government was still obliged to give a pre- 
 mium of ten per cent, upon silver — these conflicting views, 
 promulgated by a writer under the circumstances of Mr. 
 Leake, show that the nature of the disease which afflicted the 
 country was never clearly understood by him, probably not by 
 the government ; and that the measure which struck at the root
 
 90 
 
 of the evil was rather the result of accident and sheer ne- 
 cessity than of legislative foresight. 
 
 QUEEN ANNE TO GEORGE THE FOURTH IN- 
 CLUSIVE. 
 
 By the establishment of the Bank of England an impor- 
 tant change was effected in the money system of England. 
 The frequent returns of war throughout the eighteenth cen- 
 tury, furnished occasion for parliament to make frequent and al 
 large concessions of taxes. These being granted, exche- 
 quer bills and bank notes provided a credit currency, through 
 which the taxes were paid agreeably to the representation in 
 p. 9. The funding system gave perpetuity to this credit cur- 
 rency, the extent of which must otherwise have been limited 
 to the amount of taxes immediately forthcoming. 
 
 At first the credit currency was in great disrepute ; but as 
 bank notes were received by government in discharge of all 
 taxes, customs, &,c, and also in payment of government loans, 
 the same as specie, they were soon felt to be as efficient for 
 the mere purposes of home circulation as the best metallic 
 money. The immediate effect of this was to diminish the ab* 
 solute necessity for gold, and in consequence to diminish the 
 the value of it, in like manner as a suddenly increased supply 
 of gold from the mines would have done. A further con- 
 sequence ensued from this credit currency : it altered the rela- 
 tion which had previously subsisted between gold and silver. 
 From a report presented to the House of Commons, by Mr. 
 Locke and some other gentlemen of celebrity, on the 22nd of 
 September 1698, it appears that gold in relation to silver was 
 not so high on the continent as in England, and it was re- 
 commended that the guinea, which was then counted for 
 1/. 2s. in England, should thenceforth be current only for
 
 91 
 
 1/. ]s. 6d. J whereupon the parliament came to the resolution 
 "that under the act 7 &8 William 3. cap. 19. no person is 
 obliged to take guineas at 1/. 2s. a piece," and the price im- 
 mediately fell to 1/. Is. 6d., at which rate they were received 
 by the officers of the revenue. 
 
 In the early part of 1698, bank notes for a short time were 
 estimated lower than specie by about twenty per cent. ; 
 but in the latter part of the same year it appears they had 
 so superseded the necessity for gold, that government was 
 enabled to reduce the difference between gold and bank notes 
 about 2| per cent. It is true that the regulation, which 
 effected this change, was professedly designed to adjust 
 the value of gold and silver to each other ; but whatever was 
 its ostensible design, its effect was to lower gold in relation to 
 the bank note, and to cause both gold and silver thence- 
 forth to be valued by their relation to the pound sterling in 
 credit currency. 
 
 It being an essential part of this new system that govern- 
 ment should receive the bank note in payment of revenue 
 uniformly as the pound sterling — whilst gold and silver were 
 still subjected to the fluctuations arising from a natural or ar- 
 tificial contraction of the coin of England, and to the conse- 
 quent variation in its relative value to the monies of foreign na- 
 tions — the bank note now virtually became the acknowledged 
 and only unchangeable representative of the pound sterling 
 in English money. 
 
 A distinguishing characteristic of this new money system 
 was, that it contained within itself the principle by which the 
 circulating medium might be extended, without being any- 
 ways dependent upon the produce of the mines. In former 
 times, when the state borrowed money, it was borrowed in 
 gold and silver, and to pay it back again with interest of 
 course required not only the same amount of gold and silver 
 which had been borrowed, but an additional amount propor- 
 tionate to the interest; and if the state had not the means of
 
 92 
 
 making the mines produce supplies equal to that additional 
 amount, then it could not possibly repay the principal and 
 interest of the debt. If the money were borrowed at an in- 
 terest of eight or ten per cent, per annum, which rates were 
 often exceeded, it could not pay even the interest alone for 
 more than ten or twelve years, however honestly disposed the 
 monarch might be. But now that the currency was made to 
 derive its value, in the first instance, from the power which the 
 state had to enforce the payment of taxes, and, in the second 
 instance from the credit of a company of bankers and mer- 
 chants, whose interest it was generally to act in concert with 
 the state, and who gave their promise to pay the state, in 
 exchange for its promise to refund when the taxes were paid ; 
 it only required that a fair understanding should be kept up 
 between the government and the bankers, and that exchequer 
 bills should be converted into government annuities, in order 
 to provide for an almost unlimited extension of the system. 
 
 But as under this new system the bank was liable to sus- 
 tain loss whenever the rate of exchange was such as to favour 
 the exportation of the precious metals, so it became the policy 
 of the government to aid the bank in guarding against such a 
 contingency. This might be, and was, effected by gold being 
 made to bear a higher relative value to silver in England 
 than it possessed abroad, so that if specie were demanded of 
 the bank, the directors having the option of paying in gold or 
 silver, would of course make tender of the gold, which be- 
 ing of higher relative value to silver in England than abroad, 
 could not be exported but with some degree of loss, and there- 
 fore would only be exported in cases of absolute necessity. 
 By this means the bank note continued to hold a control over 
 the gold. Hence, however, arose a gradually increasing diffi- 
 culty. In consequence of gold being systematically made to 
 bear a higher relative value to silver in England than abroad, 
 profit was to be had by bringing the gold money of France 
 and Spain to England, and taking tlje new and good silver
 
 93 
 
 money of England back in lieu of it, and of course dealers 
 were soon found to take advantage of the profit thus to be got 
 between the home and the foreign market. The new silver 
 coinage was in fact hardly completed before they began to 
 drive a large trade in this way, which led, as we have already 
 seen, to the reduction of the guinea from 1/. 2s. to 1/. Is. 6d., 
 in the latter end of 1698. But notwithstanding this reduc- 
 tion in the English value of the guinea, in two years afterwards 
 (that is, in 1700), Burnet says, the packet boat from France 
 seldom came over with less than 10,000 louis d'ors in it ; and 
 at last such vast quantities of foreign gold were in the nation, 
 that it was ordered by parliament that the louis d'or and 
 Spanish pistole should not pay for more than 17s., which or- 
 dinance caused between one and two millions to be brought 
 to the mint to be coined into guineas. 
 
 This abundance of foreign gold in England was, at 
 the time, foolishly supposed to proceed fi'om French bribery, 
 not only by the populace, but by some in higher stations ; 
 others considered it caused by the balance of foreign trade 
 being so much in favour of England ; but that it was properly 
 attributable to the cause here assigned (viz. the exchange of 
 new silver for it) needs no other proof than that so early as 
 1708, (only nine years after the completion of the new silver 
 coinage), silver money had become so scarce in England, that 
 it again became necessary to offer a premium for every ounce 
 of foreign silver that should be brought into the English 
 mint, and this notwithstanding there had, in the mean time, 
 been some valuable captures of Spanish silver, from which 
 was made the beautiful coinage of Queen Anne. 
 
 By means of this new mode of creating a circulating me- 
 dium in England, money (or that which had all the proper- 
 ties of money) became so plentiful that, in 1713, govern- 
 ment was enabled to borrow at a much reduced rate of 
 interest, and to limit the legal rate of interest to five per 
 cent, per annum y whereas fifteen years before, it will be re-
 
 94 
 
 collected, that loans could not be had, even on exchequer 
 bills, for less than 11. 12. per cent. But though bank notes 
 and gold were comparatively plentiful in England, silver 
 money continued to grow scarcer. With a view to the re- 
 medying of this, the guinea was again reduced, in 1717, from 
 1/. Is. Qd. to 1/. \s. A writer, however, observes that even 
 after this regulation the value of gold to silver was as one to 
 fifteen and a fraction in England, whilst in France and Hol- 
 land it was only 14 J, and therefore it carmot be matter of sur- 
 prise that the silver currency of England continued to de- 
 crease. It did so decrease, until at last people, from necessity, 
 were glad to take inferior silver in small change, and this, by 
 degrees, occasioned the current standard for silver money to be 
 considerably below the legal standard ; so that when current 
 silver was put to the test, in the early part of George the 
 Second's reign, it was found that the shilling averaged a defi- 
 ciency of from six to eleven per cent,, and the sixpences from 
 eleven to twenty-two per cent. When necessity had ha- 
 bituated the people to the currency of this diminished silver, 
 it then became profitable to buy with it the best of the 
 English guineas, and so a scarcity of good guineas being 
 created, the lighter, by degrees, obtained acceptance among 
 the people ; and soon so large a proportion of light guineas 
 was in circulation as to cause considerable clamour in the na- 
 tion, to allay which, in 1738, government was in great ac- 
 tivity to discover the parties who, by filing and otherwise, 
 had diminished the guineas. 
 
 Under these circumstances, had the bank been compelled 
 to pay its notes, or the government to make good its en- 
 gagements, in coin of full weight, at one time the silver, 
 and at another time the gold, would have been such pro- 
 fitable articles of export, as to have left both the govern- 
 ment and the bank destitute of resources. But the directors 
 having the option to pay in current gold or silver, had only 
 occasion to keep on hand a sufficient stock of legal but light
 
 95 
 
 gold and silver, and they could, by tendering that which at 
 the time was unprofitable for export, secure themselves. By 
 this means it was possible, wdth an actual scarcity of both 
 gold and silver of full weight, to keep the value of the me- 
 tallic currency sufiiciently below par, in relation to bank 
 notes, as to preserve the bank from a run upon it. 
 
 Such was the system from which England derived its circu- 
 lating medium for the first half of the eighteenth century. 
 But the diminishing of the specific weight of the metallic 
 money continuing to be progressive, the bank and the go- 
 vernment at length found that if a stop were not put to it, 
 the interest money of the one, and the revenue of the other 
 would ultimately be seriously diminished. For however con- 
 venient it might be during this time for the bank to have the 
 power of tendering legal but light money to those who de- 
 manded specie for notes, it is quite a mistaken notion to sup- 
 pose that it can be at any time beneficial to that establish- 
 ment to suffer the value of money to be decreased. The 
 bank to employ its capital, must always have a much larger 
 amount of engagements on credit due to it than from it ; 
 therefore the operation of any course of things, which goes to 
 diminish the intrinsic worth, or the foreign value of the pound 
 sterling, is a positive loss to the bank proprietors of so much 
 upon the net balance of their engagements, whilst the opera- 
 tion of any alteration in the money system which increases 
 the intrinsic value of the pound sterling, is in like degree a 
 decided gain to them. For want of a right understanding on 
 this point, the bank has been continually suspected of a de- 
 sire to diminish the value of English money, not merely by 
 common people, but by those who have had considerable know- 
 ledge in these matters imputed to them. Rightly understood, 
 however, it is (as here stated) the interest of the bank to 
 keep up the intrinsic value of money as much as possible. 
 Agreeably to this, after the peace of Aix-la-Chapelle, measures 
 were taken to prevent the further diminution of the coin;
 
 96 
 
 and in 1750, it was publicly notified by the bank and excise, 
 that they would not take any guineas that wanted six grains 
 of their legal weight. 
 
 From this notice it is fair to infer that many of a lighter 
 weight had found a ready circulation, and that now, if they 
 were only five grains deficient, instead of six, they would be 
 received by the bank and the excise at the same value as if 
 they were full weight. Those persons, therefore, whose trade 
 it was to make profit by diminishing metallic money to the 
 lowest circulation standard, of course after this took care to 
 extract from every guinea which came into their possession, 
 whatever it possessed above the weight at which the bank 
 and excise would take it. This notification gave a sort of 
 legal sanction to a current gold coin considerably below the 
 Mint standard, and rendered it impossible to obtain any new 
 coinage of guineas. 
 
 Notwithstanding the objections to which this measure of 
 the bank and excise was liable, it appears to have been the 
 only step which could be taken in the first instance, to effect 
 a restoration of the money. To preserve the credit of govern- 
 ment, the measure was announced on the mere authority of 
 the bank and the officers of the excise : it was even disclaim- 
 ed by the government. Had the peace of Europe been then 
 placed on any thing like a permanent footing, it is probable 
 that this measure would have been followed up with others, in 
 the same manner as it was twenty years afterwards, until gold 
 had been restored to something near the legal standard ; but 
 the war that after this for some time threatened England, and 
 which at length broke out in 1756, demanded such an in- 
 crease of credit currency as could not fail to prevent any 
 further steps being taken towards the restoration of gold 
 coin. In the mean time silver money being left without re- 
 striction in its tendency to become diminished in weight, 
 naturally grew worse and worse, until payments in guineas 
 of considerably lighter weight than that fixed by the bank i
 
 97 
 
 and excise in 1750, were infinitely preferable to payments in sil- 
 ver, and before the war ceased, gold, silver, and copper 
 monies are described as beino- in a more wretched condition than 
 had ever been known in the recollection of that generation. 
 
 The war terminated in 1763, after having increased the 
 national debt, in the seven years of its continuance, from 7'3 
 millions to 133 millions. With peace^ the outcry became great 
 for an improvement of the money. Its worthlessness was ob- 
 vious to all, but the cost which would attend its improvement 
 was little suspected ; and still less known to the public were 
 the preliminary measures which were necessary to be adopted 
 by the bank and the government before the restoration could 
 be undertaken. 
 
 But popular as the project was with the bulk of the people, 
 who seldom look beyond the first step in an argument ; and pro- 
 fitable as it was calculated to be to the bank, to the officers 
 of state, and to all people in the receipt of fixed salaries or 
 annuities ; it was not till 1773 that decided measures were 
 taken for its accomplishment. The government having 
 then liquidated all its pressing engagements, and having 
 moreover redeemed about ten millions of the national debt, 
 had no immediate need to avail itself of the credit of the bank ; 
 and the bank, thus relieved from the calls of the government, 
 having the power to restrain its issues, in consequence of 
 which restraint the value of its notes in relation to gold 
 would be enhanced; the longwished-for object of restoring 
 gold money to its standard weight was at length resolved to 
 be carried into effect. Meanwhile, the commercial and manu- 
 facturing parts of the nation were involved in great distress, 
 and private credit is described as having been brought to a 
 very low ebb. Availing ourselves of the experience we have 
 since had, it is obvious to us that these were the natural conse- 
 quences of a contraction of the currency ; but at that time 
 the people knew not how it was that ruin to a great extent 
 was brought upon them.
 
 98 
 
 The bank being now in a state of preparation for restoring 
 the gold currency, the commissioners of the treasury issued 
 an order, dated the 23rd of July 1773, limiting the weight at 
 which guineas should be allowed to circulate, or be received 
 in payment of taxes, &c. to the following scale : 
 
 dwts. grs. 
 
 Guineas coined prior to the reign of George III. 5 3 
 
 Ditto, ditto in the reign of George III., but be- 
 fore the 1st of January, 1772, - - - - 5 6 
 
 Ditto, ditto, on and subsequent to 1st Jan. 1772, 5 8 
 and smaller gold in proportion. 
 
 About a week afterwards the bank gave notice, at the re- 
 quest of the lords of the Treasury, that guineas under the 
 above weights, in parcels not less than fifty guineas, would be 
 taken in there on certain days, at the rate of 3/. 175. lO^rf. 
 per oz. until further notice. 
 
 The above order, by creating an apprehension that the 
 gold money, even according to the above scale, was about to 
 be prohibited, was well calculated to bring it into the hands 
 of the bank, and thus to provide government with the mate- 
 rial for the new coinage. 
 
 It was arranged further that the bank should take in all 
 guineas agreeing with the ordinance of the 23rd of July 1773, 
 and exchange them for the new coinage ; the loss on the ex- 
 change to be defrayed out of the national revenue. Under 
 these provisions the new coinage was carried into effect, and 
 on the 24th of June 1774 such progress had been made that 
 it was then ordered, by the king's proclamation, that the scale 
 by which the circulation of guineas, half-guineas, &c. had 
 been regulated on the 23rd of July 1773, should only continue 
 in force until the 15th of July 1774; and that after the 15th 
 of July 1774 the circulation of guineas should be restricted 
 to the following scale : 
 
 dwts. grs. 
 
 Guineas bearing date prior to 1st Jan. 1772, -56 
 Ditto dated subsequently to 31st Dec. 1771. - 5 8
 
 99 
 
 All guineas of less weight then 5 dwts. 6 grs. were not 
 to be allowed to pass in any payment except to the exche- 
 quer, to collectors of the revenue, or to the bank of En- 
 gland. The tellers of the Exchequer, the receivers of taxes, 
 and the bank of England, were required to receive guineas, 
 half-guineas, &c. according to the order of July 1773 until the 
 31st of August; twenty-one days more were allowed for re- 
 ceivers and collectors of taxes in England, and twenty-eight 
 for those in Scotland, to pay their collections into the exche- 
 quer, and after that the circulation of gold money was to be 
 entirely restricted to the rates prescribed in the notice of the 
 24th of June 1774. It was further notified that it was the 
 intention of government to restrict the circulation of gold 
 money to 5 dwts. 8 grs. to the guinea, as soon as it could be 
 done. 
 
 This measure for the restriction of the gold currency had 
 scarcely begun to be acted upon, before the silver currency 
 was affected by it. On the issue of new coined guineas of 
 full weight, a profit was to be had by the importation of the 
 old silver coins of the realm, (which were now for the most 
 part very greatly under the legal weight,) and the exporta- 
 tion of the new guineas in lieu thereof; and in consequence, 
 during the first year of the issue of the new guineas, so great 
 a quantity of old light silver found its way into the country^ 
 that laws were made for the seizure, if possible, of the silver so 
 imported. It was also then enacted, that silver should not 
 be a legal tender beyond the amount of 25/. in one payment, 
 except by weight at 55. 2d. per oz. The act which thus li- 
 miited the legal tender of silver was only to be in force for 
 two years at the first; but it was found convenient tore-enact 
 it from time to time. At that period, however, the dropping 
 of it altogether, when necessity no longer required it, was 
 probably in contemplation. 
 
 The re-coinage of the gold was at length completed, but it 
 cost the nation so much to effect it, that government did not at- 
 
 G 2
 
 100 
 
 tempt the re-coinage of the silver. At tlie outset it was esti- 
 mated that 250,000/. would cover the expense of restoring the 
 gold currency to its proper weight ; but the direct loss, paid 
 for to the bank, was upwards of 500,000/. and the indirect loss 
 must have been very considerable. The nation was congratu- 
 lated upon the little inconvenience it experienced by this re- 
 coinage, but those who so congratulated it did not take into 
 their account the quantity of suffering which was inflicted 
 upon the commercial and manufacturing part of the com- 
 munity, whilst the bank and the government were making 
 their preparations for the re-coinage ; and when it was com- 
 pleted, the effect was greatly to enhance all existing money 
 engagements, to the ruin of many who had mortgages or 
 debts to discharge, without at all securing the community 
 from a recurrence of similar depreciations of the coin, of which, 
 in a few years after this re-coinage of the gold, strong symp- 
 toms began again to manifest themselves. 
 
 We have before observed that the silver currency of Eng- 
 land had become so diminished, either by wear or artifice, 
 whilst performing the purposes of money in foreign countries, 
 that a severe penalty was enacted against its re-importation, 
 and that as a further guard against too great an amount in 
 circulation, it was restricted as a legal tender to sums not ex- 
 ceeding 25/. at one time, except by weight. Our silver cur- 
 rency being in this state, it might have been thought that the 
 nation was tolerably secure from any injury arising from the 
 exportation of it; but events proved otherwise. For the French 
 having adopted a paper currency, under the name of as- 
 signats, it became their policy with these assignats to possess 
 themselves as much as possible of our silver money, light as 
 it was; and it is stated that in the course of the year 1792 
 they succeeded in abstracting from England nearly three mil- 
 lions of ounces of our best silver, in exchange for this their 
 paper money. 
 
 These assignats, as a paper and not a credit currency, were
 
 101 
 
 distinguishable from our bank notes in this respect. The secu- 
 rity of Enghsh bank notes rested primarily upon the credit of 
 a company of wealthy merchants and bankers ; and, secondly, 
 upon the government being pledged to receive them in 
 payment of taxes, customs, &,c.: whereas the security of 
 French assignats rested simply upon the government being- 
 pledged to take them for taxes, &c. If, therefore, the party 
 holding them had no taxes to pay, he was compelled to seek 
 out for some one who had ; and if the amount in circulation 
 exceeded the amount of taxes immediately payable, then, 
 of course, the assignats would be at a discount, for there was 
 no intermediate party pledged to the payment of them on 
 demand. But the holder of a bank note, if he did not want 
 to pay it in taxes, had a right to demand gold or silver for it 
 from the bank of England ; this, at least, was the case until 
 the passing of the bank restriction act, and even after that 
 the party holding a bank note had cause to believe that the 
 bank proprietors, for their own profit and security, would 
 take care to make such engagements with the government as 
 should secure the re-payment of the money at some time or 
 other. Thus, in the case of the assignats, there was only one 
 security, and that the security of a party upon whom there 
 was no distraining; in that of bank notes there were two secu- 
 rities, one of which (until the passing of the bank restriction 
 act) was liable to be distrained upon. Although, therefore, 
 it was not profitable to bring gold to England, to buy up our 
 diminished silver, it was profitable to bring assignats for 
 that purpose ; and, as already observed, nearly three mil- 
 lions of ounces of the best of our silver were taken into France 
 by their instrumentality in the year 1 792. 
 
 The abstraction of so much of our silver money was calcu- 
 lated to lead to similar consequences to those which had been 
 experienced a century before from the like cause. The ab- 
 sence of the better silver opened a way for the ready circula- 
 tion of that of inferior weight, and the facilities for circulating
 
 102 
 
 this prepared for a further abstraction of the better part, either 
 to be hoarded, or exported, or deteriorated. The bad har^ 
 vest of 1795 added considerably to the rising difficulties, 
 by causing metalUc money to be sent out of the country for 
 the purchase of corn. This excited some apprehension on the 
 part of the directors of the bank of England, happening as it 
 did at a time when the exigencies of the state were such, that 
 the bank could not restrict its issues, and especially, as by the 
 law then established, the bank had no longer the power to 
 check any extraordinary demand for bulhon by tendering the 
 lighter coin of the realm to any amount. To meet the wants 
 of government under these accumulating difficulties, the bank 
 was under the necessity of contracting its usual accommoda- 
 tion to bankers, who, to meet their necessities, were obliged 
 to sell out of the funds at such low prices, as caused the ruin 
 of some of them. Their failures caused a fear to prevail, that 
 the credit currency of England was about to share the fate 
 which had recently befallen the paper currency of France, ac- 
 complishing the fulfilment of predictions to that effect which 
 were then freely circulated in all directions ; and though many 
 affected to despise these fears, the number of those Avho chose 
 to be quite safe by taking their guineas into their own custody, 
 was such, that in defiance of all that the government could 
 do, backed by the great capitalists of the nation, such a run 
 was experienced by the bank of England in February 1797, 
 as led the government to sanction the peremptory stoppage of 
 further payments in cash. With the exception that this 
 stoppage of cash payments on the part of the bank of Eng- 
 land was sanctioned by an arbitrary though necessary act of 
 the government, the bank of England would have been placed 
 in precisely such circumstances as many most respectable pri- # 
 vate banking establishments were in at the latter end of 182.5. ; 
 The bank, like the proprietors of those private establishments, 
 might possess abundance of excellent bonds, mortgages, and*'- 
 other securities. Its proprietors might have an absolute con- ;
 
 103 
 
 trol over half the lands, public works, houses, manufactories 
 goods, chattels, 8cc. of the kingdom, but not having got cer- 
 tain pieces of gold and silver, which the creditors had a right 
 to demand of them (if, Shylock-like, they chose to exercise 
 that right according to the strict letter of the contract) the 
 bank of England must, but for the restriction-act, have been 
 as completely broken up for want of gold, as those private 
 banks were broken up for want of bank notes, when the pre- 
 cautions of the bank required that they should withdraw their 
 notes from circulation. The restriction-act had, however, the 
 properties of the philosopher's stone — the credit of the bank 
 of England was made by law to stand in the place of gold, and 
 the government again experienced the benefit of having a 
 paper prop to lean upon. 
 
 In the year following the suspension, a new committee of 
 council for coins was appointed, consisting of almost all the 
 ministers of the state. They were to take the subject into 
 their consideration, and to report their opinions to his Ma- 
 jesty in council. It is said of them, that they made some 
 progress in their inquiries in this extensive and difficult sub- 
 ject, as it was called — that progress appears to have amounted 
 to this : 
 
 With respect to gold, they requested two scientific gentle- 
 men (Mr. Henry Cavendish and Mr. Hatchett) to answer 
 such questions as, whether very soft and ductile gold, or gold 
 made as hard as is compatible with the process of coining, 
 suifers the most by wear; and whether coin, with a flat, 
 smooth, and broad surface, sufters less from wear than coin 
 which has certain protuberant parts raised above the ground : 
 questions which had about as much to do with the case, as, 
 the question of boiling or baking has to do with filling the 
 belly of a man who can get nothing either to boil or baker. 
 With respect to the silver currency, they were no sooner ap- 
 pointed, than it is said they caused a large coinage of silver to 
 be melted down, and restored to the state of bullion, having
 
 104 
 
 probably discovered, from repeated experience, that it was in 
 the course of nature for good new silver, if issued, to fall a 
 prey to the old bad silver. But with respect to the copper, 
 they boast that they had fixed the principles on which coin of 
 that metal should in future be made, and that a certain quan- 
 tity of coins, formed according to those established principles, 
 had been sent into circulation very much to the satisfaction of 
 his Majesty's subjects. This glorious termination to the la- 
 bours of the committee of council for coins, reminds us of the 
 copper farthings of Charles the Second, which, as Lord Lucas 
 said, were, according to the inscription upon them, to vindicate 
 the dominion of the four seas. 
 
 This grave trifling about the metallic currency, however, 
 had its use, and probably the use which Mr. Pitt wished it to 
 have — it served to pass the time on until the people found it 
 possible to do almost without any coin ; and these early pro- 
 ceedings may serve as a specimen of those which government 
 generally adopted upon this topic, until the bullion committee 
 was established in 1810. 
 
 From 1797 the circulating medium was left almost en- 
 tirely to be provided for in a credit currency. The exchequer 
 bills of government, and the promissory notes of the bank of 
 England, furnished the medium through which the dividends 
 were paid, and the supplies purchased, and also that in which 
 the bulk of the revenue was collected. The credit of private 
 individuals, many of them very wealthy, supplied a local cur- 
 rency by which manufacturers and farmers were furnished with 
 means for paying rents, and carrying on the most extensive 
 operations, in some such course as this. The manufacturer, 
 for instance, having employed his capital in the production of 
 a quantity of goods, sold them to the merchant or factor, 
 upon whom he drew a bill for the amount, payable at a given 
 time, say three months. The merchant accepted the bill pay- 
 able at a banker's in London. The country banker, satisfied 
 of the respectability of one or both the parties, risked his own
 
 property upon it, and discounted this three months' bill 
 with his own local notes, payable on demand. With those 
 notes the manufacturer prepared another parcel of goods, with- 
 out waiting till the original bill became due ; for with these 
 local notes he could pay his workman, and the workman could 
 purchase with them the necessaries of life from the butcher, 
 the baker, the grocer, the draper, &c. By these parties the 
 notes were taken back to the banker, from whom it would 
 often happen that some one of them received the manufac- 
 turer's draft, and with it was enabled to pay the wholesale 
 trader in London. There the bill was met, when due, by the 
 produce of the sale of the goods, or by the surplus capital of 
 the merchant, or factor, or his banker, or not unfrequently, at 
 the banker's clearing-house, by another bill from another part 
 of the kingdom, which, after having run a similar career, ope- 
 rated as a set-off against it. Manchester and its neighbour- 
 hood formed some exception to this system. There it be- 
 came the custom to allow interest at the rate of six per cent, 
 per annum for bank of England notes, in the discount of 
 bills ; and this, together with the united opposition of almost 
 all the principal merchants to local paper, confined the circu- 
 lating medium of that district chiefly to bank of England 
 paper. But of local notes in the other parts of England, and 
 in Scotland, there were sufficient to sustain the circulation, 
 so as to admit of nearly the whole amount of the issues of the 
 bank of England being appropriated to the payment of taxes 
 and other government transactions. 
 
 Thus was a local credit currency established in England, 
 resembling in many respects that of which Scotland had long 
 felt the benefit. By its instrumentality, and frequently with- 
 out the intervention of a guinea, multitudes of people were 
 productively employed, well fed, clothed, and lodged. Under 
 its agency commons were cultivated, roads made or improved, 
 canals cut, bridges built, docks constructed, machinery in- 
 vented and brought into action, and public buildings, streets,
 
 106 
 
 and towns sprang up, as if by magic, and the whole nation 
 was as busy as a hive of bees. 
 
 The system, however, was too good in its effects not to be 
 subjected to some serious drawbacks, — one of the chief of 
 which was this : when through faihng harvests, or through 
 the necessity of supporting a large army abroad, or any other 
 occasion, an extraordinary demand for bulUon was created, 
 the bank of England felt it prudent to check the issue of 
 its notes in all cases where it could be done, and to with- 
 draw those already in circulation by sales of exchequer bills. 
 A scarcity of bank-notes being thus produced, funded pro- 
 perty and the products of the manufacturers were forced upon 
 the home and foreign markets, to provide those merchants, 
 bankers, and manufacturers, who were trading at or near the 
 full extent of their property and credit, with the means of 
 meeting their engagements. On these emergencies parties 
 were sometimes ruined, who perhaps a year before might be 
 possessed of immense property ; and their ruin frequently 
 spread considerable loss through the whole of their con- 
 nections. In the mean time the falling market, which the 
 foregoing operation of the bank was sure to produce, effected a 
 re-action in this way : when the price of English funds and 
 English manufactures got down to what was thought to be 
 the lowest pitch, the cautious capitalists, at home and abroad, 
 then brought out their hoards, and withdrew from the markets 
 the stocks on hand : prices then rose, accelerated generally 
 by speculating, large profits for a time were realized, and all 
 was brought round again ; but not until great distress had 
 been inflicted upon many persons. When the calamity arose 
 from the cause here assigned, it is difficult to say where the 
 blame ought to attach. Every man, however, is naturally 
 disposed to censure the cause which comes nearest to himself; 
 thus the tradesmen, who were generally the chief holders of 
 the local notes, blamed the local banker ; he blamed the ma- 
 nufacturer who had drawn, and the merchant who had ac-
 
 J07 
 
 cepted, the bills ; these parties blamed the London banker, or 
 the bank of England ; and the bank of England, by the same 
 rule, was entitled to blame the seasons or the government ; 
 and the government to blame those political causes which 
 made the war just and necessary. 
 
 In other cases mischief was produced by a much shorter 
 route. Some men embarked in the banking business, who, 
 though possessed of wealth, were destitute of the requisite 
 judgment and caution for managing banking concerns. These 
 persons not unfrequently brought ruin upon themselves, loss 
 to some of their neighbours, and disrepute on the banking sys- 
 tem. But in this case it is to be observed, that as the banker's 
 property, though lost to him, was not annihilated, so the 
 public, in relation to the banker, was a gainer, inasmuch as his 
 property had passed to the public, taken in the aggregate. 
 
 Other banking concerns there were, managed by men, 
 who, in the end, proved themselves to be arrant swindlers ; 
 but this was more common in the early stages of the local 
 currency system. Afterwards the facilities afforded for carry- 
 ing in notes for the purpose of getting them exchanged, joined 
 with moderate caution on the part of the people, prevented 
 bankers of this character from getting out a sufficiency of 
 notes to pay the costs of the adventure. 
 
 Another evil attending this system was the wretched state 
 to which the metallic money was reduced. This must be too 
 fresh in the recollection of every one who had connection with 
 business during that period to render particular detail neces- 
 sary. The guinea, though declared by law to be only 1/. Is. 
 sterling, did, on the principle of barter, actually represent at 
 one time 17. 9s. sterling. Many plain pieces of white money 
 were tolerated in the circulation as shillings, w^hich, according 
 to the standard, were not worth more than from threepence 
 to fivepence ; j^nd even the established principles upon which 
 the copper coinage had been made in 1798, were obliged to be 
 departed from as early as 1805, in consequence of a sudden
 
 108 
 
 rise in the price of copper ; and a new coinage of copper was 
 obliged to be made upon some other established principles. 
 
 But this derangement of the metallic money did not essen- 
 tially interfere with our foreign commerce. While the pre- 
 cious metals rated at a high value in England, the operation 
 of a mercantile transaction was simply this. — The merchant 
 purchased goods in England to the amount, say, of 100/. 
 sterling ; for which, when due, he paid 1 00/. in bank notes. 
 The goods being sent to Hamburgh, or some other foreign 
 market, were sold, suppose for eighty guineas, or metallic 
 money of the country equivalent thereto. These guineas 
 being returned to England, where, at the time the market 
 price of the guinea was, in relation to bank notes, 1/. 9s., were 
 sold to the buUionist or foreign banker after that rate; and 
 the merchant received for them 116/. in bank notes, realizing 
 a profit of 16 per cent, on the transaction: then the bank 
 notes were again sent to market to repeat the operation. 
 Thus high nominal prices existed in England, and low nomi- 
 nal prices on the continent, and yet, in consequence of the 
 different mediums, it was profitable to supply the foreign 
 market from this country. For simplicity and clearness, the 
 above transaction is stated as though the bullion were actually 
 transmitted to England ; but it was seldom necessary that 
 this should be the case. Bills on England were supplied by 
 foreign bankers, who had connections in London, which being 
 purchased on the spot, with the currency of each particular 
 country, perfected the transaction as completely upon the 
 above principles as if guineas had been actually sent across 
 the water : this operation gives rise to what is called the 
 course of exchange. 
 
 From time to time a good deal was said in parliament by 
 individual members against this credit system ; but it was not 
 until 1810 that any measures were adopted on the part of parlia- 
 ment likely to affect its vitality. In February of that year a 
 committee was appointed, on the motion of Mr. Horner, for the
 
 109 
 
 purpose of enquiring into the cause of the high price of bul- 
 lion, and its effect on the value of the credit currency. This 
 committee gave it as their opinion that the evil arose from the 
 issue of bank of England notes being too great ; — that a ge- 
 neral rise of all prices, a rise in the market price of gold, and 
 a fall in the foreign exchanges, will always be the effect of an 
 undue quantity of circulating medium in a country which has 
 adopted a currency not exportable to other countries, or not 
 convertible, at will, into a coin that is exportable ; and that no 
 sufficient remedy for the present evil, or security against its 
 recurrence existed, except in the repeal of the law which sus- 
 pended cash payments. They were aware that some difficul- 
 ties would attend the doing of this, but conceived that all 
 hazards to the stability of the bank, and all injury to public 
 credit, might be obviated by restricting cash payments for two 
 years longer, and by intrusting to the bank itself the charge 
 of conducting and completing the operation. 
 
 Before the next session of parliament the commercial dis- 
 tresses of the nation had become so great, that parliament 
 then deemed it necessary to authorize six millions to be ad- 
 vanced to merchants, on their giving sufficient security ; but 
 such was the fall in the value of mercantile property, that it 
 was not many who could give the adequate security, and the 
 Gazette teemed with bankrupts. Whether this great distress 
 was at all brought about by the bank making preparation 
 for the return of cash payments, as recommended by the bul- 
 lion committee, or whether it was wholly attributable to the 
 American embargo, or the Berlin and Milan decrees, there 
 may be some difficulty in determining ; but experience has 
 repeatedly shewn, since that time, that the bank has never 
 made preparation for a return to cash payments without 
 the most disastrous consequences to the country. 
 
 The Report of the Bullion Committee was brought before 
 the House in May 1811. On the part of the Committee, it 
 was contended, that the standard value of gold, as a measure
 
 no 
 
 of exchange, could not possibly fluctuate under any change of ^ 
 circumstances, though its real price was unquestionably sub- 
 ject to all the variations arising from the increase or diminu- 
 tion of the supply ; and that bank paper measured by this 
 standard was depreciated. 
 
 The buUionists were opposed by Mr. Vansittart, on the 
 part of the ministry, who moved a number of counter re- 
 solutions, in which it was declared, that bank notes were 
 not depreciated ; that the political and commercial relations 
 of England with foreign states were sufficient to account for 
 the unfavourable state of the foreign exchanges, and the high 
 price of bullion. The argument turned upon this, whether the 
 variation which had arisen in the usual rate of guineas to bank 
 notes, ought to be attributed to guineas being enhanced, or to 
 bank notes being depreciated. If the parties could or would 
 have agreed upon some third measure of value as a test, the 
 question might have been determined in a few words. — Thus, 
 make the mode by which the value of the national debt 
 was estimated, and the dividends payable, the test, and the 
 bank note was not depreciated, but the guinea raised. 
 On the other hand, according to the laws of barter, by 
 which all mercantile transactions are regulated, make corn 
 or silver, or any other article in general demand, the test, and 
 it would be found that the guinea was not enhanced, but 
 that the bank note was depreciated. But it suited not the 
 contending parties to agree upon a test, and therefore, after 
 a discussion, which was but ringing changes upon words, 
 and which engaged the House of Commons seven nights, 
 the strength of the ministry prevailed ; and it was resolved 
 that the bank note was not depreciated, but that it was highly 
 important the restrictions on cash payments at the bank 
 should be removed, whenever it was compatible with the ^ 
 public interest ; and that to fix a definite period earlier than 
 that of six moi-ths after the conclusion of peace, which term
 
 Ill 
 
 was that already fixed, Avould be highly inexpedient and 
 dangerous. 
 
 After this Lord King took another mode of trying the 
 question : he reminded his tenants that they had agreed to 
 pay their rents in good and lawful money of Great Britain ; 
 and as he would no longer accept of bank notes at their 
 nominal value, he called upon them to pay either in guineas, 
 or in an equivalent weight of Portuguese gold coin, or in 
 bank notes sufficient to purchase at the existing market 
 price the worth of as much standard gold as would discharge 
 the rents. This called forth a law, at the sug-orestion of Lord 
 Stanhope, for preventing the current gold coin of the realm 
 from being paid at more than its value, and for preventing 
 bank notes from being received for any smaller sum than that 
 for which they were issued. From this period to the termina- 
 tion of the war, the credit currency system received no further 
 interruption from the measures of parliament. 
 
 As the bank of England, by the laws in force, was liable 
 to pay its notes in demand in cash within six months after 
 peace was established ; no sooner was there a fair prospect 
 of that event, than the bank, it may be presumed, wisely 
 prepared itself for the claims that awaited it. Much as- 
 sistance was no doubt afforded it in doing this, by the dis- 
 position which now prevailed to invest capital in the British 
 funds from all parts of the world. As the certainty of peace 
 became greater, gold continued to accumulate in England, so 
 that the bank of England was enabled, in October 1814, to 
 reduce the value of gold, in relation to bank notes, to 
 41. 5s. per ounce. 
 
 So far it is probable the bank merely submitted to cir- 
 cumstances which originated in the natural course of mer- 
 cantile proceedings, and did not at all attempt to govern 
 those circumstances ; but after this, whether it was that 
 some suspicion began to arise among the bullionists that 
 Buonaparte might yet involve England again in war, or that
 
 112 
 
 Buonaparte liimself was drawing resources out of the English 
 funds by the instrumentality of agents, or whether the in- 
 flux of o;old into Enarland had left the foreign market too 
 scantily supplied, and that the tide began to ebb in the 
 natural course of trade, it is not easy to say ; but from some 
 cause or other, before the conclusion of the year, gold had 
 manifested a disposition again to advance, and on the 3rd of 
 January 1815, it is quoted at 4/. 6s. 6d. per ounce. Then no 
 doubt the bank began to feel the necessity of doing all that 
 it could to restrict its issues. In the month of February 
 1815, according to the printed tables, the amount of notes of 
 the bank of England in circulation were 2,300,000 less than 
 they had been in the August preceding. The re-appearance 
 of Buonaparte in France early in March, admitted not 
 of the bank of England pursuing this prudential conduct, 
 and the mercantile value of gold was again so enhanced 
 in relation to the bank note or pound sterling, that on the 
 2nd of May its price is quoted at 51. 6s. per ounce. It is 
 difficult to conceive a finer field for speculation than this 
 period was calculated to afford those who had access to 
 the earliest information, and means of taking advantage of 
 it. After the decisive battle of Waterloo, the course of ex- 
 change against England rapidly declined, and a bill being 
 passed to continue the restriction of cash payments until the 
 5th of July 1816, the bank was again furnished with means 
 and time for reducing the mercantile value of gold in rela- 
 tion to its own notes. In Januaiy, 1816, gold was brought 
 down to 4:1. 2s. per ounce. In February the amount of bank 
 notes in circulation, it appears, was nearly one million less 
 than it was in February the preceding year, which was just 
 before the news arrived of Buonaparte's escape from Elba. 
 By the month of May the price of gold had become further 
 reduced to 4/. per ounce. But the contraction of the credit 
 currency by which this reduction was attained, now pro- 
 duced very great distress among the people of England, and
 
 113 
 
 especially among those of the middle and lower ranks of 
 society, whether engaged in agriculture, manufactures or trade • 
 first by rendering money scarce at home, and so forcing down 
 prices, whilst rents, taxes, and all existing engagements, 
 were numerically at their old amount ; and, secondly, by 
 drawing the metallic money from other countries, and so dis- 
 tressing them and crippling our foreign trade. 
 
 Little suspecting how much the contraction of the cuiTency 
 had to do with their distress, the agriculturists sought relief 
 by proposing enactments against the importation of foreign 
 corn. Men engaged in manufactures and trade opposed 
 those enactments, and sought relief by petitioning parliament 
 for a remission of taxation. The working class in the agricul- 
 tural districts attributing their reduced wages and lack of em- 
 ployment, not to the want of money on the part of their mas- 
 ters, but to the employment of thrashing-machines, and other 
 substitutes for human labour, assembled in tumultuous bands 
 to destroy them. The working manufacturers partaking of the 
 same feeling with respect to any machinery newly adopted by 
 their employers, for some time carried on in secret a system of 
 destruction, to which not only machinery, but human life, 
 was frequently sacrificed. 
 
 In the spring of 1816, whilst these troubles were in progress, 
 the restriction on cash payments was further extended from 
 July 1816 to July 1818, and a bill was passed for a new silver 
 coinage. By this coinage the pound weight of silver was 
 ordered to make 3/. 6s. sterling;. This was four shilling's in 
 the pound weight lighter than the former legal standard, but 
 of course an infinite improvement upon the current standard. 
 On this further extension of the restriction-act, the bank ap- 
 pears to have given more expansion to its issues, but not to 
 have relaxed its efforts to be prepared for the resumption of 
 cash payments, for in October the price of gold was further 
 lowered to 3/. 19s. per ounce. 
 
 In January 1817, the bank gave notice that they were ready-
 
 M4 
 
 to pay in cash a certain description of their outstanding notes, 
 by which they rendered themselves liable to a demand of 
 about a million of pounds sterling ; but it appears that only a 
 very small part of that sum was called for. In June, that 
 year, the chancellor of the exchequer stated, that nothing less 
 than an extraordinary political or commercial shock would pre- 
 vent payments in cash from taking place in July 1818, as 
 already fixed. Certainly, if the bank had felt themselves called 
 upon at all hazards to adopt cash payments immediately, it 
 would, so far as the directors were concerned, have been no diffi- 
 cult task; for, by somewhat restricting their issues, it would 
 have been very easy for them to have brought gold below par ; 
 but great additional distress must in that case have fallen 
 upon the community : that is to say, the bank directors with- 
 drawing a million of their notes from circulation, would have 
 prevented a great number of merchants from fulfilling their 
 money engagements without forcing their stocks unnaturally 
 upon the market, their doing which would have depressed 
 prices, and crippled manufacturers ; that again would have 
 thrown workmen out of employ, or would have compelled 
 them to work for reduced wages ; and so, in the end, by 
 giving our products to foreign countries at half or two-thirds 
 of their cost price, the million of notes withdrawn by the 
 bank would at length have been supplied by bullion thus 
 unnaturally forced from surrounding nations. But instead of 
 this, the bank appears to have been as solicitous to avoid an 
 over-contraction of its issues as to effect the resumption of 
 cash payments; and it is only justice to that establishment- to 
 infer that they were truly desirous to effect this resumption, 
 from the offer which they had already voluntarily made, and 
 which they further extended in October 1817. In that month, 
 notice was given that they would pay in cash all notes dated 
 prior to 1817. 
 
 But in the progress of these events, the distress of the peo- 
 ple for want of employment became so great, that it was felt to 
 be quite as important to the public welfare, to provide means
 
 115 
 
 whereby the people might get bank-notes for their labour, and 
 food for their bank-notes, as to afford them an opportunity of 
 getting gold for bank-notes, which notes they had not the 
 means of obtaining. In furtherance of this, in 1817 and 1818, 
 no pains were spared to excite the wealthy to the free expen- 
 diture of their incomes, and in numerous cases they complied 
 without any regard to a profitable return upon such expendi- 
 ture. The bank of England also, which was thought by 
 many to have been too vigorous in its preparations to return 
 to cash payments, was called upon to extend its issues : and 
 in the early part of 1818, parliament granted one million of 
 pounds to be raised by exchequer-bills for the purpose of 
 building new churches where the increased population was 
 thought to require them. It is but justice to believe that the 
 same principle which prompted the bank voluntarily to adopt 
 cash payments sooner than the time fixed, led them now to 
 extend their issues when required to do so by the government. 
 In such a case, and under such circumstances, they were en- 
 titled to expect the protection of government in the event of 
 any attack upon the interests of the bank, and through it 
 upon the interests of the people, which might arise from spe- 
 culations in bullion, or from the money arrangements of 
 foreign states. For the natural supplies of the home circula- 
 tion, their recent experience (viz. the non-acceptance of their 
 offer to pay in bullion to the extent of one million of pounds) 
 justified them in thinking there would arise no extraordinary 
 demand. From these and the like circumstances, credit capi- 
 tal began freely to assume the character of credit currency, 
 and the national distress was in a fair way of being removed ; 
 but scarcely had the working people begun to experience an 
 improvement in their condition, before it was found that the 
 gold was rapidly leaving the kingdom. Various causes were 
 assigned for this ; such as large remittances to foreign coun- 
 tries for corn, rendered necessary, as it was said, by the failure 
 of the preceding year's crop in England — the migration of 
 
 H 2
 
 IIG 
 
 Englishmen to the continent, and the negociation of a large 
 French loan in England. Whatever the cause might be, the 
 chancellor of the exchequer found it necessary, before the 
 close of the session in 1818, to state to parliament the fact, 
 that the bank had been called upon for upwards of two mil- 
 lions and a half of gold under their notice of October 1817, 
 and, therefore, that it was not advisable for the bank finally 
 to resume cash payments in July 1818, as had been intended ; 
 and in consequence of this communication, the bank restric- 
 tion act was agreed to be continued until the 5th of July, 1819. 
 
 Throughout these proceedings, the conduct of the bank 
 directors appears to have been dictated by an anxious desire to 
 meet the wishes of the representatives of the public ; but 
 they found them a fastidious body to please. The bank con- 
 tinued to pay in cash, agreeably to their notice of October 
 1817. 
 
 In February 1819, a committee was appointed by par- 
 liament to inquire into the state of the bank of England, 
 with reference to the expediency of the resumption of cash 
 payments at the fixed time, viz. July 5, 1819. 
 
 On the 24th of March, prior to the presentation of the first 
 report of the Bullion Committee, the bank directors were 
 asked by the Lords' Committee, " whether they had any, or 
 what objection to urge against the passing a law to require 
 the bank to pay its notes in bullion on demand, but in sums 
 not less in amount than one, two, or three hundred pounds, 
 at 3/. 17s. lO^d. per ounce, and to buy gold bullion at 
 3/. 17s. 6d. per ounce, by an issue of its notes." The sub- 
 stance of the reply on the part of the bank was, that " the 
 directors were not aware of any difficulty in exchanging notes 
 for bullion of a certain weight, provided it were melted, 
 assayed, and stamped by his Majesty's mint, but that they 
 doubted the attainment of bullion by the bank at 3/. 17s. 6d., 
 and that, therefore, the directors did not feel themselves com- 
 petent to engage to issue bullion at 31. 17s. 10|c?. per ounce.
 
 117 
 
 under all circumstances ; but as an alternative, they suggest- 
 ed the expediency of the bank furnishing bullion to the ex- 
 tent stated, a^ the market price, as taken onthe preceding foreign 
 post-day, in exchange for its notes, a reasonable time being 
 allowed for the bank to prepare itself to try the effect of such 
 a measure." 
 
 On the 5th of April, Mr. Peel brought up the first report of 
 the Bullion Committee. — That report represented that the 
 bank had been drained of upwards of five millions in cash, 
 under its notice of October 1817, which cash, it was stated, 
 had found its way to the continent, and had been there re- 
 coined into foreign money.* To check this, and to enable the 
 bank to accumulate a greater quantity of bullion with a view 
 to the final resumption of cash payments, it was proposed that 
 a bill should immediately be passed by parliament to restrain 
 the bank from any further payment of the notes alluded to in 
 the above notice. A bill to this effect did accordingly pass 
 the Commons that night, and next night it passed the House 
 of Lords. And thus terminated the second attempt which the 
 bank made for the resumption of cash payments. 
 
 The second report of the committee was brought before 
 the House on the 5th of May. Agreeably to the sugges- 
 tions of that report, the following plan for the return to cash 
 payments was established by law. 
 
 Provision was to be made for the gradual repayment of the 
 sum of ten millions of pounds, being part of the sum due to the 
 bank on account of advances for the public service. 
 
 From February 1, 1820, the bank was to deliver on de- 
 mand gold of standard fineness, having been assayed and 
 stamped at the mint, in exchange for notes, at the rate of 
 4/. Is. per oz. ; but not to be liable to a demand for a less 
 quantity than sixty ounces at a time. 
 
 * From Jan. 1, 1817, to Jan. 1, 1819, the bank it appears was called 
 upon for £6,756,000.
 
 118 
 
 From October 1, 1820, the bank should be required to de- 
 liver gold upon the same plan, at the rate of 3/. 19s. 6c?. per oz. 
 And from May 1, 1821, (on the hke plan) at 3/. 17s. 10|fi. 
 
 The bank was to be allowed to anticipate each of the above 
 periods ; but any of the intermediate rates being once fixed, the 
 bank was not to avail itself again of the prescribed scale. 
 
 From May 1, 1823, the bank was to pay its notes on de- 
 mand in the legal coin of the realm. 
 
 It was also deemed expedient to repeal the laws by which 
 the melting and exportation of the coin were prohibited. 
 
 The bill, by which the above mode for restoring cash pay- 
 ments was established, was brought before the house by Mr. 
 Peel, and has since been well known by its connection with his 
 name. One of the most remarkable circumstances attending 
 the enactment of this measure, was that Sir Robert Peel was 
 as conscientiously and decidedly opposed to it as his son was 
 in its favour. The bank of England being sounded as to its 
 approval or disapproval of this measure, the experienced 
 directors of that establishment, aware of the difficulties 
 which would be brought upon the country by the measures 
 which that bill would imperatively impose on them, sub- 
 mitted the subjoined representation to the chancellor of the 
 exchequer. 
 
 " The directors of the bank of England, having taken into their most 
 serious consideration the reports of the secret committees of the two 
 houses of Parliament, appointed to inquire into the state of the bank 
 of England, with reference to the expediency of the resumption of 
 cash payments at the period now fixed, — have thought it their duty to 
 lay before His Majesty's ministers, as early as possible, their senti- 
 ments, with regard to the measures suggested by these committees for 
 the approbation of Parliament. 
 
 " In the first place it appears, that, in the view of the committees, the 
 measure of the bank recommencing cash payments on the 5th of July 
 next, the time prescribed by the existing law, " is utterly impracti- 
 " cable, and would be entirely inefficient, if not ruinous." 
 
 " Secondly, it appears that the two committees have come to their
 
 119 
 
 conclusion at a period, when the outstanding notes of the bank of 
 England do not much exceed 25,000,000?. ; when the price of gold is 
 about 4?. Is. per ounce ; and when there is great distress, from the 
 stagnation of commerce, and the fall of prices of imported articles. 
 
 " It must be obvious to his Majesty's ministers, that, as long as such 
 a state of things shall last, or one in any degree similar, without either 
 considerable improvement on one side, or growing worse on the other, 
 the bank, acting as it does at present, and keeping its issues nearly 
 at the present level, could not venture to return to cash payments, 
 with any probability of benefit to the public, or safety to the establish- 
 ment. 
 
 " The two committees of parliament, apparently actuated by this con- 
 sideration, have advised that the bank shall not open payments in coin 
 for a period of four years, but shall be obliged, from the 1st of May, 
 1821, to discharge their notes in standard gold bullion, at mint price, 
 when demanded in sums not amounting to less than thirty ounces. And, 
 as it appears to the committees expedient, that this return to pay- 
 ments at mint price should be made gradually, they propose that on the 
 first day of February next, the bank should pay their notes in bullion, if 
 demanded in sums not less than sixty ounces, at the rate of 41. Is. an 
 ounce, and from the 1st of October, 1820, to the 1st of May following, 
 at 3/. 19*. 6d. an ounce. 
 
 " If the directors of the bank have a true comprehension of the views 
 of the committees in submitting this scheme to parliament, they are 
 obliged to infer, that the object of tlie committees is to secure, at every 
 hazard, and under every possible variation of circumstances, the re- 
 turn of payments in gold at mint price for bank notes, at the expiration 
 of two years ; and that this measure is so to be managed, that the 
 mint price denominations shall ever afterwards be preserved, leaving 
 the market or exchange price of gold to be controlled by the bank, 
 solely by the amount of their issues of notes. 
 
 " It further appears to the directors, with regard to the final execution 
 of this plan, and the payment of bank notes in gold at mint price, 
 that discretionary power is to be taken away from the bank ; and that 
 it is merely to regulate its issues, and make purchases of gold, so as 
 to be enabled to answer all possible demands, whenever its treasury 
 shall be again open for the payment of its notes. 
 
 " Under these impressions, the directors of the bank think it right to 
 observe to his Majesty's ministers, that being engaged to pay on de- 
 mand their notes in statutable coin, at the mint price of 3l. I7s. lO^d. 
 an ounce, they ought to be the last persons who should object to any
 
 120 
 
 measure calculated to effect that end ; but as it is incumbent on them 
 to consider the effect of any measure to be adopted, as operating upon 
 the general issue of their notes, by which all the private banks are 
 regulated, and of which the whole currency, exclusive of the notes 
 of private bunkers, is composed, they feel themselves obliged, by the 
 new situation in which they have been placed by the Restriction Act 
 of 1797, to bear in mind, 'not less their duties to the community at 
 large, whose interest in a pecuniary and commercial relation, have in 
 a great degree been confided to their discretion. 
 
 " The directors being thus obliged to extend their views, and embrace 
 the interest of the whole community, in their consideration of this 
 measure, cannot but feel a repugnance, however involuntary, to pledge 
 themselves in approbation of a system, which in their opinion, in all 
 its great tendencies and operations, concerns the country in general 
 more than the immediate interests of the bank alone. 
 
 " It is not certainly a part of the regular duty of the bank, under its 
 original institution, to enter into the general views of policy, by which 
 this great empire is to be governed, in all its commercial and pecuniary 
 transactions, which exclusively belong to the administration, to Par- 
 liament, and to the community at large ; nor is it the province of the 
 bank to expound the principles by which these views ought to be re- 
 gulated. Its peculiar and appropriate duty is the management of the 
 concerns of the banking establishment, as connected with the payment 
 of the interest of the national debt, the lodgments consigned to its 
 care, and the ordinary advances it has been accustomed to make to 
 government. 
 
 " But when the directors are now to be called upon, in the new situa- 
 tion in which they are placed by the Restriction Act, to procure a fund 
 for supporting the whole national currency, either in bullion or in coin, 
 and when it is proposed that they should effect this measure within a 
 given period, by regulating the market price of gold by a limitation 
 of the amount of the issue of bank notes, with whatever distress such 
 limitation may be attended to individuals, or the community at large; 
 they feel it their bounden and imperious duty to state their sentiments 
 thus explicitly, in the first instance to his Majesty's ministers, on this 
 subject, that a tacit consent and concurrence at this juncture may not, 
 at some future period, be construed into a previous implied sanction on 
 their part, of a system, which they cannot but consider fraught with 
 very great uncertainty and risk. 
 
 It is impossible for them to decide beforehand what shall be the course 
 of events for the next two, much less for the next four years ; they have
 
 121 
 
 no right to hazard a flattering conjecture, for which they have not real 
 grounds, in which they may be disappointed, and for which they may 
 be considered responsible. They cannot venture to advise an unrelent- 
 ing continuance of pecuniary pressures upon the commercial world, of 
 which it is impossible for them either to foresee or estimate the conse- 
 quences. 
 
 " The directors have already submitted to the House of Lords the 
 expediency of the bank paying its notes in bullion at the market price 
 of the day, with a view of seeing how far favourable commercial 
 balances may operate in restoring the former order of things, of which 
 they might take advantage : and with a similar view they have pro- 
 posed, that government should repay the bank a considerable part of 
 the sums that have been advanced upon exchequer bills. 
 
 " These two measures would allow time for a correct judgment to be 
 formed upon the state of the bullion market, and upon the real result 
 of those changes, which the late war may have produced, in all its con- 
 sequences, of increased public debt, increased taxes, increased prices, 
 and altered relations, as to interest, capital, and commercial dealings 
 with the Continent ; and how far the alterations thus produced are tem- 
 porary or permanent ; and to what extent, and in what degree, they 
 operate. 
 
 " It was the design of the directors, in pursuance of the before-men- 
 tioned two measures, to take advantage of every circumstance which 
 could enable the bank to extend its purchases of bullion, as far as a 
 legitimate consideration of the ordinary wants of the nation, for a suffi- 
 cient currency, could possibly warrant. Beyond this point, they do not 
 consider themselves justified in going, upon any opinion, conjecture, or 
 speculation, merely their own; and when a system is recommended, 
 which seems to take away from the bank any thing like a discretionary 
 consideration of the necessities and distresses of the commercial world ; 
 if the directors withhold their previous consent, it is not from a want 
 of deference to his Majesty's government, or to the opinions of the 
 committees of the two houses of Parliament, but solely from a serious 
 feeling, that they have no right whatever to invest themselves, of their 
 own accord, with the responsibility of countenancing a measure, in 
 which the whole community is so deeply involved; and possibly to 
 compromise the universal interests of the empire, in all the relations of 
 agriculture, manufacture, commerce, and revenue, by a seeming ac- 
 quiescence, or declared approbation, on the part of the directors of the 
 bank of England. 
 
 " The consideration of these great questions, and of the degree in which
 
 122 
 
 all these leading and commanding interests may be affected by the mea- 
 sure proposed, rests with the legislature ; and it is for them, after 
 solemn deliberation, and not for the bank, to determine and decide upon 
 the course to be adopted. 
 
 " Whatever reflections may have from time to time been cast upon the 
 bank, whatever invidious representations of its conduct may have been 
 made, the cautious conduct it adopted, in so measuring the amount of 
 currency, as to make it adequate to the wants both of the nation and of 
 the government ; at the same time keeping it within reasonable bounds, 
 when compared with what existed before the war, as is shown in the 
 Lords' Reports, pages 10, 11, 12 and 13; the recent effort to return to a 
 system of cash payments, which commenced with the fairest prospects 
 (but which was afterwards frustrated by events that could not be fore- 
 seen nor controlled by the bank ;) are of themselves a sufficient refutation 
 of all the obloquy, which has been so undeservedly heaped upon the 
 establishment. 
 
 " The directors of the bank of England, in submitting these conside- 
 rations to his Majesty's ministers, request that they may be allowed to 
 assure them, that it is always their anxious desire, as far as depends 
 upon them, to aid, by every consistent means, the measures of the 
 legislature, for furthering the prosperity of the empire. 
 
 " ROBERT BEST, Sec." 
 
 Unfortunately for the people of England, the bank direc- 
 tors had but little credit given to them for disinterestedness, 
 in any suggestions which proceeded from them. And there- 
 fore, notwithstanding this representation, Mr. Peel's bill, for 
 accompUshing cash payments, received the general approval 
 of parliament. But the bill was no sooner passed than its 
 malignant consequences began to be felt. On the authority 
 of some monied men, it had been thought by parliament 
 that the difference between the existing market price of gold, 
 viz. 4/. Is. per oz., and that to which the progressive operation 
 of the bill would bring it, viz. 3/. 17s. \0^d. per. oz. (being 
 about three and three-quarters per cent.) would constitute the 
 whole of the declension in the price of goods which would 
 arise from its operation. Facts, so notorious as to be within 
 the recollection of every person connected with trade, agricul-
 
 123 
 
 ture or money, very soon proved how miserably mistaken 
 they were who made this calculation. At the very time when 
 three millions of fresh taxes were obliged to be levied upon 
 the people, to enable government to pay its debt for the late 
 advances, the prices of all kinds of commodities, whether 
 the produce of agriculture or manufacture, came tumbling 
 down, until, in a short time, it was a rare thing to realize 75/. 
 for that which had been worth 100/. Wages for labour of 
 all kinds experienced a similar fall. In the mean time, as 
 the government dividends were now fixed to be paid in gold, 
 at 3/. 17.S. 10^. per oz. after the 1st of May 1821, and in legal 
 coin after the 1st of May, 1823, stocks continued gradually 
 to advance, which, inducing investments from abroad, fur- 
 nished the bank, by natural means, with the opportunity 
 of accumulating in its coffers an ample store of the precious 
 metals ; but this was attended with the impoverishment of 
 neighbouring states, which were distressed for want of t^iieir 
 usual currency. And though the export of British manu- 
 factures increased, yet for want of currency abroad, prices 
 were continually on the decline. 
 
 There can be no occasion for surprise, that under such cir- 
 cumstances a spirit of discontent should have been again 
 aroused throughout the nation. It manifested itself under 
 two distinct characters, viz. that of Luddism, or a systematic 
 plan to destroy whatever new machinery was introduced : and 
 that of immense political meetings, the alleged purpose 
 of which was to obtain a reform in parliament. It must be 
 confessed that the mode of raising the last three millions of 
 taxes, was such as to furnish the leaders of those political 
 meetings with very popular subjects for declamation ; for in- 
 stead of the money being at once raised from property, a large 
 portion of it was drawn, in the first instance, from additional 
 duties on tobacco, tea, and coffee, the little luxuries and com- 
 forts of the working classes. At other times, and under 
 better circumstances, this would have passed unnoticed by
 
 124 
 
 them ; but coming at a time when the operation of the money 
 system was such as to deprive them of a large portion of their 
 wages, the enhancement of the price of these articles by tax- 
 ation was almost more than they could bear peacefully : at all 
 events, it was enough to make them lend a willing ear to 
 those mischievous and disaflfected persons, who in secret sti- 
 mulated them to destroy machinery, as a means of raising 
 their own wages ; and at public meetings told them the new 
 taxes had fallen upon the few comforts of the common people, 
 because their interests had not a fair representation in parlia- 
 ment. 
 
 In the face of the difficulties which were overwhelming 
 all classes of the people of England, and which were gradu- 
 ally extending themselves from the lowest extremities of the 
 body politic to the greatest interests in the state, the mea- 
 sures of Mr. Peel's bill were persevered in ; and the bank of 
 England, in proof of its willingness to do what it could to 
 meet the wishes of parliament and of the advocates for cash 
 payments, finding itself in possession of sufficient gold, from 
 the causes already assigned, to make payments in cash 
 sooner than the law prescribed, obtained an act by which it 
 was made imperative upon them to pay all demands in the 
 legal coin of the realm on the 1st of May 1822, instead of 
 the 1st of May 1823. This being the end at which Mr. Peel's 
 bill aimed, the attainment of it one year sooner than the bill 
 anticipated, was thought a great national benefit; but in the 
 next year it was made a charge against the bknk that they had 
 increased the distress by attaining the end too soon. How- 
 ever, such was the languid state to which trade and agriculture 
 were reduced, when it was attained ; so tardily did gold fulfil 
 the purposes of the circulation ; that before it could reach the 
 landlords on their half yearly rent-days, the tax collector, the 
 poor rates, and the daily outgoings of the farm, had, in many 
 instances, absorbed the whole of it. 
 
 Many strange arguments were adduced to explain the caus6
 
 125 
 
 of the evils thus felt by all classes. The spirit of the Lud- 
 dites, and of those in the Isle of Ely who some time before 
 had been hanged for destroying corn stacks, seemed to have 
 been caught up by some persons in the higher classes of 
 society, if we may be allowed to judge of the spirit of men 
 by their words. For in the latter end of 1821, and the early 
 part of 1822, one of the most popular modes of accounting 
 for the national distress was, to attribute it to the extraordi- 
 nary productiveness which it had pleased heaven for some 
 years to confer, not only upon the land of England, but upon 
 that of the surrounding countries. Mr. Ricardo introduced 
 this doctrine in his pamphlet " On Protection to Agriculture." 
 After stating in general terms the effect of twenty-one 
 millions of quarters of corn being produced in a country in 
 one year, when fourteen millions were enough for the consump- 
 tion, he proceeds as follows : " This is I think, certain, that the 
 aggregate value of an abundant crop of corn will always be 
 considerably less than the aggregate value of an average one : 
 and that the aggregate value of a very limited crop will be 
 considerably greater than that of an average crop. If (says 
 he,) 100,000 loaves were sold every day in London, and the 
 supply should all at once be reduced to 50,000 per day, can 
 any one doubt but that the price of each loaf would be con- 
 siderably more than doubled ? The rich would continue to 
 consume precisely the same number of loaves, although the 
 price was tripled or quadrupled. If, on the other hand, 
 200,000 loaves, instead of 100,000, were daily exposed for 
 sale, could they be disposed of without a fall of price, far 
 exceeding the proportion of the excess quantity ? Why 
 (continues Mr. R.) is water without value, but because of 
 its abundance ? If corn were equally plenty, it would have 
 no greater value, whatever quantity of labour might have 
 been bestowed on its production." See p. 19. 
 
 Substitute, for loaves in the preceding paragraph, sheep, 
 oxen, webs of cloth, hats, stockings, or shoes, in fact, any
 
 126 
 
 other article the supply of which is essential to the comforts 
 of a people ; and by parity of reasoning it follows, that 
 the greater the aggregate quantity, the less will be its aggre- 
 gate value. 
 
 The remedy suggested for curing the national distress, by 
 those who attributed it to the excessive production of the 
 earth, was somewhat more slow than that adopted by the Ely 
 rioters in 1816 ; but it was calculated, had it been acted 
 upon, to become infinitely more operative. 
 
 It was stated that mean soils had been made productive at 
 too great cost of capital ; that the check on the value of pro- 
 duce was salutary; and that the only remedy for it was to 
 suffer those lands, which did not yield a profit at existing 
 prices, to go back into a state of barrenness. Had this remedy 
 been promptly applied, so little land was there at that time 
 which did yield a profit, that we should presently have seen 
 famines return upon us like those of the 12th, 13th, and 14th 
 centuries, when the people where glad to eat hogs' wash, or 
 one another. No one can say how far this ridiculous doctrine 
 of over-production might have extended amongst those who 
 value things merely by the money they will bring, if people 
 had not been called to their senses by the cry of famine from 
 Ireland, almost at the same moment that the foregoing senti- 
 ments were receiving the cheers of the British parliament- 
 From that time superabundance of food ceased to be talked 
 of; and those columns in the newspapers, which one week 
 were occupied by parliamentary speeches, attributing the 
 national distress to over-production, were the next filled with 
 long lists of subscriptions for the poor Irish, who, it now 
 appeared, to pay the debt of the day, had been obliged to 
 sell their provisions for the morrow, and were actually starv- 
 ing for want of food ; thus affording a specimen of the plan 
 upon which many English farmers were soon after obliged to 
 act. 
 
 Another class of political economists were for abrogating
 
 J27 
 
 the poor-laws altogether, arguing in something like this strain : 
 that if poor people were not born, they could not be starved to 
 death ; and if there were no poor-laws, poor people would not 
 marry, and poor children would not be born : such a luxury 
 as a poor-house, or a parish maintenance of from three to five 
 shillings a week, operates as a premium to induce poor people 
 to marry, and to beget children who shall also inherit this 
 parish affluence. Starvation having at this time arisen in that 
 part of the British dominions where there were no poor-laws, 
 might, one would hope, satisfy this class of political econo- 
 mists of their error. 
 
 No sooner had the nation attained the ultimate perfection of 
 a return to cash payments, than the lack of rents for the rich, 
 and of food for the poor, became two such crying evils, 
 that a willing ear was again lent by parliament to the ad- 
 vocates of the credit currency ; and in about two months after 
 the bank was ready to pay all demands upon it in coin, and 
 had voluntarily subjected itself, by law, to the doing so, 
 another act was passed, by which the government sanctioned 
 the circulation of small local notes until 1833, at which time 
 the charter of the bank of England was to expire. 
 
 At that time, so deeply impressed was the author of these 
 remarks with a sense of the evils to be apprehended from 
 the terms on which the act of 1819 required all transactions 
 on credit to be liquidated, that in March 1823, he submitted 
 his opinions upon the subject to several gentlemen assembled 
 for the purpose, at a public meeting. His opinions, as set 
 forth in the subjoined address, received the general sanction 
 of that meeting, after he had answered some questions which 
 were put to him, relative to the effect which his proposition 
 was calculated to have upon our foreign trade ; for the satisfac- 
 tory answering of which questions he was much indebted to the 
 experimental knowledge of a gentleman present, who had for 
 several years been successfully engaged in mercantile life at 
 Liverpool, but who had then retired from it, and was, at the
 
 128 
 
 time in question. High Sheriff of the county in which the 
 address was delivered. 
 
 « Sib, 14 March, 1823. 
 
 " Aware of the intricacy of that subject which we are here met 
 to take into consideration, and of the impossibility of doing justice 
 to the enquiry by any verbal representation, I have committed to 
 writing those opinions which I entertain, and which I now beg to 
 submit to the judgment of yourself and the gentlemen present. 
 Local or peculiar circumstances may exempt us who are here, and 
 many other individuals, from the immediate or fatal pressure of 
 the present times ; but however this may be, I apprehend that only 
 one impression prevails among ourselves, and generally throughout 
 the kingdom, that the country is at presently greatly distressed, and 
 that the inability on the part of the community to fulfil their pecuniary 
 engagements is daily increasing. It is, I believe, a conviction widely 
 spreading (my own conviction it has long been) that the distress is not 
 attributable to any redundancy of produce in the country, nor to any 
 want of internal trade, or of sufficiently extensive commerce ; but 
 that it is attributable mainly to the altered state of the national 
 currency : and great as I believe the evil arising from this circum- 
 stance already is, I am of opinion, that our present cash laws (when 
 the time shall come for them to be fully acted upon) are liable to pro- 
 duce far greater inconvenience and distress to the country than it has 
 yet experienced. But I also believe, that those laws admit of an easy 
 correction, and further conceive, that such correction may be given 
 them as shall perpetuate all the benefits of a metallic currency, while 
 at the same time it guards us from a great evil which is to be appre- 
 hended from the present system. 
 
 The evil to which allusion is here made, and to which I beg to 
 direct the attention of this meeting, arises from the possibility of 
 the currency of the realm, as it now stands, being monopolized by 
 a few monied individuals for private gain. This will appear no un- 
 reasonable ground of alarm, when it is recollected, that the necessi- 
 ties of the state alone require that about 50 millions of pounds sterling 
 should annually be collected from the people ; that each of those 
 pounds requires 5 dwts. 3 grains of gold to represent it ; and that 
 estimating the quantity of our gold currency at the utmost extent 
 (which quantity it has cost England many sacrifices, and all the 
 years since the peace to obtain) it would barely be equal to the pay-
 
 129 
 
 ment of taxes alone for the half of one year.* When these things are 
 recollected, it will appear not unlikely that a few monied individuals, 
 by employing their capitals in monopolizing the gold, may very soon 
 cause it to bear a premium in relation to notes ; and if that premium 
 were only one penny in the sovereign, it would be sufficient to make 
 the whole of that gold, which ought to be in circulation, immediately 
 become dormant, and not to be had except as a mercantile commodity, 
 which \Vould, of course, still farther enhance the premium. An univer- 
 sal run upon all the issuers of promissory notes on demand would then 
 be the immediate result ; for no one would keep a note by him, if he 
 could demand a sovereign for it, which sovereign bore a premium over 
 and above the value of the note ; and, by consequence, no banker 
 would be so unwise as to give out his promissory notes for any thing 
 besides sovereigns (and for sovereigns nobody would want them) 
 because, on the morrow, he might be required to give a sovereign 
 for each note, which sovereign it would cost him a premium to obtain. 
 With a currency thus contracted, the price of every commodity, 
 whether house, land, food, or clothing, must of necessity be propor- 
 tionally contracted. Under the present cash laws, therefore, it is not 
 only very possible that a monopoly of the currency may take place ; 
 but, when the speculative character of our countrymen, and the im- 
 mense capitals which many of them are able to command, are duly 
 considered, I apprehend that a monopoly of the currency must be 
 considered a very probable occurrence. And if a monopoly of any 
 one of the necessaries of life be an evil greatly to be deprecated, how 
 great will be the evil of a monopoly of that, to which power is given 
 to control all the necessaries and comforts of life. I am aware it 
 may be said, that when things come this pass, recourse may be had to 
 another bank restriction act. True ; but before this could be done, 
 many individuals would be ruined, and others greatly injured ; and 
 when this remedy was at length obtained, it would find, and leave us, 
 suffering under the mortification of knowing, that the experience of 
 1797 had been entirely lost upon us. The currency would again be 
 depreciated (to use the popular term) — would again require to be re- 
 stored, — and finally, would be forced to be put upon that footing, on 
 which, I humbly conceive, it is in the power of the British parliament 
 to establish it now and for all future time. 
 The evil which may be dreaded from the present cash laws, and 
 
 • The total amount of gold coined at the mint from 1760 to 1809, a period of 50 yeatS( 
 was only 66,214,774^. ; and of silver for the same period, 63,419/. But aU this gold has 
 now disappeared. Yet even this was not much more than equal to one year's taxes: 
 
 I
 
 130 
 
 which is here set forth, is, I apprehend, not properly attributable to 
 the circumstance of bank notes being payable in gold on demand, but 
 to a defect in the principle by which their payment in gold is governed. 
 The present system, instead of providing for a relation to subsist be- 
 twixt gold and bank paper, is capable, as it has been shewn, of ex- 
 cluding paper from circulation as eflfectually as gold was excluded 
 from circulation [under the bank restriction act ; and the baneful 
 operation of this defective principle would, I apprehend, be still 
 felt, though perhaps more remotely, if 51. instead of 3/. \7s. lOd. 
 per oz. were fixed as the unalterable price at which bank notes 
 should be payable in gold, or if silver were taken as the measure in- 
 stead of gold. Either of these remedies would diminish the value 
 of English money, without correcting the defect to which I have ad- 
 verted : and, therefore, effectual relief cannot be expected from either 
 of them. But as the market price of gold is now brought upon a level 
 with the mint price, it is respectfully suggested that the following 
 simple expedient might at this time be adopted, with credit to the 
 country, and advantage to the community at large, since it would per- 
 petuate the benefit of cash payments, while it would avert the evil 
 which attaches to the present system. The expedient which I propose, 
 and which I should desire to see suggested to the consideration of 
 Parliament, is — 
 
 1st. — That bank of England notes be made a legal tender for all 
 payments of the value of one pound and upwards. 
 
 2dly.' — That the bank be required to pay their notes, on demand, in 
 gold, at the market price. And in order to ascertain the market price, — 
 
 3dly. — That the bank be required to give periodical notice of the 
 price at which they would sell their notes for gold, or give gold for 
 their notes, or receive gold in payment for the various securities lying 
 in their hands. Such notice to continue in force till the stated period 
 for its renewal. 
 
 And, 4thly. — I conceive it would be found beneficial to all the par- 
 ties interested, that the present mint price should be the minimum to 
 which the market price shall at any time descend. — So that foreigners, 
 as well as Englishmen, might always calculate with certainty upon a 
 sovereign, or 5 dwts. 3 grains of standard gold, being, at least, ade- 
 quate to the payment of one pound English. 
 
 The effect of the first of these propositions, in conjunction with 
 the second, would be to preserve an unity in the character of 
 English money, so that when a contract was made between in- 
 dividuals, it might remain unaffected by foreign exchanges. For
 
 131 
 
 want of this regulation, at the commencement of the present peace, 
 numbers were ruined, almost instantaneously, themselves scarcely 
 knowing how it happened ; and for want of this regulation lat- 
 terly, capitalists have not ventured to put their money into circula- 
 tion in the way of trade, because every succeeding month, since 
 1819, has shewn them, that, owing to the gradually increasing scarcity 
 of active money, the profits of trade have not been proportionate to the 
 increased value of the money employed: — the fact being notorious, 
 that in the face of a fair demand for goods, the English prices of them 
 have been continually diminishing. 
 
 The 2d proposition, whilst it would for ever, and under all circum- 
 stances, secure to the country the power of converting paper into specie, 
 would at the same time secure us from the evil of a monopolized cur- 
 rency. 
 
 Under the terms of the 3d proposition, it may be presumed, that our 
 merchants, foreign bankers, and bullion dealers, would constitute an 
 adequate counterpoise to the privilege granted to the bank of England, 
 so as on the one hand to prevent bullion being raised above its value, 
 and on the other hand to preserve it from a depression below its value. 
 By this means, I apprehend, the same relation would be established be- 
 tween the English and foreign currency, as does already subsist between 
 English and foreign funds. And for all our domestic purposes, the pound 
 English would be represented by the one pound note ; any variation in 
 the foreign value of which, would leave its English value unaifected, 
 because the one pound note vt'ould still hold the same relation to all 
 English contracts which it did before. 
 
 By the 4th proposition, I apprehend that a comparative steadiness in 
 the European value of English money might be obtained, and the pre- 
 sent relation betwixt gold and silver be preserved, thereby tending 
 essentially to secure to us the value and possession of our silver cur- 
 rency. This proposition may be deemed the more worthy of conside- 
 ration, when it is recollected how extensively this change in our money 
 laws would supersede the necessity of employing the precious metals. 
 For by this change, the only purpose for which they would be essentially 
 required (except in small payments below the value of a pound), would 
 be that of discharging the balances of our foreign trade, and for this 
 purpose a very small portion would suffice of that large quantity, which 
 is at present obliged to lie dormant in the hands of bankers ; conse- 
 quently, a very great portion would be left upon the market ; the effect 
 of which would be like the discovery of another Peru : and but for 
 some legal protection, the tendency of this would be to depress the pre- 
 
 i2
 
 132 
 
 cious mefals, save in the time of war or famine, below Mint prices; 
 but with a legal protection to the extent of our present Mint prices, and 
 with our national credit and trade, it would, in the absence of war or 
 dearth, or some unnatural call for the export of bullion, be the interest 
 of the bank of England, and of all bankers, to pay in specie to a consi- 
 derable extent ; and tinder that protection, it could not be against the 
 interests of the community to receive it to an equal extent ; whilst any 
 tendency there might be in the precious metals to decline below Mint 
 prices, would be as well balanced by an increase in the nominal price of 
 commodities, as it could be by an increase in the weight of the sovereign. 
 By this means, the country would become naturally stored with a rich 
 and almost redundant currency, the accumulation of which would be to 
 England like well-stored granaries against the time of dearth, and a 
 most useful preparative for the calamity of war. Thus, we should have 
 an abundant, but not a depreciated currency. The landlord — the mer- 
 chant — the tradesman — the farmer — the mechanic and the labourer, 
 would all directly partake of the benefit ; and if the preamble of this 
 representation be true, the fundholder also would participate therein, 
 inasmuch as a monopoly of the currency must depress the value of all 
 public securities. Each would be able to realize a remunerating price 
 for his commodity and his labour, and yet his money might be expected 
 fully to maintain its present character for weight and purity. 
 
 Throughout this representation, I have endeavoured to keep in view 
 the probable action of that all pervading principle, self-interest: 
 First, by shewing how its individual operation, under the present laws, 
 is capable of producing the greatest inconvenience to the community at 
 large ; and, Secondly, by shewing how the present laws might at this 
 time be so corrected, as that this principle would be all that could be 
 required to put in action a system of currency, which would promote 
 the universal benefit of my fellow-countrymen. If I am permitted. Sir, 
 to obtain your sanction, and the sanction of this meeting, to the views 
 here set forth, I shall feel myself most happy in the hope that they are 
 not visionary nor impracticable. 
 
 The Address was printed and sent at the request of the 
 meeting to those gentlemen who were members of the BulUon 
 Committee, and to many other noblemen and gentlemen. 
 
 Experience, however, soon made it apparent that the author 
 was mistaken in supposing that the bank of England, and 
 bankers in general, would be aware of the risk they incurred
 
 133 
 
 by allowing their credit to supply the public with a circulating 
 medium under the existing law. They appeared not to re- 
 gard the effect likely to follow from a scarcity of bullion being 
 felt in the country, either from natural, or artificial causes. It 
 seems not to have been thought of, by the m.ajority of bankers, 
 that if the aggregate amount of credit currency, or cash de- 
 posits, payable on demand by them, were to become only five 
 or six times as great as the aggregate amount of gold coin in 
 their own coffers, or within their own immediate reach, the 
 law which required that eveiy pound note, and every cash 
 deposit should be payable, at any moment, in sovereigns, at 
 the option of the holder, must render the demand for gold 
 coin a most safe and profitable speculation to any individual, 
 or combination of individuals, who could control a few of 
 those 800 millions which constitute the national debt of 
 England. These considerations appear to have escaped the 
 observation of bankers generally, who (disregarding those fine- 
 spun theories which constitute the web by which deep and 
 subtle speculators entangle their prey) pursued the natural 
 and straight-forward course of business, giving their notes, 
 payable on demand, for bills of exchange, drafts, and promis- 
 sory notes, payable in two or three months, wherever they 
 were well satisfied that the drawers or acceptors or endorsers 
 were men who had sufficient property and credit at stake to 
 afford a reasonable security that the bills would be paid when 
 they became due ; whilst by some (and especially London 
 bankers, who are chiefly bankers for deposits) considerable 
 sums were invested in the funds, or advanced on bonds and 
 mortgages, the parties assuming that, according to the usual 
 routine of their business, they were amply supplied with such 
 an amount of assets in cash as was requisite for their occa- 
 sions. By the payment of government dividends so much 
 had been added to the amount of credit property in existence, 
 that the funds, and all the usual modes of investment, now 
 yielded too low arate of interest compared with what had been
 
 134 
 
 formerly received, to satisfy the capitalist : many, therefore, 
 whose chief pleasure it had formerly been to see their pounds, 
 shillings, and pence accumulate, began now to amuse them- 
 selves in building new houses, or otherwise expending their 
 dividends, rather than improve their fortune by such slow de- 
 grees : — this was one mode in which credit property assumed 
 the character of credit currency. Merchants and such private 
 gentlemen as had acquired wealth in trade and commerce, 
 weary of getting little or no interest for their money, began, 
 some of them, to turn their attention to the purchase of pro- 
 duce, or of manufactured goods ; and by thus applying their 
 funds to the taking up the surplus stocks of the manufacturer 
 and ordinary factors, opened a space for a fresh supply, and 
 gave a little improvement to prices : a movement once created, 
 all persons connected with trade or commerce, at home or 
 abroad, gradually became less diffident of keeping a larger 
 stock in their stores, whilst contemporaneously with eveiy 
 movement of goods from the manufacturer was his receipt of 
 bank-notes, or bills of exchange, or something in the character 
 of money to represent those goods. Thus, another portion of 
 credit property assumed the character of credit currency. 
 Every addition to the circulating medium furnished the work- 
 ing people with the means of purchasing the necessaries of 
 life more freely, and supplied those who sold the necessaries 
 of life with the means of again purchasing the produce of the 
 labour of those very work-people. 
 
 But to represent an increasing quantity of goods and a greater 
 number of business transactions, requires a continued and 
 systematic increase in the quantity of money, or of that which 
 has the credit of money attached to it ; and it is not possible, 
 in the nature of things, for gold or silver to accomplish those 
 ends. 
 
 To meet such exigencies, it would require that every work- 
 man, when he was unable to obtain from his usual employ- 
 ment of tillage or manufacture, so much gold or silver in ex-
 
 135 
 
 change for that labour, as previously would enable him to 
 purchase the various articles necessary for his own support, 
 should have the means of going at once to the gold and 
 silver mines, in order to extract such a portion of those metals 
 as would ensure them to him. But as this could never be the 
 case in this country, and if it could, would soon render gold 
 and silver so plentiful, as to be more worthless than stones, 
 the means of obtaining a money representative for a larger 
 aggregate quantity of food and clothing, houses, pictures, 
 books, and all the other thino;s which constitute either the 
 necessaries or luxuries of life, and, at the same time, of sus- 
 taining their specific value, must be sought for in some other 
 medium different from that of gold or silver. 
 
 That medium which the precious metals could not supply, 
 was provided by the credit of the bank of England, and of 
 local bankers. The public regarded not how the currency was 
 provided. — All that they knew or cared about it was, that it 
 answered the purpose of a circulating medium, and in propor- 
 tion as they found less difficulty in getting it, in like propor- 
 tion they were less scrupulous about expending it. The la- 
 bour of every one by degrees found a ready employment — 
 rents and taxes became well paid. By the instrumentality of 
 this credit currency, adequate means were provided for circu- 
 lating a largely increased quantity of goods and produce, and 
 of sustaining prices at a remunerating rate. 
 
 When the national stock of food and clothing, and all the 
 more immediate necessaries of life had become full almost to 
 excess, then capital and labour began to seek a new direction 
 in providing conveniencies and luxuries for mankind. Works 
 were accomplished that never could have been thought of, if 
 the multiplication of the first necessaries of life (which the in- 
 troduction of machinery had created, and the credit currency 
 had sustained) had not been such as to admit of great num- 
 bers of labourers being clothed and fed during the time 
 their labour was so largely diverted from its usual channel.
 
 136 
 
 The combination of capital in joint stock, companies provided 
 a large field for the employment of those whose services in 
 other things had been superseded by machinery. By the 
 united employment of the skill of one class, the capital of 
 another, and the labour of a third, mountains were brought 
 low, and valleys raised, new roads made, and old ones 
 improved ; the darkness of night yielded to the brilliancy 
 of artificial light, not only in great cities, but even in many 
 minor towns ; and canals, railways, piers, bridges, and 
 other public works, were projected and executed, of a cha- 
 racter for magnificence surpassing any thing which had 
 been wrought by the credit system during the war. Ma- 
 chinery was so rapidly improving, that we seemed to be in a 
 fair way of having clothes made without hands, and food pro- 
 vided without labour, and the time appeared to be fast ap- 
 proaching when, in fulfilment of the anticipations of Sir W. 
 Petty, England might rest from her great industry, and her 
 people have nothing to do but to employ themselves " in ra- 
 tiocinations upon the works and will of God, to be supported 
 not only by the indolency, but also by the pleasure of the 
 body ; and not only by the tranquillity, but serenity of the 
 mind." In the plenitude of this apparent prosperity, the 
 chancellor of the exchequer (the last person, one would think, 
 in England, tobe under apprehensions from the abundance of 
 money) began seriously to perplex himself how he was to dis- 
 charge his duties over a people about to be inducted into a 
 state of so great felicity. 
 
 The author of the preceding address was himself tempted to 
 hope that his own predictions might be falsified. At all events, 
 so convinced was he that a simple and speedy remedy was 
 within the reach of government, whenever the predicted evil 
 should begin to manifest itself, that he could scarcely be per- 
 suaded of the fact, that the bank directors would have suf- 
 fered the credit system to expand so much, or the chancellor 
 of the exchequer have expressed such confident hopes of the
 
 137 
 
 permanency of this national prosperity, had not government 
 been conscious of a remedy, and ready to adopt it whenever 
 the market price of bullion should so exceed the mint price, 
 as to cause the bank to be drained of bullion to any consider- 
 able amount. 
 
 But these golden visions were destined to be of very short 
 duration. By some means or other gold began to be in re- 
 quest in the early part of 1825. At first it was thought to be 
 the mere natural overflowings of the prosperity of England, 
 by which the circle of happiness might be so extended as to 
 include in its scope the neighbouring nations. The foreign 
 demand for gold, however, continued, until at length the fo- 
 reign value of a pound sterling in a sovereign exceeded the 
 foreign value of a pound sterling in bank notes or bills of ex- 
 change. It then became a profitable mercantile transaction to 
 take bank notes to the bank of England, and get sovereigns 
 for them, and to take those sovereigns to France, where the 
 merchant could purchase bank notes and other English paper 
 of the highest credit, at a discount, which notes, being brought 
 to England, were converted into gold, which was again 
 sent out. To check this state of things (for it now appeared 
 that the government had left the bank and the people to ma- 
 nage their own concerns), the directors were obliged to with- 
 draw their notes from the market, by secretly negociating 
 exchequer bills. Had they not done this, that establishment 
 must have been compelled to stop payment, and then, great as 
 the evils were which the nation experienced, incalculably 
 greater must have been felt. But in withdrawing their notes 
 from the market, so scanty a supply was left, that it was 
 utterly impossible for it to represent the current transactions 
 of the day. Those who were under money liabilities were 
 obliged to make immediately vast sacrifices of property to 
 preserve their credit. Many bankers and merchants of large 
 property, but who had not that which was immediately avail- 
 able, were compelled to suspend payment. Their stoppage
 
 138 
 
 involved the manufacturing districts in distress. Bills were 
 dishonoured and returned : to meet these, the manufacturer 
 was obliged to make enormous deductions on the sale of 
 goods, which being forced into the market in great abundance, 
 established a market price for them far below cost, and in- 
 deed lower than had been experienced in either of the preced- 
 ing commercial convulsions ; namely, that which had attended 
 the termination of the war, and the one which followed the 
 enactment of July 1819. 
 
 Such were the first consequences arising from that principle 
 being freely acted upon, which gave to the holder of English 
 credit a right to demand, under all circumstances, a sovereign 
 weighing five pennyweights and three grains of standard gold 
 for every pound note, and for every pound in account. And 
 here it may be proper to offer a remark upon the mode by 
 which these calamitous consequences would have been averted, 
 if a system of cash payments upon the principle proposed in 
 the Address, page 128, had been in existence. An export of 
 bullion might still have taken place. It ought to have done 
 so, and no doubt would, whenever the low price of labour in 
 any of the neighbouring countries should have been found 
 somewhat more than a counterbalance for the superior me- 
 chanical powers, and other natural or commercial advantages 
 possessed by England ; but then, as the import of bullion into 
 that country would tend, in some degree, to raise prices there, 
 and the export of bullion from England would also tend to the 
 reduction of English prices, so it is probable that, long before 
 the bank had parted with half a million of its bullion, the 
 prices of the two countries would have been brought to an 
 adjustment, without the great bulk of the people knowing 
 aught of the derangement. 
 
 But for the sake of putting the case in the strongest light, let 
 it be granted that a commercial speculation in gold had taken 
 place, and that the bank of England had parted with six 
 or eight millions of gold at the current mint price, before the
 
 139 
 
 directors had opened their eyes to the evil — that they had suf- 
 fered the resources of that estabhshment to become so low, as 
 to compel themselves to give twenty shillings and threepence 
 in bank notes for a sovereign — yet, even then, all that would 
 have been necessary for them to do, would have been, to give 
 notice to the public, that twenty shillings and threepence 
 was the price at which they would take or give sovereigns for 
 notes ; and the value of the sovereign in relation to English 
 bills being thus made equal in England to what it was abroad, 
 the inducement to export gold would at once have been taken 
 away. This mode of checking the export of bullion would 
 have been attended with some loss to the bank of England, 
 because, whilst the sovereign was estimated at twenty shil- 
 lings and threepence (which would be until the stock of gold 
 in England had become sufficiently replenished), the bank 
 would be subjected to the loss of threepence in the pound in 
 the metallic or foreign value of all their government dividends, 
 and upon any excess there might be in their receipts over 
 their payments. But as this loss, whatever it might be, 
 would fairly be attributable to the want of timely precaution 
 on the part of the bank, so it would have been right that the 
 loss should fall primarily and chiefly upon that establishment. 
 The bank, however, being then relieved from the liability to 
 buy sovereigns at twenty shillings and threepence, and to pay 
 them on demand for twenty shillings, would have had no ne- 
 cessity to cease the issue of their notes in the discount of good 
 bills as usual, or forcibly to contract the amount of their notes 
 in circulation by the sale of exchequer bills, as their notes 
 woidd then only have been wanted for the legitimate purposes 
 of the home circulation, and not as an instrument by which 
 the private speculator could make profit at the expense of the 
 bank. Thus a temporary loss on the part of the bank, of one 
 and a quarter per cent, upon the balance of their current re- 
 ceipts over their current payments, would have checked the 
 export of bullion, and bank notes would have supplied the
 
 140 
 
 place of it, until, in the regular course of commercial transac- 
 tions, gold was again brought within the mint price ; even 
 supposing the extreme case, that an extraordinary export of 
 it had taken place before the bank directors were aware. In 
 the natural course of commerce, however, an extraordinary 
 export of the metals never could suddenly take place ; and 
 though, in the unnatural process of speculation, such a design 
 might for the moment be entertained, yet the inducement to 
 adopt it would immediately be taken away, when it was seen 
 that the object of the speculation might be so easily thwarted. 
 
 When the first rush of the calamities was passed, a death- 
 like chill prevailed over the commercial classes in England. 
 The attention of every one was directed to the meeting of par- 
 liament, in hopes that something would be devised by the 
 government, to mitigate that mischief which had broken out 
 like an earthquake in England, and was now extending itself 
 into every part of the commercial world. 
 
 Parliament met in February 1826: but the measures then 
 brought forward, and the arguments advanced, were such as 
 presently convinced the thinking part of the community, 
 whose wits were sharpened by coming in closer contact with 
 the evil, that all expectations of relief from that quarter were 
 in vain. The same wisdom which had traced the distress of 
 1821 and 1822 to the superabundance of food (not perceiving 
 that over-stocked markets might be occasioned as much by 
 the dearth of money, as by the want of consumers), now attri- 
 buted the national distress to an excess of manufactured goods. 
 When an advance by exchequer bills to merchants and com- 
 mercial men, on the deposits of goods, was proposed to minis- 
 ters, it was alleged that merchants and manufacturers had 
 only themselves to blame for what was called over-manufac- 
 turing and over-trading, and that his Majesty's ministers 
 would leave them to their fate. Yet, preposterous as it may 
 seem, before the following winter, ministers found it necessary 
 to send old army-clothing to cover the nakedness of those
 
 141 
 
 very people whose powers of producing clothing it was alleged 
 had overstocked all the world. And when public charity was 
 appealed to in churches and chapels, in behalf of these dis- 
 tressed manufacturers, we were told, on the authority of go- 
 vernment, of places containing two hundred families, in the 
 heart of the manufacturing districts, where they had only 
 four entire blankets among them. 
 
 If parliament could not mend the condition of the commer- 
 cial world, few were prepared to expect from that quarter any 
 measures that would render it worse. Yet this seemed to be 
 the effect of certain resolutions which were at that time pro- 
 posed and adopted. For some reasons, a notion prevailed in 
 parliament, that bankers might be allowed to exercise their 
 own discretion in issuing to any amount notes of the value of 
 five pounds and upwards, but that it was wrong to leave 
 them to their own discretion in the issue of one and two pound 
 notes. The absolute suppression of all the small local notes 
 in three years, and the immediate suspension of the issue of 
 any more stamps for such as might be issued in the mean 
 time, were in consequence among the first measures which 
 were introduced by the government, and sanctioned by a ma- 
 jority in parliament. In vain was it urged that inquiry ought 
 to precede the adoption of this measure. The same radical 
 mode of reasoning which, a few years before, would have pre- 
 vented the poor from being starved to death by the abrogation 
 of the poor laws, in hopes of preventing poor people from be- 
 ing born, seemed to dictate this measure with respect to the 
 local currency. Some country bankers had failed — some 
 poor people might perchance have a one pound note — this was 
 a great hardship, but this would not have happened, if there 
 had been no one pound notes ; and, therefore, to prevent the fu- 
 ture production of such tares, it was resolved that the whole 
 crop, good and bad, should be grubbed up without further cere- 
 mony. Ministers, in the first instance, would not hear of any 
 exception of the bank of England one and two pound notes ;
 
 142 
 
 but a few days' reflection caused them to change their minds 
 in this respect. Epithets, too, were appUed to the country 
 bankers (as if they had been the only bankers that had failed) 
 calculated to excite unreasonable prejudices in the minds of 
 the people, by those who, though high in rank, appear to have 
 been ignorant of the degree in which wages depended upon 
 this local currency, and how far better it was for the people 
 to have work, and a country bank note in payment of their 
 wages, for which they would get the necessaries of life) even 
 if, perchance, one in twenty should occasionally lose eight or 
 ten shillings on a pound note by the failure of a bank) than 
 that they should hear of " a golden stream irrigating the base 
 of mountains of paper," of which stream, for want of employ- 
 ment, these poor working people could not taste. 
 
 The immediate effect of this measure, with respect to coun- 
 try bankers, was, that a second run took place upon many, 
 subjecting some to additional sacrifices in order to meet the 
 exigency, and producing the stoppage of others. Bankers 
 now felt their insecurity to be such, from the measures adopt- 
 ed towards them, that in many instances they prudently re- 
 fused to let their promissory notes go out of their hands, so 
 that, in some large manufacturing towns, bills of the highest 
 respectability could not be converted into small change, the 
 usual course of doing it by local notes being checked ; and 
 to keep a dead stock of gold or bank notes to discount bills 
 with, was nobody's business, especially as from the depressed 
 state of the funds, no one could sell out for that purpose with- 
 out a loss too great to be covered by the profit of occasional 
 discounts : so that those manufacturers or traders who had a 
 regular country connection in business, and who had bills of 
 exchange of first-rate respectability in hand, found themselves 
 impeded and subjected to increased expense in the payment 
 of their work-people ; whilst manufacturers' bills representing 
 goods sold to the merchants, and bearing the merchant's ac- 
 ceptance, were quite rendered dormant until they became due,
 
 143 
 
 and the labour, which otherwise might have been employed, 
 was lying dormant also. As the poor work-people could not 
 let their appetites lie dormant, they were reduced to the 
 necessity of pawning their little stock of furniture, &c. for 
 a subsistence. 
 
 Some bankers, who had calculated upon the credit system 
 being secure from the further intervention of parliament, at 
 least until 1833, reckoning upon the preponderance of their 
 resources over their probable demands, had made considerable 
 advances to manufacturers, who, after spending considerable 
 property in the construction of mills and machinery, had 
 found it necessary to avail themselves of a temporary ac- 
 commodation from the banker, to complete and to work their 
 establishments. Whatever imprudence may be charged upon 
 the manufacturer and the banker in these cases, it was a gra- 
 tuitous cruelty to render their difficulties greater by a sudden 
 departure from a system, to the continuance of which, those 
 bankers had been led to conceive the honour of parliament 
 was pledged. Now, however, new mills, filled with the 
 most improved machinery, and ready for carrying on trade, 
 calculated, under an equitable money system, still further 
 to conduce to the prosperity of England, were forced upon 
 the market for sale, when from the contraction of the 
 means of working them, the vendors were glad to get one- 
 third, or even one-tenth, of the cost price ; so that after the 
 manufacturer had sacrificed every thing, so great a loss was 
 still inflicted upon the banker, as in some instances to cause 
 his ruin. The insolvency of the banker may be assumed from 
 his stoppage ; but the injudicious measures of parliament were, 
 in some instances, the cause of that insolvency. A stronger 
 proof that the course which parliament had taken with respect 
 to the local currency of England was injudicious, cannot be 
 adduced, than the fact, that when the same principle was 
 about to be extended to Scotland, the Scotch felt their welfare 
 so much endangered, that their clamour for an enquiry was
 
 144 
 
 irresistible, and the result of the enquiry was such that par- 
 liament were constrained to admit, that a system of small- 
 note currency, which they had taken for granted was poison 
 for England, was food for Scotland. 
 
 Another mode in which parliament increased, rather than 
 diminished, the existing distresses of the country, was in their 
 proceedings relative to joint stock companies. Unfortunately 
 much misapprehension existed in parliament concerning the 
 nature and origin of those companies. In consequence of this, 
 the benefit which might have been derived from them by go- 
 vernment and the working classes was quite lost sight of ; and, 
 instead of leaving people to manage their private affairs for 
 themselves, the whole attention of parliament was taken up 
 with efforts to prevent men from laying out their money in 
 unprofitable speculations. 
 
 Joint stock companies had their origin in the accumulation 
 of credit property, arising principally from the continual ad- 
 ditions made to it by the half-yearly payments of government 
 dividends. It has been already shown, that prior to the ex- 
 istence of a credit currency, it was morally impossible that 
 any government should be able, for long together, to pay even 
 the interest of a nationzd debt, but that by the introduction of 
 credit currency, accompanied by grants of taxes, and by the 
 exchequer bill and funding systems, means were provided 
 for an almost unlimited payment of interest. Whilst the war 
 continued, the government itself was the head, as it were, of 
 an immense joint stock company, re-borrowing the interest of 
 the loans as fast as it was paid. The object of this company 
 was to clothe and feed our own soldiers, and those of our 
 allies, whilst they were employed in defending Europe, first, 
 against the anarchy and frenzy which attended the French 
 revolution, and afterwards against the ambitious views and 
 arbitrary control of Buonaparte. The credit currency all 
 this while formed the medium by which the manufacturer and 
 farmer received an acknowledgement for their cloth, corn, &c..
 
 145 
 
 •and through which they again paid their landlords' rent, their 
 workmen's wages, and the government taxes. The accumu- 
 lations of the national debt constituted the profits of the pro- 
 prietors of this joint stock company. 
 
 When the war ceased, the further operations of this com- 
 pany were of course suspended ; and those dividends which the 
 proprietors had been accustomed to re-lend to government, 
 were now without employment ; for it was obviously of no use to 
 accumulate bank notes, or to suffer the dividends to remain 
 long together in the banker's hands at little or no interest ; 
 and after the reduction of the 5 per cents, it was found worse 
 than useless to expend the dividends in the mere enhancement 
 of the nominal value of funds. In the end, these accumu- 
 lations of credit property caused companies to be formed, some 
 for lending money to neighbouring nations, others for in- 
 creasing the stock of gold and silver by working the mines 
 of foreign countries, and some again, for public works* of 
 ornament or utility in our own country ; thus calling into 
 action the enterprize, skill, and labour of a great many people. 
 But it unfortunately happened that here also " the enemy 
 sowed some tares among the wheat." The projection of some 
 joint stock companies justified a suspicion that they were de- 
 signed to be rather a vehicle for cheating the subscribers than 
 for attaining any useful or profitable end. In these cases it 
 would, doubtless, have been desirable to have devised laws for 
 punishing the guilty as soon as their criminality was apparent ; 
 but instead of this, many gentlemen in parliament took the 
 more radical course of exerting their influence to check the 
 formation of joint stock companies altogether, and to repress 
 those already formed ; and from what was then said and done 
 in and by parliament, many great designs were suppressed, 
 the execution of which would have given employment and 
 food to numbers of people, and when completed, would have 
 been of permanent national benefit. In 1816, when work was 
 greatly wanted, benevolent individuals were ready to employ
 
 146 
 
 poor people in digging holes, and filling them up again, rather 
 than they should be deprived either of food or work. In the 
 beginning of 1818, government was empowered to borrow, as 
 was before observed, a million of money for the building of 
 churches in new places. It was made no objection to these 
 things that they would not yield any pecuniary profit, or 
 rather, that in the latter case, as an additional number of 
 churches would require an additional number of clergymen, 
 such undertakings would constitute a continual increase of 
 charge. But now, when a company was to be formed for 
 working mines, or for making a canal, or a railway, or for 
 lighting towns with gas, the subscribers were deemed incom- 
 petent to judge of the proper objects for an investment of 
 their own money, and such legal obstructions were thrown in 
 the way as should deprive people of the opportunity of uniting 
 their capital, and the poor of the benefit of being employed. 
 
 It was alleged that many people of limited means had been 
 induced to join in these concerns ; that the original projectors, 
 in some cases, had taken advantage of the credulity of the 
 more simple ; and that the skilful and crafty had realized large 
 profit for themselves, and left others to bear the loss. But 
 unfortunately these things had already taken place before par- 
 liamentary men, in their public capacity, knew any thing of 
 it, and the simplest people had themselves become wise 
 enough to be on their guard. For parliament, therefore, to 
 interfere in this stage of the business, was so far from being a 
 kindness to these simple folks, that it merely operated to 
 make their case more deplorable. It was worse than shutting 
 the stable-door after the horse was stolen ; it was stopping the 
 way against his return. If, during the war, when the fund 
 proprietors had advanced one or two hundred millions to the 
 government, ministers had come forward in parliament and 
 said to those proprietors, just after they had cleared the loan 
 contractors of their omnium, " You have done a very unwise 
 thing; you evidently knew not how to take care of your
 
 147 
 
 money ; all this money which you have advanced, or promised 
 to advance, is already expended or condemned for expenditure 
 in distant countries without as yet the least prospect of a pro- 
 fitable return, or any return at all. It is true that the loan 
 contractors were very wicked to cheat you into the speculation, 
 and we lament there is no law to punish them ; but as a kind- 
 ness to you, and to make you more wise in future, we are re- 
 solved to do all we can to make your government annuities 
 fail, and then nobody will buy your annuities from you, ex- 
 cept those, who like the loan contractors, knowing the mystery 
 of money, know how to manage the government:" — this, it is 
 obvious, would have been very preposterous conduct on the 
 part of ministers ; and yet, amongst all the joint stock com- 
 panies established during the late mania, it would be difficult 
 to find one that gave a less prospect of profit than the joint 
 stock company of the funds afforded, when Mr. Pitt, in order 
 to support it, had recourse to the bank restriction act. 
 Although Mr. Pitt and the ministry did not address such ar- 
 guments as these to the people in 1796 and 97, Mr. Thomas 
 Paine, and those of his school of finance did, and got them- 
 selves stigmatized as jacobins and rebels for it. Now, how- 
 ever, when the success which has attended the funding joint 
 stock company might be appealed to in proof of the profit to 
 be derived from the combination of capital, even for the mere 
 purpose of feeding and clothing soldiers whilst they were 
 fighting with other men, the professed followers of Mr. Pitt 
 seem to have discovered that the philosophers of Mr. Paine's 
 school were right ; and that even to suffer men to combine 
 capital for the feeding and clothing of labourers whilst em- 
 ployed in works which were, or professed to be, works of 
 public utility, as well as of private profit, was so pregnant with 
 evil, that it was a question, with some of them, whether the 
 whole of the national distress then felt might not be attributed 
 to this cause. 
 
 Mercantile men, perceiving how little chance of relief there 
 
 K 2
 
 148 
 
 was from aught that government was disposed to do, were 
 compelled to have recourse to the ruinous expedient of con- 
 signing manufactured goods and colonial produce to foreign 
 merchants, who, as an inducement to supply an advance 
 in cash upon them, were empowered to sell the goods, &c., 
 at their option, for what they would fetch. By this pawn- 
 broking system the exchange was forcibly turned in favour 
 of England, but no turn was given to the tide of distress, 
 which was overwhelming in succession all classes of people : 
 on the contrary, the scarcity of money which this system 
 created abroad, compelled merchants there to force the sale 
 of the goods consigned to them, and so to depress prices still 
 lower ; and every fresh depression in price spread further ruin 
 in England. 
 
 The following extract from the Times paper of April 25th, 
 1826, under the head of the money market, gives a lamentable 
 picture of the prospect which mercantile men had to encounter; 
 and subsequent experience has, unhappily, fully corroborated 
 the correctness of the anticipation. — 
 
 From the City. — April 25, 1826. 
 " The accounts of yesterday from the north of Germany are curious, 
 from the light they throw on the nature of the business with that part 
 of Europe which is at present carried on by English merchants. To 
 escape from the consequences of that depression which has so long con- 
 tinued in colonial produce, and which rendered sales in London not 
 only injurious but extremely difficult to be accomplished at all, appli- 
 cations have been made to foreign houses to allow consignments to them, 
 in the hope of obtaining a better return for the merchandize in Antwerp, 
 Hamburgh, and other places. This the foreign merchant has been wil- 
 ling enough in general to consent to, but not without receiving full per- 
 mission to bring his consignments to market at his own pleasure, that 
 he might be secure at least to the extent of his advances upon them. 
 Business of this description, in the glutted state of the English market, 
 having once found an opening, began to increase to a far greater extent 
 than the foreign markets could provide for, and they have consequently 
 been reduced to the same or to a worse condition. To whatever point, 
 therefore, the merchant has directed his views, he has encountered of
 
 149 
 
 late nothing but disappointments and losses. A little reflection on this 
 state of things will also perhaps serve to explain the catises which have 
 brought about a state of the foreign exchanges so favourable to this 
 country ; and how fallacious any general reasoning founded on them 
 must be, to prove that our foreign trade is in a prosperous situation. 
 Low as the markets have fallen, England in fact can neither export nor 
 import without loss." 
 
 The sufferings of the winter of 1826 are too notorious, 
 and must be too fresh in every one's memory who takes any 
 interest in the welfare of mankind, to need any further notice 
 of them than the allusions already made, and a reference to 
 the reports which by the orders of government were then 
 addressed to us in our parish churches, to arouse our sym- 
 pathy for the distressed manfacturers. The low ebb to 
 which the farming interest is again reduced, and the increase 
 of crime in the agricultural counties, bear melancholy proof 
 to the fact, that the agriculturist has not escaped his share 
 of the distress ; and the perplexity which in the course of 
 the last two years has clouded the minds and destroyed the 
 health of those high in his Majesty's councils, may serve to 
 shew, that as with the natural so with the political body, 
 one class in society, however mean it may be, cannot suffer 
 long without the whole frame being injured by it. 
 
 A judicious remark was made about 200 years ago by Mr. 
 Greaves, a writer on money, that " if those advantages 
 which one country may make upon another in the mystery 
 of exchanges and valuation of coins be not thoroughly dis- 
 covered and prevented by such as sit at the helm of the state, 
 it may fare with them after much commerce as with some 
 bodies after much food, that instead of growing full and fat, 
 they may pine away and fall into irrecoverable consumption." 
 Since the termination of the late war, England has three suc- 
 cessive times proved herself to be on the verge of that kind of 
 consumption ; and it is discouraging to reflect that this expe-
 
 150 
 
 rience has failed hitherto to make those who govern the state 
 open their eyes to the real cause of the disease. 
 
 At this present time. May 1828, so far below its natural 
 value is raw produce and manufacturing labour, that the 
 writer of these remarks conceives it is profitable for great ca- 
 pitalists, who rule the market first for one article and then 
 for another, to invest their credit capital in goods rather than 
 in preparations for cash speculations ; and that it is therefore 
 possible a temporary prosperity may again gleam upon the 
 manufacturing districts, and perhaps in the end bestow a 
 ray of hope upon the agriculturists. But of this he is quite 
 assured, that under the existing money laws, it is quite im- 
 possible for English labour generally to obtain wages ade- 
 quate to English payments without rendering a bullion spe- 
 culation profitable, and so bringing about a recurrence of 
 evils as great as those which England has recently expe- 
 rienced, if not greater. 
 
 CONCLUSION. 
 
 The pernicious tendency of that principle of political 
 economy which invests one species of property (gold or silver 
 for instance) with the prerogative of determining the value 
 of all other property, is manifested throughout the preceding 
 narrative. This principle, it has been seen, was no sooner 
 sanctioned by the king of England in the collection of his 
 revenue, than the shrewder part of his subjects began to dis- 
 cover, that the surest way to get wealth was to accumulate 
 that particular species of property which was then endowed 
 with supreme authority over all the rest. This was done 
 sometimes by the king and sometimes by his subjects, but 
 always by the Jews. Thus was private interest always op-
 
 151 
 
 posed, and oftentimes successfully, to the public weal ; which, 
 as Lord Bacon states in our motto, requires " that the monies 
 of the state should be prevented from being gathered into 
 few hands : for otherwise a state may have a good stock and 
 yet starve." In defiance of all laws this mischief was con- 
 tinually at work, directly or indirectly producing famine, 
 pestilence, sanguinary executions, oppression, and rebellions. 
 It constituted that monster which queen Elizabeth boasted 
 she had annihilated ; but in which assertion her subsequent 
 experience shews she was mistaken. Indeed she only at- 
 tempted to destroy one of the heads of the Hydra, consist- 
 ing of that class of people who clipped and counterfeited the 
 coin, for the monopolizer of it had her commendations. But 
 if the absolute money system in earlier times was thus de- 
 structive of the peace and welfare of the people, in our own 
 it has received a character which renders it, if possible, still 
 more pernicious; — for whilst the circulating medium is per- 
 mitted to have almost all the expansion which credit can 
 give, it is also liable by the bill of 1819, to be suddenly con- 
 tracted within metallic limits. 
 
 Under the control of this system, both late and present 
 experience amply proves, that the power and property of 
 England are ahke liable to be sacrificed, whenever it may 
 seem conducive to the private interests of a few buUionists 
 to produce such an effect; — or whenever it may suit the 
 political purposes of any rival state, which has credit enough 
 to borrow so large a loan at one time, as, under the manage- 
 ment of a shrewd financier, might drain the bank of Eng- 
 land of a few millions of its gold. Under the contracting inr 
 fluence of this defective money system, facts have arisen, 
 which give an appearance of truth to the arguments of those 
 who have attempted to prove, that in order to relieve Eng- 
 land from its distress a large portion of her cultivated soil 
 should be restored to a state of barrenness — her mechanical 
 operations checked — her spirit for commercial enterprize
 
 152 
 
 restricted — her able-bodied artisans sent to distant countries, 
 and the reproduction of labourers checked by abolishing the 
 poor laws. Happily no facts can prove that which it is im- 
 possible to prove, viz. that consumers may be too numerous 
 for the production, and the production at the same time 
 too great for the consumers : though facts may prove, that 
 the ox which treads out the corn may be starved to death in 
 the midst of plenty, if due care be taken to muzzle him; and 
 that workmen maybe unclad and unfed, though their labours 
 have filled our warehouses and stores to excess, if there be 
 not a means devised by which their further labour may be 
 made available to their employer, and to those to whom the 
 employer is under money liabilities. When expedients are 
 cherished in theory, which would go to reduce the people and 
 the commodities of England, in a degree so as to suit them 
 to this pecuniary money system, and the governors of our 
 country are ready to adopt such expedients rather than take 
 measures to enlarge the medium of exchange, we are con- 
 strained to admit that England is brought under the curse of 
 Babylon, and that so far as the advocates of our present 
 system are concerned, the happiness and prosperity of her 
 people are esteemed to be less precious than the golden wedge 
 of Ophir. 
 
 Others there are who suppose our national distress might 
 be cured, not by contracting the numbers of the people, and 
 their means of subsistence, but by a great and general re- 
 duction in the rents of land, &c. This, at first sight, appears 
 feasible enough ; but let any one ask himself what must be 
 the result, supposing rents were universally reduced to one- 
 half what they now are, and that the landowners, now in re- 
 ceipt of 100,000/. per annum, were at once brought down to 
 50,000/., and every smaller freeholder in proportion. It can- 
 not require a second thought to discover, that the immediate 
 effect of this must be, to cause one-half the servants, labourers, 
 mechanics, tradesmen, Sic, employed by the landed proprie-
 
 153 
 
 tors, to be dismissed, or that their wages and payments must 
 be reduced to one-half what they now are ; as it is plainly im- 
 possible that the landed proprietor could continue to pay two 
 pounds, when he was himself only in receipt of one pound. 
 If one-half of the labourers, &c. were dismissed, in order to 
 keep up the wages of the other half, those who were so dis- 
 missed must seek for some new employment, and thus become 
 competitors with those who are already so numerous as to be 
 perplexed to find a profitable employment. If, on the other 
 hand, a landed proprietor retained the whole of his establish- 
 ment, allowing to each member of it the half of his former 
 wages or payments, then the farmer and manufacturer must 
 also be content to receive half prices in their turn ; so that, 
 in either case, however the scale might be altered, the rela- 
 tive proportion of income of each to the other would only be 
 the same as it is at present. But carry the argument one 
 step further, and suppose the fundholder and the government 
 annuitant or pensioner to retain their present nominal income, 
 whilst the landed proprietor, and those immediately depen- 
 dent upon him, are reduced fifty per cent., and it will imme- 
 diately appear, that those dependent upon the landed interest 
 would be infinitely worse off by the reduction of rents than 
 they now are. And if it were possible to reduce the fund- 
 holder, in like proportion to the landholder, the relative con- 
 dition of one to the other would only then be just as it is at pre- 
 sent, without any alteration. Therefore, however a reduction of 
 rents may, in many cases, be justly due to the tenant, in or- 
 der to equalize betwixt him and his landlord the burthens 
 which are at present felt by the landed interest in common 
 with the commercial ; it is clearly in vain to look for any na- 
 tiotial veWef from, a general reduction of rents. 
 
 A few others have taken altogether a different view of the 
 subject. They are disposed to regard money as an article 
 made for the service of man, and not man for the service of 
 money. These think they perceive that the population has
 
 154 
 
 failed to be duly provided for, not because of the actual ab- 
 sence of food and clothing, (for it was apparent that whilst 
 one part of the people was suffering for the want of both these 
 necessaries of life, the farmer and the manufacturer were suf- 
 fering for want of customers to buy them), but because of the 
 absence of an adequate circulating medium, sufficing the ge- 
 neral demand for it. Three times since the peace, it has hap- 
 pened that the circulating medium no sooner found the means 
 of expansion, than the lower classes of the people found 
 abundance of food and clothing, and the farmer and manu- 
 facturer plenty of customers. This was remarkably the case 
 in the removal of the distress which preceded the prosperity 
 of 1824 and 1825. 
 
 Amongst those who have taken this last view, various ex- 
 pedients have been suggested for removing the national dis- I 
 tress by enlarging the circulating medium. One proposed 
 that the specific weight of the sovereign should be reduced. 
 Another has recommended the adoption of a silver as well as a 
 gold standard. A third advises the general introduction of the 
 Scotch banking system. A fourth recommends the issue of a 
 paper currency directly from the treasury. But, however 
 well intended all these expedients may have been, they all 
 fail to reach the root of the mischief. 
 
 The preceding narrative shews, that to reduce the specific 
 weight of that piece of coin which is authorized by law to re- 
 present the pound sterling, is but, as it were, to offer a pre- 
 mium to tempt the monopolizer of the metal in a shcwt time 
 to repeat his speculation. 
 
 Experience has also repeatedly shewn, that it is impossible 
 to make a specific weight of gold and of silver, at one and the 
 same, time the absolute representative of the pound sterling, 
 without affording to the dealers in those articles an opportu- 
 nity of making private profit at the public cost, merely by 
 their withholding sometimes one and sometimes the other 
 from the market. Besides, it carries a contradiction upon the
 
 155 
 
 face of it, to suppose that two articles can, at the same time, 
 be made a standard for valuing each other' — the standard, in 
 such a case, if standard it can be called, must be some ima- 
 ginary point betwixt the two; which, unless it has some 
 visible representative, as a bank note for instance, must 
 remain undiscovered ; and if it has a visible representative, 
 then is that bank note, or whatever it be, the standard, and 
 the gold and silver are only measured by it. 
 
 The Scotch banking system is not sufficient to protect it- 
 self from the power of the gold monopolizer under the existing 
 cash law. This opinion would have received a dreadful cor- 
 roboration, if the bank of England had not, in the recent 
 panic, stood betwixt the credit currency of the kingdom, and 
 the trader in gold. After the bank had checked the export of 
 gold, then the credit of that establishment stood in the place 
 of gold to all other bankers, the Scotch bankers amongst the 
 rest, and saved them. Some of the advocates of the Scotch 
 system have lately recommended that the capital of the bank 
 of England should be rendered less, in order to admit of a 
 freer competition with it, on the part of other joint stock 
 banking companies ; but, notwithstanding the immense 
 amount of their capital, and the strength of their credit, we 
 have had it stated in parliament, on good authority, that the 
 nation was, during the panic, within a step of being reduced 
 to a barter system, which declaration was understood to im- 
 ply that the resources of the bank were, at the time, nearly 
 exhausted. If so, it does not seem that the amount of their 
 capital was too great, neither is it easy to see how it should 
 be. 
 
 The fourth measure, viz. the issue of a paper currency 
 directly from the treasury, must always be open to the same 
 objection as the French assignats were ; and the fate of them, 
 it is to be hoped, will preserve us from the adoption of that 
 suggestion.
 
 156 
 
 But none of these expedients, if they were in themselves 
 eligible, could be of permanent use, from their utter inability 
 to counteract the machinations of those large capitalists who 
 derive profit from monopolizing the material of money. 
 
 The author conceives that a plan similar to that which has 
 been proposed at page 130, would meet the object desired by 
 all the above advocates of a credit currency, and would guard 
 us against the bullion monopolizer. He proceeds, therefore, 
 to call the attention of the reader to the further consideration 
 of that plan. Great as the calamities are acknowledged to 
 have been, which England has recently experienced, and un- 
 expected as they might be to the bulk of the people, the Ad- 
 dress (containing the plan alluded to), which was circulated 
 in March 1823, shews that those calamities have not been 
 greater than the writer had at that time good reasons for an- 
 ticipating, provided the mode of cash payments fixed in the 
 bill of 1819 were persevered in. 
 
 In page 138, it is shewn how the market-price system of 
 cash payments therein proposed, would probably have averted 
 those calamities altogether ; and after the distress had begun, 
 it is shewn how easily its progress might have been checked, 
 at a very trifling loss to the bank of England, if this system 
 had been acted on. 
 
 In the writer's opinion it would be an improvement upon the 
 system, as already suggested, if, instead of the bank being 
 liable to pay and receive coined gold only in exchange for 
 notes, it were arranged, that for sums above a certain 
 amount, say 100/., 200/., or 300/., uncoined gold, assayed and 
 stamped by the mint, were made the medium of exchange, 
 at a price varying from that of coined gold in a degree 
 barely adequate to the cost of coinage ; and if uncoined silver 
 also were brought under a like regulation. By this means 
 a great expence in coinage might be saved, and it would ob- 
 viate such objections as those advanced in the time of Wil- 
 
 1
 
 157 
 
 liam the Third, by Sir Dudley North, against the renewal of 
 the free coinao-e act.* 
 
 The system of cash payments here advocated, it will be 
 seen, is but a modification of the suggestion which proceeded 
 from the bank directors to the committee of the lords, in re- 
 ply to their communication to the bank, dated the 24th of 
 March 1819, of which plan of the directors the author of 
 these remarks was not aware when his address of March 
 1823 was printed. The substance of the reply of the bank 
 directors is given in page 116. On that reply Mr. Ricardo 
 made the following observations, in his pamphlet on Protection 
 to Agriculture. 
 
 " If this proposal had been acceded to, the bank would it- 
 self have determined the price at which it should have sold 
 gold from time to time to the public, because by extending 
 or curtailing their issues, they had the power to make the 
 price of gold j ust what they pleased, 4/. or 1 0/. an ounce, and 
 at that price to which they might chuse to elevate it, they 
 graciously proposed to sell it, provided a reasonable time were 
 allowed to prepare itself to try the effect of such a measure." 
 It is probable that sentiments like these operated with the 
 committee of the lords, so as to cause them to reject the pro- 
 
 * " I call to witness the vast sums that have been coined in England, 
 since the free coinage was set up. What is become of it all? Nobody 
 believes it to be in the nation ; and it cannot well be all transported, the 
 penalties for so doing being so great. The case is plain, the melting- 
 pot devours it all : the rather because that practice is so easy, profit- 
 able, and safe from all possibility of detection, as every one knows it 
 is ; and I know no intelligent man who doubts but the new money goes 
 this way. Silver and gold, like all other commodities, have their ebb- 
 ings and flowings. Upon the arrival of quantities from Spain, the mint 
 commonly gives the best price for it ; that is, coined silver for un- 
 coined silver, weight for weight. Wherefore it is carried into the 
 Tower and coined. Not long after there will come a demand for bul- 
 lion" to be exported again. If there is none, but all be in coin, what 
 then? melt it down again; there's no loss in it, for the coining cost 
 the owners nothing. Thus the nation hath been abused, and made to 
 pay for the twisting of straw for asses to eat."
 
 J 58 
 
 posal of the bank, and also led both houses of parliament to 
 think as Mr. Ricardo appears to have thought, that the above 
 proposal indicated such selfishness on the part of the bank, 
 as rendered their subsequent remarks on Mr. Peel's bill pow- 
 erless. But the above objection, which is presumed to have 
 weighed with parliament, and which Mr. Ricardo has clothed , 
 in words, falls to the ground if the bank were bound, as the 
 present plan proposes, to buy as well as sell gold at the price 
 quoted. Because to raise the price of gold would be to dimi- 
 nish the value of bank notes, and to diminish the value of 
 bank notes would be to diminish the value of all debts owing 
 to and from the bank ; and as the amount of debts owing 
 to the bank, and its stock in hand, must always exceed the 
 amount of claims upon it by the amount of its net capital, 
 so every diminution in the value of bank notes must be 
 a loss to the bank proprietors of so much in the value of 
 their capital : therefore the bank would be prevented from 
 raising the price of gold. Thus Mr. Ricardo's objection has 
 no foundation, except on the supposition that the bank direc- 
 tors might possibly do that which it was obviously contrary 
 to their interest to do. 
 
 One position, however, the foregoing remark of Mr. Ricardo 
 goes to maintain, namely, that the directors of the bank, by 
 extending or curtaihng their issues can, under a market price 
 system, make the price of gold just what they please. This 
 is important, because, for the reason already assigned, it is ob- 
 viously the interest of the bank to keep it down as low as the 
 law will allow. It being then admitted that the bank, un- 
 der the market price system, would have the power to govern 
 the value of gold, and it being apparent that it is their interest 
 to keep it as low as the law will allow, government has only 
 to fix a certain price as the lowest to which it should descend, 
 agreeably to the plan proposed at page 1 30, (and a minimum 
 they would of course be able to fix, though not a maximum) 
 and there would be the fairest reasons for believing that the cre- 
 dit currency of the bank of England, and the metallic currency
 
 159 
 
 of the kingdom, might always be kept at par with each 
 other. 
 
 Our present credit currency system, accompanied as it is 
 with a fixed price for gold under all circumstances, is like a 
 steam-engine boiler without a safety-valve. If the credit cur- 
 rency be at any time disproportionate to the metallic currency, 
 (an effect which may be produced as easily by a sudden and 
 artificial contraction of the metal, as by an extraordinary ex- 
 pansion of the credit) the only alternative is to suppress for a 
 time the whole machinery which generates the circulating 
 medium, or else to submit to an immediate convulsion ; 
 whereas, accompany the credit system with cash payments 
 at the market price, and you at once provide a safety-valve 
 for your boiler, which would relieve it in this way : the credit 
 currency could never be in excess without immediately pro- 
 ducing an exportation of gold — an exportation of gold could 
 not take place in such a degree as to effectuate the obstruc- 
 tion of our home circulation, without forcing the bank to ad- 
 vance the price of gold in relation to their own notes. This, as 
 just observed, would be attended with loss to the bank, and 
 the apprehension of that loss would prevent excessive issues. 
 Thus, whilst the vent for bullion would be free, there would be 
 no inducement to carry it beyond the legitimate occasion, so 
 as to speculate in it ; because in such a case England could 
 and would do without it, until the speculator felt, as in the 
 time of William the Third, that his loss in interest of money 
 was greater than any possible gain on the speculation could 
 cover. And thus the monopoly of money would be de- 
 stroyed by the agency of the same principle which has 
 hitherto fostered it, viz. self-interest ; for under this system, 
 to promote the free circulation of money would be at all 
 times as much the interest of the individual as of the public. 
 
 Allusion has already been made to the mode in which bank 
 notes performed the office of an effectual circulating medium, 
 under the restriction act : see page 9. Under the system
 
 160 
 
 here propo&ed, they would circulate in the same manner, only 
 with this improvement, that under the market price system 
 there would be a regular connecting link always preserved be- 
 tween the circulating medium of England and that of the 
 rest of the world, and the holder of bank notes, w ho did not 
 want them for home circulation or for immediate use, would 
 always know where he could get them converted into metallic 
 money, upon the most equitable terms. This was not the 
 case under the bank restriction act. In both cases, however, 
 the chief utility and value of bank notes is made to rest upon 
 the alternative, which the law imposes upon Englishmen, to 
 pay, periodically, either bank notes or sovereigns to the state 
 for taxes. 
 
 The mode in which the local credit currency has performed, 
 and is still capable of performing all the functions of the local 
 circulation, for sums of one pound and upwards, has been ex- 
 plained in page 104. It is there seen, that local notes hold 
 much the same relation to commercial bills, which bills are 
 called into existence by the production and sale of raw produce 
 and of manufactured goods, that bank notes hold with respect 
 to exchequer bills and government securities, which bills 
 and securities are called into existence to supply the ways 
 and means of government ; and in like manner as the holder 
 of a bank of England note has the property and credit of 
 the bank of England pledged to him for the fulfilment of the 
 promise contained in that note, so has the holder of a local 
 note the property and credit of the bankers who issue it 
 pledged to him for the fulfilment of the promise which it con- 
 tains. There is, however, this difference in favor of the local 
 circulation over that of the bank of England : if the bank 
 directors mismanage their business, the property of the pro- 
 prietors is secured by charter from being rendered responsible 
 to the public, beyond their shares in the bank ; whereas, if the 
 local bankers or their agents mismanage their affairs, the pro- 
 prietors are liable to be stripped of every vestige of their pro-
 
 161 
 
 perty. Compare also the amount of the issues of many private 
 bankers with the amount of property which they have at stake, 
 and make a Hke comparison betwixt the amount of the issues 
 of the bank of England and the amount of property which that 
 establishment has at stake, and it will be found, that so far as 
 bond Jide security is concerned, there are many private bankers 
 in England whose credit ought to rank higher even than that 
 of the bank of England. 
 
 Mr. Ricardo's reasoning on the reduction of the money value 
 of abundant crops of corn, shews that similar effects must 
 always follow any increased power of producing other commo- 
 dities, unless it be accompanied with the ability of calling out 
 and sustaining an increase in the amount of the circulating 
 medium somewhat adequate to the representation of those 
 commodities. To the power which the local currency has 
 afforded of doing this, it is perhaps to be attributed, that in 
 none of the manufacturing districts of England and Scotland 
 have the workmen been reduced so deplorably in their wages 
 as in the county of Lancaster : and it is worthy of remark, that 
 Lancashire and London, (parts of the kingdom where the 
 country circulation is comparatively unknown), are the only 
 places which complain of the grievousness of such a circula- 
 tion ; whilst those who live in the heart of the system, suffer- 
 ing all the alleged evils of it, are quite unconscious of those 
 fears which haunt the minds of men, who are so far off from 
 them as to be obliged to view the evils as it were through a 
 telescope. In Scotland, where the system of local credit cur- 
 rency has been acted upon most extensively, and where it 
 might have been thought that the promulgation of the golden 
 hopes of Mr. Peel would have been hailed with great joy, the 
 people were generally so ignorant of their sufferings on this 
 score as to oppose Mr. Peel's benevolent intentions en masse, 
 under the generalship of their great author. In England the 
 poor were equally unconscious of the benefit which they were 
 to derive from having a sovereign where they had been accus- 
 
 L
 
 162 
 
 tomed to have a promissory note, though they speedily and 
 grievously felt the inconvenience of getting neither one nor the 
 other. 
 
 To the veorking man, who merely wants money as a medium 
 of supplying his immediate necessities, and not as an idol of 
 worship, it is a sufficient consideration, that the local note 
 which he receives for his week's work, is in such credit with 
 all the shopkeepers in the neighbourhood, that he can go to 
 any one of them and get his wants supplied ; and the trades- 
 man who takes the note would not have given goods for it, had 
 he not known that with it he could make his payments also. 
 As to the degree of credit due to each local note, that is a 
 matter of private judgment; and however poor and ignorant 
 the receivers may sometimes be, the practical knowledge of 
 the writer of these remarks justifies him in saying, they are 
 much more shrewd in judging of their own interest in the 
 taking of a local note than those people are apt to think, who 
 from their station in life are obliged to receive all their know- 
 ledge of the capacities of the common people from hearsay. 
 
 The regulation for the payment of local notes contemplated 
 by the present plan, is simply this, that as the bank of Eng- 
 land is required at all times to pay its notes on demand in 
 cash or bullion at the market price, so local bankers should 
 always be required to pay their notes on demand either in 
 bank notes, or coined money. 
 
 Amongst the opponents of the credit currency, a writer in 
 the Times newspaper, who signs himself Daniel Hardcastle, 
 holds a conspicuous* place. Alluding to the mode in which 
 an increased circulation of bank notes is generated, he ridi- 
 cules the idea of England being prosperous because money 
 is plentiful. " For why," says he, '' is money abundant? Be- 
 cause the government gets into debt with the bank. And why 
 does government get into debt with the bank ? Because it is 
 poor. Increase then the poverty of the government, and you 
 will have still more money." In this paradoxical argument.
 
 163 
 
 there is a mixture of truth and error, to clear up whicli, may 
 throw further light on this subject. If no revenue for the 
 government were required from the people, then we might do 
 without coined money altogether, and the precious metals 
 might find their value, as in the patriarchal ages, simply on 
 the principle of barter ; each man exchanging his labour, 
 or the product of it, with his fellow men, on the same system. 
 Or if taxes were paid as tithes may be paid, either in kind or 
 in money, at the option of the payer, we might do without 
 bank notes: but as the present case resembles neither of these, 
 as the laws render it imperative upon the people of England 
 to pay a large annual revenue to government, either in gold or 
 credit currency ; therefore, it is highly important to the people 
 that the medium in which it is paid should be in an equal de- 
 gree at all times attainable by all who have labour or the pro- 
 duct of labour to offer for it. 
 
 There are two kinds of poverty. A man may have an estate 
 worth 1 0,000/. and yet be in want of money ; and lacking- 
 money, in the judgment of a Jew he would be considered poor, 
 although he might sell his estate, or borrow money upon it. 
 Another man has neither money nor estate, and he is poor 
 indeed. Suppose that a man in the former circumstances 
 borrows 5000/. on security of his estate, and that the expendi- 
 ture of this money upon his estate has rendered it by one-half 
 more productive than it was before, it will appear, that 
 measuring value by the amount of the real necessaries of life 
 produced, the owner of the estate, though he owes this money, 
 is in as good circumstances as he was before he borrowed it, 
 while the rest of the community have benefited by the in- 
 creased supply ; and if every bushel of wheat, &c. were 
 allowed to possess the same money value which it had before 
 the improvement of the estate, the owner of the estate would 
 now be as well able to borrow a second loan of 5000/. as he 
 was when he borrowed the first. But the parties who lend 
 the money must be the judges of the value of the increased 
 
 L 2
 
 164 
 
 produce, and if they judge erroneously, their property must 
 suffer. It is right also to keep in mind that the lenders of 
 money never lend it merely because the borrower wants to 
 borrow, as Daniel Hardcastle's reasoning would imply; but, 
 because in their judgment the security he offers is an adequate 
 security. 
 
 The poverty of England is of this kind, for though the 
 mortgages upon the estate have greatly increased, yet the 
 productive powers of the estate have fully kept pace with the 
 debt upon it. Apply then to the case of England the same 
 rule which governs individuals in their private transactions, 
 and we shall find that her increased ability to borrow money 
 is proof, that in the judgment of the lenders she has increased 
 means of payment for the use : and the greater then the 
 national debt, the greater is the proof of the national wealth, 
 if the lenders form part of the commonwealth. 
 
 But it must always be kept in mind, that the truth of this 
 argument rests upon the admission, that property in general 
 (by which is meant every thing which can conduce to the 
 comfort and advantage of man) is entitled to represent value 
 equally with money. Limit the representation of value solely 
 to gold or silver, according to the Jewish system, and the 
 reverse of the above aro;ument will be true. The truth of the 
 statement would also be taken away if government were 
 themselves to become the issuers of a paper currency, for then 
 the relation of the borrower to the lender would be reversed, 
 and o-overnment might borrow without regard to the judgment 
 of the lender ; and as the government could not be distrained 
 upon for their promissory notes, those notes would be what 
 French assignats were, mere tax-paying paper. Under the 
 bank restriction act the credit currency of England was 
 doubtless in great danger of being brought into this state ; 
 nevertheless, the experience of even that period shows that 
 the expenditure of one loan before another was borrowed, had 
 such a beneficial effect upon the productive powers of Eng-
 
 165 
 
 land, that the government (greatly embarrassed as it some- 
 times was) did always find the monied interest prepared 
 voluntarily to lend a new loan ; and the discretion with which 
 the bank directors managed their affairs under such novel 
 circumstances, when from the necessities of the state they 
 might have increased their issues, had they chosen, until 
 bank notes were in the relation of 10/. to the ounce of gold, 
 shows the utility, even under the bank restriction act, of 
 having the issuers of credit currency in a body distinct from 
 the o-overnment. It also shows that the bank directors were, 
 during the war, well aware in practice of that which has been 
 shown in theory, viz. that no profit is to be obtained to their 
 establishment by issuing notes to an amount so large as to 
 diminish the value of them in relation to the precious metals. 
 In London (where the people derive all the benefit of a local 
 circulation from the bank of England notes and bankers' 
 cheques) it is quite easy for a writer, who is ambitious to be dis- 
 tinguished as " the great enemy of the paper-money system," * 
 to persuade half the people into a belief that local notes are 
 worthless rags, and of no more value than the slip of paper 
 upon which they are written ; though, if some of these worth- 
 less rags, representing ten pounds' worth of the credit of 
 the Gurneys of Norwich, or Smiths of Nottingham, or of a 
 hundred others that might be named, were to fall into that per- 
 son's hands, he would doubtless find means to extract ten 
 golden sovereigns from them, or the value of ten sovereigns 
 in any other commodity, as effectually as from a cheque re- 
 presenting so many pounds' worth of the credit of Mr. Drum- 
 mond of Charing Cross. 
 
 * Cobbett says of himself — "There is a general understanding 
 throughout the country that I am the great enemy of the paper money 
 system, and that government is its great friend ; that is all I want to be 
 understood. I know that I shall see it fall, and without any impatience 
 I anticipate my mighty triumph." Cobbett's Register, Dec. 22, 1827, 
 Page 819.
 
 166 
 
 Consistent as it may be in Mr. Cobbett, who boasts of being 
 the uniform opponent of the credit system of England in all 
 its branches, to spare no pains to decry the local credit cur- 
 rency, it seems difficult to discover on what principle a noble 
 lord, the coadjutor of Mr. Pitt, and lately at the head of the 
 treasury, should have joined Mr. Cobbett in the hue and cry 
 against country bankers and the country banking system. 
 
 Lord Liverpool, however, and Mr. Cobbett, are not the only 
 parties of public notoriety who have unconsciously or wilfully 
 fallen into great misapprehension concerning country bankers^ 
 and concerning the nature and value of a country bank note. 
 Mr. Tooke, alluding to the local currency of England, has 
 the following remark: " But if there is (see pp. 122, 123) 
 any object more important than another for which the govern- 
 ment of every state has been invested with the exclusive pri- 
 vilege of coining money, it is that of protecting the lower 
 classes of society, who are little competent in this particular to 
 protect themselves from the risk of loss in receiving their sti- 
 pulated wages, or other payments. And this function of the 
 sovereignty of issuing coin, which, under the strongest sanc- 
 tion, certifies to every member of the community the weight 
 and fineness of the money which he may be entitled to receive, 
 is justly guarded against the interference of private indi- 
 viduals, by the severest penalties. But, by a strange incon- 
 sistency, while such care is manifested to secure the commu- 
 nity from being imposed upon by metallic money of less than 
 standard value, every adventurer who chooses to follow the 
 trade of a banker, is allowed to issue a spurious paper money, 
 which, having neither intrinsic value, nor any adequate secu- 
 rity for eventual convertibility, is, in too many instances, 
 neither more nor less than a fraud : a fraud of which the most 
 numerous, and most helpless classes, and those who can least 
 bear the loss, are most commonly the victims." 
 
 Amongst other misconceptions contained in this paragraph, 
 it is obvious that Mr. Tooke has quite overlooked an important
 
 167 
 
 distinction betwixt the cases of an issuer of counterfeit money, 
 and of this spurious paper money, as he calls it. A 
 person who signs his own name to a promissory note, issues 
 it for what it is, viz. for his own promissory note ; and, 
 however worthless his credit is, if it circulates at all, it circu- 
 lates upon the strength of that credit : but one that issues 
 counterfeit coin pays it for what it is not, viz. for the coin of 
 the realm. Therefore, Mr. Tooke's argument can only apply 
 to one that issues a forged promissory note, and for that 
 offence the penalty of the law is as severe as against the issuer 
 of counterfeit coin. 
 
 Whenever the people have discovered the means of reliev- 
 ing themselves from the difficulties which state necessities 
 have imposed upon them, it has rarely happened that they 
 bave been benefited by the interference of government ; but if 
 such an interference has not done good to the public, it has 
 frequently done injury. Queen Elizabeth's reign, and the 
 period immediately succeeding it, supply us with a fact 
 strongly illustrative of this truth. 
 
 From the time that the value of money was increased by 
 Elizabeth, there became a growing necessity for coins of 
 smaller value than the smallest silver piece ; this was a na- 
 tural consequence of making that which had once passed for 
 twelvepence, come down to twopence farthing. For some 
 time tradesmen issued farthing and halfpenny tokens, which 
 they pledged themselves to take back at the value at which 
 they were issued. The use of these tokens furnished a grand 
 subject for popular clamour. It was alleged that the poor 
 experienced great loss from this system, as such tokens were 
 only to be repaid at the same shop whence they were first 
 issued. In the following reign of James the First, Sir Ro- 
 bert Cotton estimates that in London there were then up- 
 wards of three thousand tradesmen who issued this small 
 money, and that one with another they issued about five 
 pounds each, making a gross sum of 15,000/. This was con-
 
 168 
 
 sidered an enonnous amount, and a case was thought to be 
 made out for the interference of government. The crown, there- 
 fore, took upon itself to provide this small money. But mark 
 the consequences. In the next reign, that of Charles the First, 
 those who had the royal patent for issuing this small money, 
 issued not merely to the amount of 15,000/., but as much as 
 200,000/. worth of it, and the poor people at last could not 
 find even one shop where they could pay a farthing of the 
 money. The patentees were bound to take it back when ten- 
 dered to them ; but, on the alleged plea that a great deal of 
 it was counterfeit, they refused, and the loss fell upon the 
 holders. Thus, to save the community from a possible loss of 
 a portion of 15,000/., a loss to ten times the amount was im- 
 posed upon them, by giving them the benefit of money coined 
 with the sanction of the government, and under the pretence 
 too of " protecting the lower classes of society from the risk of 
 loss in receiving their stipulated wages." 
 
 It is doubtless the duty of government to make laws for the 
 due payment of stipulated wages ; but it is also incumbent 
 upon them to afford every facility to enable the lower classes 
 of society first to make the stipulation. The evil which 
 presses upon them in these latter days is, that they are un- 
 able to obtain a stipulation for wages adequate to their sub- 
 sistence, and not that they are unable to get paid when they 
 have obtained the contract, and done the work. 
 
 If it were a fact that the function of issuing money, being 
 wholly vested in the crown, had secured the lower classes of 
 society from risk of loss in receiving the amount of their sti- 
 pulated wages, it might furnish a reason why that power 
 should continue to be solely vested in the crown. But our 
 history abundantly shows that it was by the crown that the 
 specific value of our money was so greatly diminished, from 
 the reign of Edward the Third to that of H^nry the Seventh, 
 and so wretchedly debased, as well as diminished, during the 
 reigns of Henry the Eighth and Edward the Sixth. And
 
 169 
 
 though Elizabeth partially restored it, that is, the silver part 
 of it, (to do which she inflicted great hardships upon the bulk 
 of the people), yet, before the conclusion of her reign, she her- 
 self began to tamper again with the money, and her successor, 
 James, considerably diminished the specific weight of the gold 
 part of the coinage. His son Charles was prevented merely 
 by want of power from again reducing the worth of our silver 
 money to one-fourth of the value to which Elizabeth had re- 
 stored it ; although, as we have seen by his reply to the Scotch 
 remonstrance, he was as indignant as Mr. Tooke can be, at 
 his subjects daring to interfere with the crown in its exclusive 
 privilege of issuing money. To say nothing of the manner 
 in which James the Second exercised his kingly power of 
 coining money in Ireland, by which, on the success of his son- 
 in-law, the lower classes of society were compelled to take one 
 farthing for that which had been paid to them as one shilling ; 
 it has been seen that, in the time of William the Third, the 
 crown was for a long time compelled to sanction the currency 
 of money, by receiving it in taxes, w^hich was enormously be- 
 low the standard ; and that the evil was only at last sur- 
 mounted by investing a company of merchants and bankers 
 with the privilege of issuing their credit as currency, and by 
 the king not merely granting to his subjects the power of 
 issuing money, but by his absolutely surrendering for a time 
 his own power of continuing the coinage of gold. Lastly, 
 under the operation of the bank restriction act, the lower 
 classes of society were compelled to take a bank note in pay- 
 ment for twenty shillings in wages, when the metallic value of 
 it was not more than thirteen or fourteen shillings. This, 
 it will perhaps be said, arose from the misconduct of the 
 bank of England. But they who would lay the fault upon 
 the bank, know not, or have not regarded, the circumstances 
 which led to the bank restriction act. The necessities of the 
 bank of England (though made the stalking-horse for obtain- 
 ing that act) were in fact a secondary cause; the necessities of
 
 170 
 
 the govetnment were the primary one : and had not the bank of 
 England been ready to stand betwixt the government and the 
 public at that time, in the issues of credit money, there is 
 eveiy reason to believe that a paper currency would have been 
 issued directly from the English government, like that of the 
 French government ; and English money would have shared 
 the same fate as the French assignats ; in which case the 
 people, instead of losing six or seven shiUings in the pound, 
 would probably have lost twice that sum. 
 
 The same error relative to the nature of our local currency 
 which is observable in the foregoing extract from Mr. Tooke's 
 pamphlet, appears to have had considerable influence upon 
 the minds of other writers on this subject. It is a singular 
 coincidence, that Mr. Ruding, Mr. Tooke, the Edinburgh 
 Reviewer, and Mr. Drummond, have given their sanction to 
 this error in nearly the same words : — Mr. Ruding says, 
 " The political reason by which government is guided in per- 
 mitting individuals to form money of paper, which has no 
 intrinsic worth, whilst it punishes with death the striking it 
 in real gold and silver, has never yet been detailed to the 
 public, and therefore I presume not to conjecture what its 
 nature may be. All I dare to contend for is this, that a 
 coinage which costs a man nothing will probably be carried to 
 a greater extent than that wherein materials more costly are 
 employed." Annals of the Coinage, v. i. p. 191. 
 
 The Edinburgh Review : — " With an Irish sort of con- 
 sistency we hang a man for issuing a spurious sixpence, 
 and allow every adventurer, however unprincipled, to open a 
 money shop, and to thrust out notes, not worth the paper on 
 which they are engraved, into circulation !" No. 86, p. 273. 
 
 Mr. Drummond says, " Issuing notes is not trading, but 
 coining money : a power which no sovereign but that of 
 England ever suffered to depart from his own hands, and 
 which never can be safely lodged in any other. If it is 
 deemed necessary to continue the punishment of death as
 
 171 
 
 the penalty for putting into circulation worthless coin, it is 
 passing strange that no penalty whatever should be affixed 
 to putting into circulation worthless paper. It would puzzle 
 a whole college of Jesuits to explain the moral difference 
 between the two oilences ; and the evil to the community 
 must be acknowledged equal in both cases. No promissory 
 notes, payable on demand, ought to be issued by any com- 
 pany or individual, but the bank of the state." Elementary 
 Propositions, Fourth Edition, p. 45. 
 
 So obvious a mistake concerning the value of local notes 
 having been adopted by these distinguished writers, may 
 serve to show, that the subject has been in general very su- 
 perficially investigated. 
 
 The author of that article in the Edinburgh Review, from 
 which the foregoing paragraph is taken, says, " It seems, 
 therefore, to be quite indispensable that a complete and ra- 
 dical change should be made in the entire system of country 
 banking — that government should interfere, to put down a 
 system that naturally and unavoidably leads to periodical 
 revulsions that plunge thousands into bankruptcy and ruin ; 
 and that, when it gives private individuals the power to issue 
 money, it ought at the same time to have ample security, that 
 the public shall lose nothing either by their improvidence or 
 their fraud." Page 280. 
 
 " To effect that improvement in the system of banking in 
 England, which is so essentially necessary, three different plans 
 (he adds) have been proposed, viz. 1st, to repeal the statute of 
 1708, and allow the formation of joint-stock bank companies, 
 with numerous bodies of partners, on a plan similar to those 
 established in Scotland ; 2nd, to suppress all private bank 
 notes for less than 5/., and to supply their place with coin, or 
 with smaller notes of the bank of England ; and, 3d, to 
 allow private banking companies to issue notes, as at present ; 
 but to oblige such as chose to avail tliemselves of that power.
 
 172 
 
 to deposit securities for their payment in the hands of govern-' 
 ment." 
 
 In commenting upon these plans, the author adduces 
 many reasons to show that the first would not effectually 
 prevent the recurrence of those money evils which have been 
 just inflicted upon us. 
 
 The second, he says, is much better calculated than the first 
 to give security to the public. 
 
 But as he contends that it is " at once unnecessary, oppres- 
 sive and inexpedient," forcibly to suppress " the smaller notes 
 of such country banks as are willing to find security for their 
 repayment," he proceeds to advocate a local credit currency, 
 upon the principle of its being always redeemable in " a 
 given and unvarying quantity of gold and silver;" country 
 bankers being required ** to deposit in the hands of govern- 
 ment as much stock as should be equal to the whole, or at 
 the very least, to three-fourths of the entire stamps issued to 
 them, as well for large as for small notes." 
 
 " There can be no question," says this writer, " that parlia- 
 ment will be justly chargeable with the most culpable inat- 
 tention to the public interests, if it does not interpose its au- 
 thority, either entirely to prevent the issue of small notes by 
 the country bankers, or to subject those who issue them to 
 the obligation of finding sufficient security for their payment. 
 It is in vain to attempt to palter with the existing system. With- 
 out the adoption of one or other of these plans, it will be found 
 to be altogether impossible to give stability to the pecuniary 
 transactions of the country, or to prevent the endless recur- 
 rence of those ruinous variations in the supply of money, 
 which we have shewn to be inseparable from the present 
 system." 
 
 But before the conclusion of the article was written, it ap- 
 pears that parliament had announced its intention "to interpose 
 its authority entirely to prevent the issue of small notes." It
 
 173 
 
 had anticipated the Reviewer, and deeming it " in vain to 
 attempt to palter with the existing system," had resolved at 
 one fell swoop to carry away all notes under 5/. But mark 
 the turn which the Edinburg-h Reviewer then gives to the sub- 
 ject. 
 
 He had previously proved, to his own satisfaction, that 
 there was nothing in the Scotch system of banking which 
 could secure us, i. e. the English, from " an endless recur- 
 rence of ruinous variations in the supply of money : " he had 
 proved, from returns made by three principal Scotch banks, 
 whose issues, he stated, are estimated to supply " a half of 
 the whole paper currency of Scotland,'^ that their issues had 
 fluctuated enormously: that from the 5th of January 1810 
 to the 7th of January 1814, the issues of the British linen 
 company had increased full forty per cent. ; from the 7th of 
 January 1814 to the 2nd of January 1818, they had been 
 contracted to thirty-five per cent. ; and from the 2nd of Janu- 
 ary 1818 to the 1st of January 1819, they had again in- 
 creased to forty-two per cent. ; — that the issues of the royal 
 bank had fluctuated in a still greater degree, viz. from the 1st 
 of January 1810 to the 21st of September 1816, they had 
 sunk seventy-five per cent. ; and in the course of fourteen 
 months, succeeding the 21st of September 1816, they had in- 
 creased in the enormous proportion of five hundred and 
 thirty-eight per cent. ; — and that the fluctuations of the issues 
 of the bank of Scotland were very considerable, though not so 
 excessive as either of the above : — he had himself inferred 
 from these fluctuations that '' it is easy to see how much the 
 prices of all sorts of commodities, and the fortunes of all 
 classes of individuals engas-ed in business, must have been 
 affected by such sudden and excessive changes in the quan- 
 tity, and consequently in the value of money :" — notwith- 
 standing these facts, and this reasoning from them, no sooner 
 was the intention of parliament announced to do away with 
 small notes altogether, (and thereby to fulfil one of the plans
 
 174 
 
 which this very article tells us, was essential to give stabilitif 
 to the pecuniar i^ transactious of the coimtry) than the Edin- 
 burgh Reviewer turns round and assures us that, with respect 
 to the paper currency of Scotland, he does not believe that there 
 would, at present, he any hazard in allowing it to go on even 
 WITHOUT SECURITY as heretofore. *' As Scotchmen (he 
 adds) we cannot but wish that no needless, and, above all, no 
 sudden innovation should be made on a system with which we 
 believe the great body of the country to be perfectly con- 
 tented. And we trust, that no sacrifice will be made of the 
 interests, or even the wishes, of that part of the empire, either 
 to a blind love of uniformity, or to the claims or clamours of 
 the rash speculators in English country paper." 
 
 These remarks are accompanied with the generous hope 
 that those bankers in England, who are enabled to provide 
 government with securities for their issues, may be allowed 
 also to continue to issue \l. and 21. notes, &c. He is even 
 pleased to admit that there may possibly be twenty or thirty 
 banks in England, to which, " from the known wealth of 
 their partners, and the prudence of their management, it 
 would be as safe to continue the old system, as to the greater 
 part of our Scotch banks;" but as exceptions cannot, of 
 course, be made in favour of one part of the English bankers 
 to the exclusion of the rest, and as a change of the system 
 " has now become necessary for the general safety," the Re- 
 viewer expresses his hopes that the proposed plan will be so 
 altered, as to admit of the continued issues of small notes 
 from such English bankers as could give the government se- 
 curity from them, and then concludes the article by saying, 
 " If this is done, the currency will be placed on the best pos- 
 sible footing ; and the establishment of the system will be a 
 great and signal improvement:" that is, if the Scotch currency 
 system were permitted to remain just as it was, without 
 interfering everi with the wishes of the Scotch people, and the 
 English bankers were made to deposit government securities
 
 175 
 
 with the state to the extent of their issues, the currencij would 
 be placed on the best possible footing, and the establishment of 
 the system would be a great and signal improvement. 
 
 The degree of selfishness, and inconsistency manifested 
 in this article by the scribes of the north, has been rarely 
 equalled. To render the thing more complete, our poorer 
 and more cautious neighbours (as the Reviewer calls his coun- 
 trymen) have actually succeeded in their object ; they have 
 eluded the straight waistcoat themselves, by persuading our 
 common keepers that though it would sit uneasily on them, it 
 was admirably fitted for the English people. No doubt the Re- 
 viewer's reasoning reads vastly well in Scotland. No doubt 
 the inhabitants of that poorer and more cautious country ought, 
 in their own estimation, to be intrusted with the manage- 
 ment of their own circulating medium, without any restric- 
 tion ; and that English people and English bankers (though 
 some twenty or thirty of them may rank as high as these 
 their poorer neighbours,) ought to be bound by a law im- 
 plying that both the issuers and receivers of country notes, in 
 England, were each incompetent to manage their own con- 
 cerns. It will, however, want something more than a few 
 smooth words to make this Scotch reasoning palatable to 
 Englishmen. 
 
 When this writer says, that " the chief object in granting 
 cash accounts in Scotland is to get small notes circulated, and 
 that if they were suppressed there may be some reason to fear 
 (as he tells us) that this useful species of accommodation would 
 no longer be afforded," he ought to have been aware that 
 the same argument would apply to England also ; but instead 
 of meeting the question upon the legitimate ground, that to 
 make general laws for superseding the necessity for individual 
 prudence was an excess of legislative interference which could 
 never accomplish ih^ general good, all he really appears to aim 
 at, on behalf of his countrymen, is to slip us into the noose 
 whilst they slipped out of it.
 
 176 
 
 If the Reviewer had beheved his own assertion, that by a 
 deposit of funded securities by the country bankers in the 
 hands of government *' the public would be protected from loss, 
 and the husi7iess of banking would gain both in respectabiliti/ and 
 security ^'^ how is it that he does not recommend that the 
 Scotch bankers should avail themselves of such a mode of in- 
 creasing the respectabiUty and security of their banking 
 business ? As he is so anxious to avoid these professed ad- 
 vantaoes, it is fair to believe he is either insincere or foolish 
 in stating them. 
 
 The article abounds with inconsistencies : "Panics (it says) 
 uniformly operate with the greatest effect on the lower classes, 
 or on the holders of small notes." And again, " Panics, 
 which are the great cause of runs, seldom or never become 
 general, except when the banks issue notes of so low a value 
 as to fit them for being used in retail trade, and in the or- 
 dinary business of society." In the next paragraph : ^' Pre- 
 viously to 1797, neither the bank of England nor any of the 
 country banks were permitted to issue notes of less than 5/." 
 Now every one knows that a panic did prevail in 1797, which 
 compelled even the bank of England to suspend its pay- 
 ments ; but with this fact staring him in the face, he thus 
 proceeds : " The currency used in small payments was thus 
 made to consist exclusively of the precious metals ; and as 
 there was no opportunity for a panic taking place among the 
 holders of small notes, only very few runs were made upon 
 the banks, and very little loss was sustained by their failure." 
 This, be it observed, is applied to the time immediately pre- 
 ceding 1797. And again, he tells us, that " extensive mer- 
 chants and money dealers are aware that no bank could re- 
 tire all its notes in the short space of 8 or 10 days I and 
 they are also aware that the maintenance of their own 
 credit is intimately connected with that of the banks in their 
 vicinity. But such considerations do not influence the hol- 
 ders of small notes ; and, accordingly, we find, that the crisis
 
 177 
 
 of 1797, the revulsion of 1815, and the late run, were chiefly 
 caused by the prevalence of a panic amongst the retail traders, 
 and small farmers." We find, indeed! but where do we 
 find that the crisis of 1797 was thus brought on? Certainly not 
 in the writings of the Reviewer, for he has immediately before 
 told us directly the contrary — he has told us that, prior to 
 1797, there were no one or two pound notes in England, and 
 therefore, according to his reasoning, there were no notes in 
 circulation fit for being used in the retail trade, and by the 
 smaller farmers : yet in the next page he tells us, that the 
 crisis of 1797 was caused by the retail traders and small far- 
 mers. One thing is very certain: if one and two pound notes 
 had any thing to do with the crisis of 1797, it could only be 
 the one and two pound notes of Scotland. But it is idle to 
 attribute such a power to these small notes. Who ever heard 
 of a man stopping payment for shillings, when he had got the 
 pounds ; or of a man who could pay his five and ten pound pro- 
 missory notes, but could not pay his one and two pound 
 notes? 
 
 If security be necessary, it is doubtless necessary, as the 
 Reviewer has said, that the security should extend to the 
 whole issues of the country bankers. But what is the se- 
 curity which he suggests? It is a deposit of government 
 securities in the hands of government, that is, a deposit of 
 unredeemable annuities, as a security for the payment in gold 
 on demand of promissory notes to an amount ten times as 
 great as all the gold in the country. 
 
 But the current issues of a banker do not by any means 
 constitute the sole grounds from which a panic may arise. 
 The banker may be ruined from a panic created by his merely 
 holding the deposits of his customers, if he be called upon for 
 them suddenly, and at a time when the export of bullion 
 is profitable in a mercantile view. London bankers do not 
 issue notes, and yet it is notorious that the recent panic com- 
 menced with them from the cause here assigned ; and when 
 
 M
 
 178 
 
 the panic was created, it occasioned the stoppage of many 
 country banks which were perfectly solvent, as their subse- 
 quent ability to pay in full has proved ; and their stoppage 
 might still take place, if the export of bullion were to become 
 profitable, even were the government to hold a deposit of their 
 own securities, unless the government were itself able on the 
 emergency to provide the banker, at his pleasure, with gold or 
 silver for those securities, according to some " given and unva- 
 rying quantity." If the government can devise a plan for 
 doing this, then the banker may be expected to provide his 
 customers, at their pleasure, with a given and unvarying quan- 
 tity of either gold or silver for the deposits in his hands ; but 
 without government can give some unvarying quantity of 
 either gold or silver for its own securities, it is in vain to ex- 
 pect that those securities can be made an effectual guarantee 
 to the public, that the holders of bank notes shall, under all 
 circumstances, at all times receive a given unvarying quan- 
 tity either of gold or silver from the banker. This brings 
 us back to the plan which it is the design of this pamphlet to 
 advocate, namely, the propriety of causing our circulating 
 medium to rest upon the market price of the precious metals, 
 and thereby to give to that medium in which the interest of our 
 national debt is paid, precisely the same kind and degree of 
 value, as was possessed by the medium in which the national 
 debt was contracted and is properly redeemable. 
 
 By our plan the circulating medium, though always paya- 
 ble in gold or silver, would be purely representative. Its 
 value would be derived from the same source that the national 
 debt derives its value ; for like as our national debt represents 
 a mortgage upon the whole property of England, and the 
 annual interest of it a mortgage upon the whole annual pro- 
 ductions of that property ; so the possessor of an exchequer 
 bill, or of a bank note, or of a country note payable on de- 
 mand in a bank note, would through the agency of the re- 
 spective parties issuing them, be entitled to a given portion of
 
 179 
 
 the national revenue, as perfectly as the holder of three per 
 cent, consols ; and like as those three per cents, admit of be- 
 ing realized in the precious metals at the market price, so 
 would this circulating medium admit of being realized in them ; 
 and thus the metallic value of our circulating medium would 
 at all times be intrinsically at par with the metallic value of 
 the circulating medium of foreign countries, in like manner as 
 the value of English funds is always intrinsically at par with 
 the value of foreign funds. 
 
 The Edinburgh Reviewer, in the article before us, speaks of 
 paper money on the supposition of its being circulated as an 
 universal equivalent or legal tender, and then argues that it 
 is quite immaterial to the value of goods, whether the aggre- 
 gate circulating medium consist of fifty millions of sovereigns, 
 or fifty millions of bits of engraved paper ; but if the fifty 
 millions of sovereigns or bank notes had their place supplied 
 with only forty millions, " then (the Reviewer says), as the 
 quantity of money in circulation would have been reduced 
 one-fifth, or twenty per cent., the prices of all sorts of com- 
 modities would have sustained a corresponding reduction ; 
 and if on the other hand we suppose sixty millions of one 
 pound notes to have been thrown into circulation, the opposite 
 effects would have been produced ; and prices, instead of fall- 
 ing, would have risen twenty per cent." From this species of 
 argument he comes to the conclusion, that " it is quite certain 
 that the re-enactment of the restriction in cash payments by 
 the bank of England, and the rendering of it perpetual, would 
 not have the least effect on the value of our paper currency, 
 provided its quantity was not at the same time increased. 
 But (he continues), there cannot be the shadow of a doubt 
 that under such circumstances it would be increased. Such 
 a measure would enable the directors of the bank of England 
 to exchange bits of engraved paper, not worth perhaps five 
 shillings a quire, for as many, or the value of as many hundred 
 thousand pounds ; and is it to be supposed (he asks), that 
 
 M 2
 
 180 
 
 they would not avail themselves of such an opportunity to 
 amass wealth and riches ?" Having previously observed, 
 " that convertibility into gold and silver at the pleasure of 
 the holder is not necessary to give value to paper money ; and 
 that, if perfect security could be obtained, the power of 
 issuing it would not be abused, or that it would always be 
 issued in such quantities as would render a one pound note 
 uniformly equivalent to the quantity of standard gold bullion 
 contained in a sovereign, the precious metals might be en- 
 tirely dispensed with as a medium of barter, or used only to 
 serve as small change ;" he proceeds to say, " Unluckily, 
 however, no such security can be given. This is a point with 
 respect to which there can be no difference of opinion. The 
 widest and most comprehensive experience shews that no set 
 of men have ever been invested with the power of making un- 
 restricted issues of paper money without abusing it, or which 
 is the same thing, without issuing it in inordinate quantities. 
 Should the power to supply the state with paper money be 
 vested in the managers of a private banking company, then to 
 suppose that they would, by limiting their issues, endeavour 
 constantly to sustain the value of their paper, would really be 
 to suppose that they should be extremely attentive to the pub- 
 lic interests, and extremely inattentive to their own." 
 
 The fundamental error of this reasoning consists in speak- 
 ing of bits of paper constituting an universal equivalent, with- 
 out duly considering how it is that bits of paper become 
 endowed with such a power. In these pages, we have shewn 
 it is because the state imposes upon the community the 
 alternative to pay its revenue either in certain bits of paper, 
 or otherwise in certain bits of gold or silver, that the people 
 are willing to give their labour and the product of it equally 
 for the one as for the other ; and we have shewn that for the 
 bank of England (or any other bank which might be endowed 
 with the privilege of supplying the state with its paper money) 
 to supply it in such a degree as to diminish its metaUic or its
 
 I 
 
 J81 
 
 foreign value, would be decidedly adverse to its own profit ; and 
 therefore we maintain, that by the plan of a credit currency, 
 as herein advocated, the reverse of the Reviewer's conclusion 
 would be true, and that the bank of England could not be 
 attentive to its own interests without being at the same time 
 attentive to those of the public : so that what the Reviewer 
 regrets as unluckily unattainable, viz. a security that the 
 power to issue credit currency would not be abused, we have 
 shewn is happily attainable, and as certainly as we can assure 
 ourselves that each man will strive to pursue his own private 
 interest. 
 
 It is further to be observed, that whether we will or not, all 
 our transactions in foreign trade are and must be unavoidably 
 governed by the market price system. This is at present 
 effected by adding to or subtracting from the pound sterling a 
 sum which is denominated the par of exchange, as it adjusts 
 the pound sterling in the foreign market to the market price 
 of the precious metal there. Our foreign trade is also liable 
 to that other means of adjustment, the course of exchange, 
 which depends upon any variation there may be in the market 
 in the relative amount of foreign bills of exchange offered for 
 sale, and that relative amount often depends upon a few large 
 bill-brokers, who have power to glut or starve the market 
 almost at their option. In proposing then the market price 
 system as the means of regulating the metallic value of our 
 domestic circulation, we only propose that system which must 
 work secretly, whether it be openly acknowledged or not. 
 
 But lest any should imagine, notwithstanding all we have 
 said, that the application of this market price principle to our 
 domestic circulation would cause some fluctuation in the me- 
 tallic value of our credit currency, and thereby greatly incon- 
 venience the community, we beg to call his or their attention 
 to what was the fact whilst the bank restriction act was in 
 operation. It is notorious, that under the operation of that 
 act, the wants of the state were such as to cause gold to vary
 
 182 
 
 in its relative value to bank notes in an enormous degree, in 
 such a degree as probably never would have been witnessed if 
 the system had been publicly avowed ; and yet, whatever other 
 evils might and did arise from the bank not being bound to 
 pay in gold on any terms, no confusion was ever felt in our 
 domestic circulation from the fluctuations in the value of 
 gold. 
 
 There is one other error in the Edinburg-h Review which it 
 may be proper to glance at, seeing it has been since sanctioned 
 by Mr. Hume and Mr. Huskisson in the House of Commons, 
 viz. the calling upon government to compel local bankers to 
 make their 5/. notes, &c. payable at the place where they are 
 issued, rather than in London. If the Reviewer had been 
 practicalli/ acquainted with the principles of English local 
 currency, he would have known that the conveniency of the 
 public was best consulted by these 5/. notes being made pay- 
 able in London, because there is an uniform demand for cash 
 notes payable in London throughout all parts of the kingdom ; 
 and were it otherwise, cash notes, payable in London, always 
 admit of being easily put in the way of payment, however dis- 
 tant they may be from the place where they may have been 
 issued ; whereas, a note payable only at the place where it is 
 drawn is oftentimes not easily negotiable thirty miles off, if it 
 happens to be in some direction where there is little or no in- 
 tercourse with the town where the note was drawn. It is mar- 
 vellous that this subject has been argued upon the ground, 
 that it would be a great hardship if the holder of one of these 
 notes, payable in London, were obliged to take coach from 
 Birmingham or Wolverhampton, or any other part of England, 
 to London and back, in order to get it paid ; as if the use of 
 the post-office were not known, or as if the parties advancing 
 this clumsy objection to notes payable in London were 
 ignorant that it was as applicable to bills of exchange payable 
 in London as to cash notes. But this suggestion for the 
 management of our English currency comes with a singularly
 
 183 
 
 bad grace from the Reviewer, who, we have seen, thinks it 
 wrong, for even the wishes of the Scotch people, in matters 
 relative to their currency, to be interfered with by parlia- 
 ment. We object not to our Scotch neighbours having their 
 own wishes gratified with respect to their own local 
 notes. We are aware that in Scotland, to obtain cash notes 
 payable in London, subjects the party who wants them 
 to a charge of twenty-one days' interest for the accommoda- 
 tion ; and if they delight in having it so, we are willing : but 
 let them not impose such benefits on us, by attempting to find 
 out a similarity betwixt their suppressed currency, of notes 
 payable six months after demand, and our English cash notes, 
 payable in London on demand. Some country banks issue bl. 
 notes payable in London, some make them payable at the place 
 where they are drawn, and some payable in both places. In 
 their arrangements in this respect, bankers do that which best 
 suits their own trade ; and they who take their notes, take 
 them not out of any accommodation to the bank, but to suit 
 their own convenience in return. It would be unreasonable to 
 make it obligatory on all bankers to make their notes payable 
 both in town and country, (although some of them do it 
 voluntarily) because it supposes them to make a provision in 
 both places for their payment; and if they are only made ab- 
 solutely demandable in one place, every person in the local 
 districts of England knows that it is more for the conveniency 
 of the public that that place should be London, than any other. 
 We cannot, therefore, but think that our Scotch neighbours 
 are a little tainted with self-conceit, when they manifest a 
 zeal to make us conform to their plan in this matter: at least, 
 it indicates bad taste in a Scotch writer to offer an interference 
 with the local currency of England, when in a few pages 
 afterwards he protests against any interference even with the 
 wishes of his own countrymen on the subject. 
 
 But the question which vitally concerns us now, is not whether
 
 184 
 
 6/. notes shall be made payable in London or Ihe country, nor 
 merely whether the 1/. and 21. local notes shall be done away 
 with ; but whether we shall continue our money system on the 
 terms prescribed by the bill of 1819, and thereby perpetuate a 
 low rate of wages, and a low rate of comfort to the people of 
 Great Britain, until her shores shall be deserted by all her 
 able-bodied and industrious people, and until her cities and 
 fruitful fields shall become a scene of confusion and decay, 
 and an habitation for the cormorant and the bittern ; or 
 whether we shall endeavour to relieve our money system from 
 the evils which are inseparable from the bill of 1819, and by 
 an easy and almost imperceptible alteration in that bill, pro- 
 vide a safety-valve to our credit system, and thereby give to 
 the people of England a higher rate of wages, and a higher 
 rate of comfort, without its being necessarily followed by the 
 destruction of our national credit. There can hardly be a 
 doubt to which of these alternatives any rational man will give 
 the preference. Let then that preference be generally ex- 
 pressed. Let us avail ourselves of the advantages which our 
 national credit is capable of affording to us, — advantages which 
 are as great to our commercial transactions as our coal mines 
 and rivers are to our mechanical operations, and which ad- 
 vantages, it may be, have resulted in great part from a long 
 series of national troubles. Let us avail ourselves of the uses 
 to which the credit of our great national bank, and the credit 
 of our local banks, may be made subservient ; and let not any 
 envious or narrow policy prevent us, arising from a fear, that 
 whilst the banks of the kingdom are made beneficial to the 
 community, the proprietors of those establishments may, in 
 return, derive some benefit from the community. Neither let 
 any petty jealousy exist betwixt the local bankers and the 
 bank of England. In one word, let the shackles which the bill 
 of 1819 has imposed upon the productive powers of our 
 country be only removed, cash payments being estabhshed
 
 185 
 
 upon the market price system instead of an unvarying price, 
 and we shall soon behold the garners of England full and 
 plenteous with all manner of stores, her pastures well stocked 
 with flocks and herds, her sons grow up healthy and vigorous, 
 and the voice of complaint no more heard in her streets. 
 
 By the money system herein advocated, it is certain that 
 our circulating medium would be chiefly supplied by credit, 
 but it would be credit possessing all the power of gold, with 
 greater activity and more uniform principles of application. 
 By this system all the equity of barter is combined with all the 
 conveniency of money ; and though our currency under this 
 system be mainly supplied by national credit and mutual con- 
 fidence, let it not therefore be despised. A man is not insensible 
 to the use of his coat, because he may happen to know that 
 the power by which it was spun and woven was generated by 
 the mere vapour of a steam-engine judiciously directed : 
 wherefore then should we think lightly of our circulating 
 medium, on account of its being chiefly supplied by credit, 
 seeing that credit in England has performed, and under 
 judicious regulations is still capable of performing, the same 
 operations which gold and silver perform for our neigh- 
 bours. 
 
 Even Mr. Cobbett, who declares himself to be the great 
 enemy of the credit system, admits that it may be thus pro- 
 fitable to us : " Pitt (says he, in the Register of 23d of 
 June, 1827,) instituted a system of giving credit. He built 
 immense warehouses, into which merchants might put their 
 cargoes, which remained thus locked up by the goverment 
 till the merchants were able and willing to pay the duties 
 upon the cargoes ; so that the importer having first, per- 
 haps, given bills, as they are called, that is to say, gone on 
 tick for the cargo, next put the cargo in pawn for the duty ; 
 then, when he found a customer, or could get his price, 
 went on tick again to raise money to pay the duties ;
 
 186 
 
 then took the cargo out of pawn ; then sold the cargo, and, 
 perhaps, got something by it, after paying the bills that he 
 had drawn for the purchase of the cargo, and after paying the 
 duties ; and thus, had a Gain upon the whole, without ever having 
 possessed, oj his oion, one farthing of money from the beginning." 
 Shall we throw away these advantages for the sake of re- 
 storing to gold and silver an absolute value, and so again 
 make of them a monster capable of devouring the best inte- 
 rests of the people? 
 
 But the author of these observations is nevertheless aware 
 that there are oftentimes many difEculties in the way of ac- 
 complishing that which is right, even after the right has 
 been pointed out. He is aware that many will say, we have 
 some glimpses of the promised land, and should be very glad 
 to enter into the possession of it ; but alas, the ministers of 
 the crown are pledged to the present system, and like the 
 children of Anak they are great and powerful, and likely 
 enough to value what the world calls their own credit even 
 more than the prosperity of their country. Let it be granted 
 that this is the case. Let it be admitted, that they are as 
 much pledged to the bill of 1819, as Queen Elizabeth was 
 pledged to fulfil the motto upon her coin, " semper eadem." 
 Yet, even then, there is no reason to fear that the right shall 
 not ultimately prevail. Queen Elizabeth persevered in her 
 money object ostensibly after she had departed from it secretly : 
 so have our ministers — to wit, the small note bill of 1822. 
 She then made a small alteration in her system, asserting that 
 it was only for a little time that the alteration would continue. 
 So have our ministers — to wit, the present toleration of the 
 small notes. She then obstinately persevered in the fulfil- 
 ment of her motto, until the Lord Treasurer was compelled to 
 acknowledge that the nation was losing 500,000/. annually ; 
 and then, notwithstanding all her pledges to the contrary, she 
 was obliged to abandon her motto, and her determination of
 
 187 
 
 causing the pound sterling to be represented always by a fixed 
 and unvarying quantity of metal. And however his majesty's 
 ministers may resolve, we may feel well assured that their de- 
 terminations must ultimately yield to that monster which the 
 bill of 1819 has again revivified, and which even Queen Eli- 
 zabeth could not conquer. They may manifest more ob- 
 stinacy than even Queen Elizabeth manifested. They may 
 cause the people to suffer more than she could bear to inflict : 
 but they cannot accomplish impossibilities ; and the longer 
 they persevere in the attempt, the greater must be their pre- 
 sent uneasiness and their future mortification. 
 
 Judging from our custom-house returns, there is too much 
 reason to fear that England is at present losing in her ex- 
 change with other parts of the world in a ten or twenty-fold 
 degree more than was experienced in Elizabeth's time. It ap- 
 pears, by the report for the last year, that for exports valued 
 at about sixty millions sterling, and which it is probable con- 
 tain capital, skill, or labour, to make them equitably worth 
 that sum, we are receiving in return imports valued only at 
 about forty millions sterling. Even supposing we get a few 
 millions in specie, in addition to these imports, there is still 
 ample scope left for a large national loss. 
 
 If we were exporting only our superfluous produce and su- 
 perfluous goods, it would be a matter of comparatively little 
 consequence ; but when, to meet our home demands for money, 
 our workpeople are deprived of shirts to their backs, and blan- 
 kets to their beds, and when our manufacturers and our farmers 
 are parting with their capital as well as their produce, in order 
 to force a scanty supply of bullion from abroad, and when the 
 receivers of British annuities and British rents, resident 
 abroad, are drawing that specie again from England which 
 it costs us such sacrifices to obtain, it must be obvious to 
 every one that the evil is of a character which, in the nature of 
 things, cannot possibly be of long duration. 
 
 Whilst the currency plan herein advocated differs essentially
 
 188 
 
 from all others before the public, it will be seen that the argu- 
 ments from which it derives support are strengthened by the 
 opinions of different parties; and that their views, which other- 
 wise clash with each other, also admit of being reconciled by 
 the present plan. 
 
 Thus, when Mr. Ricardo maintains that the proprietors and 
 farmers of lands in England may be ruined by a succession of 
 abundant crops, we admit that, under the existing cash laws, 
 it may be so ; but we do not agree with Mr. Ricardo, that, to re- 
 medy this, and to support that money law which his opinions 
 greatly contributed to establish, we ought to suffer the inferior 
 soils of the country to go out of cultivation ; because we agree 
 with Dr. Adam Smith, who, on the other hand, maintains that 
 the extension of the productive powers of a nation constitutes 
 its strength, and because we think that Mr. Ricardo's object 
 of saving the agriculturalist from ruin is achievable more 
 effectually by a correction of the laws which govern the mo- 
 ney value of produce, than by the annihilation of the produce, 
 or of the means of production. The way of effecting this, our 
 plan provides ; for, by it, the means of discharging money ob- 
 ligations would be derived from all property in common, not 
 from gold and silver exclusively, and therefore the more pro- 
 perty the nation possessed, the greater would be the aggregate 
 money value of that property. 
 
 Again, it is the basis of our plan, that Enghsh credit cur- 
 rency shall always be redeemable in gold or silver on demand^ 
 In strenuously maintaining this point, we yield not to the 
 bullion committee of 1810, or to the advocates of cash pay- 
 ments in 1819. We, therefore, are entitled to the support of 
 every argument which goes to establish the necessity of cash- 
 payments. But we are at variance with the mode in which 
 the bill of 1810 attempts to attain its object; because the his- 
 tory of our forefathers testifies, and our own experience corro- 
 borates the fact, that the plan by which the bill of 1819 seeks 
 to attach a fixed and uniform value to our English currency.
 
 189 
 
 must, under the influence of private interests (the constant 
 operation of which ought always to be taken into the account) 
 actually subject the value of our currency to enormous varia- 
 tions. By the plan now brought forward, we provide for the 
 possibility of a variation in the specific quantity of metal by 
 which the pound sterling shall be represented, and yet we 
 have shewn that it only requires the bank directors and their 
 competitors each to pursue their obvious interests, to make the 
 value of money fixed and invariable under it. 
 
 We can also agree with the warmest advocates of a credit sys- 
 tem. We can conceive it to be, as Sir John Sinclair would 
 say, "the mine of national prosperity;" but if it be not accom- 
 panied with cash payments at all, or if it be accompanied with 
 them on the present terms of an invariable amount, however 
 rich in metal this mine may appear to be, we are compelled to 
 admit that we had better relinquish the advantages than ven- 
 ture to pursue the system, as the vein may be lost to us at any 
 time, leaving us in greater poverty than if we had never known 
 its riches. 
 
 The opinions of Sir W. Petty upon Absenteeism, which 
 have been recently revived in the Edinburgh Review, and the 
 arguments of Mr.Huskisson on Free Trade, would be true both 
 in theory and practice, if the currency of our country were 
 placed upon the footing here advocated : we could therefore 
 agree with both ; but under our existing money law, experi- 
 ence tells us, that by the freedom with which we can export 
 money and goods, and the difficulty we have of getting an 
 adequate return, we are fast approaching the condition which 
 Ireland was in, when, from the scarcity of money there, in 
 proportion to their obligations, it was easier for the lower 
 classes of society to give forty-nine days' labour for the use of 
 the state in the course of the year, than two shillings in 
 money. 
 
 Mr. Cobbett insists that there is no salvation for the coun- 
 try, but by his plan of equitable adjustment, by which crown
 
 190 
 
 lands, church lands, and the like, should be extensively ap- 
 propriated to the discharge of the public engagements, and 
 by which the fundholder, and every other holder, should be 
 cut down to a ranch lower scale of income; in order, we sup- 
 pose, that John Bull should be sweated down, so as to bring 
 his person and his property within the limits of a metallic 
 •currency. Mr. Cobbett's plan, however, savours too much of 
 that which was adopted by Buonaparte, by Cromwell, by 
 Edward the First, and by all the lovers of arbitrary power, to 
 admit of its being palatable either to the man of wealth, or to 
 the man of reflection. If militaiy power were to prevail, it 
 might be acted upon; but whilst the civil power has any sway, 
 we trust, for the sake of all classes, poor as well as rich, that we 
 shall be preserved from the calamities which must attend equit- 
 able adjustment on Mr. Cobbett's plan. But, decidedly op- 
 posed as we are to his views, we must nevertheless admit that 
 he is correct in his argument, when he contends that under 
 a metallic system of currency, or under the system as it now 
 exists, the money price of agricultural produce must become 
 so reduced, that the farmer will be unable to pay his rent, 
 the landlord his taxes, and the government its annuities. We 
 would even go further than Mr. Cobbett, and assert, that 
 when the farmer shall be unable to pay his rent, he will also 
 be unable to employ his labourers, or at least to pay them ; and 
 that the labourers' condition will be the most wretched of all. 
 We also agree with Mr. Cobbett, that in equity, the labourer 
 is the last man in the kingdom who ought ,to go unfed 
 or unclad — like the ox which treads out the corn, he is 
 entitled by the laws of equity to taste the first fruits of the 
 produce ; and if it were an established fact, that the nation 
 could not produce food and clothing for the whole population, 
 then we admit that the landlord ought to relinquish his rents, 
 the fundholder his annuity, the clergyman his tythes, and 
 that the whole of the unproductive part of the community 
 should go unfed and unclothed — yea, that statesmen and
 
 191 
 
 periodical writers, who work with their heads and their pens, 
 rather than with hands and spades, should give up their' bread 
 and cheese, and that the emigrration committee should itself 
 be exported — before able-bodied and industrious labourers 
 should be forced from their country to seek the supply of 
 their moderate wants in a foreign land. Fortunately, how- 
 ever, it cannot be established as a truth, that the nation does 
 not produce food and clothing adequate to the supply of 
 the whole of its people ; for three times since the peace, ex- 
 perience has given its testimony to the fact, that when the 
 circulating medium has been allowed to expand in a degree 
 equal to the payment of adequate wages to the people, each 
 time the quantity of food and clothing has been found quite 
 equal to the supply of all classes. Whilst, therefore, Mr. 
 Cobbett contends for a metallic currenc)'', for perseverance in 
 Mr. Peel's Bill, and for the contraction of the money value 
 of every thing to a metallic scale — we contend for the estab- 
 lishment of an equitable credit currency, a currency which 
 shall stand in an equal relation to every kind of property, not 
 merely to gold and silver ; and of which every man who has 
 labour to bring to market may be secure of a portion suffi- 
 cient to supply his wants, and to give him his just share of 
 that national wealth which his labour contributes to produce. 
 
 It is difficult to anticipate every possible objection that 
 may be made to the plan, which it is the object of these re- 
 marks to bring before the public. Those, which appeared to 
 the writer most obvious, he has noticed ; and he can add, that 
 in all the discussions he has heard, and all the writings he 
 has read upon the subject, he has never met with an objec- 
 tion which did not admit of a satisfactory answer. 
 
 Amongst those who have favoured the author of this work 
 with their sentiments upon the plan, as brought forward in 
 his pamphlet published two years ago, one gentleman ex- 
 pressed an apprehension lest it should open a door to gam- 
 bling in the currency, in like manner as in the funds. As the
 
 192 
 
 same apprehension may secretly exist in the minds of others, 
 the author deems it right to state his reply. 
 
 It is agreed, that the market price of the precious metals 
 is to be determined by the bank of England making a give 
 and take offer, in like manner as the market price of any other 
 commodity (the quality of which admits of being equally 
 clearly ascertained) is determined when a merchant, of acknow- 
 ledged ability, offers to give or receive from time to time a 
 certain price for any quantity of it. This very circumstance 
 then is destructive of the spirit of gambling, for that is fostered 
 by the chance of buying at one price and selling at another, 
 which chance is altogether frustrated hy 2l give or take offer. If 
 the bank could do the same with three per cent, consols, stock- 
 jobbing itself would cease, although stock-dealing might con- 
 tinue ; and perhaps there is no reason why the bank should not 
 do this, when the foreign and home value of English money 
 shall become adjusted by one and the same principle ; and 
 when that currency in which the interest of the debt is paid, 
 shall possess precisely the same character as that in which 
 the debt itself is vendible. Uncertainty is the field in which 
 gambling sports, especially if the principle that determines 
 the game be only known to the few : such a field the money 
 system of England at present offers. The bank of England 
 governs the issue of money — the foreign exchanges govern 
 the bank — the course of those exchanges is governed by a 
 few monied individuals — those individuals are governed by 
 self-interest, and that man is the deepest stock-jobber, who 
 can best guess at the turn which it is the interest of those 
 individuals to give to the stock market. So long, therefore, 
 as the present money system continues, the pecuniary diffi- 
 culties of the nation must continue ; the public being sub- 
 jected either to continued poverty, or relieved only by tem- 
 porary gleams of wealth, terminating in a season of accu- 
 mulated distress. While this continues, the spirit of gamb- 
 ling will be in active operation : stop it, and gambling ceases.
 
 193 
 
 It is the object of the proposed plan, to take this absolute 
 power out of the hands of those few individuals who govern 
 the course of exchange, who can act or remain dormant at 
 their pleasure, who are pledged to nothing but their pri- 
 vate interest ; and to vest a conditional power in the directors 
 of the bank of England, the conditions of which are such, 
 that they could not use their power for the benefit of the bank 
 without promoting that of the public, neither could they 
 abuse their power to the injury of the community, without 
 inflicting greater injury on the bank. 
 
 When the time shall come for this improved money system 
 to be adopted, which, for the sake of the welfare of England, 
 we hope is not far distant, we may be prepared to offer a few 
 hints which may further tend to the improvement of our cre- 
 dit currency. At present we conclude by repeating the heads 
 of that plan which has been suggested. 
 
 1st, That bank of England notes be made a legal tender for 
 all payments of the value of one pound and upwards. 
 
 2dly, That the bank directors be required to pay their notes 
 on demand in gold at the market price, and to receive gold on 
 account, or in exchange for notes, at the same price. 
 
 3dly, That in order to ascertain or fix the market price, 
 the bank directors be required to give periodical notice of the 
 price at which they will give notes for gold, or gold for notes, 
 or receive gold on account. Such notice to continue in force 
 till the stated period for its renewal. 
 
 4thly, That as it might be for the temporary interest of the 
 bank directors, to enhance the value of their notes and of 
 the securities lying in their hands, by depressing the value of 
 gold, it be determined that the present mint price shall 
 be the minimum to which the market price shall descend : 
 which is to say, that the English mint shall always be open 
 for the free coinage of gold, and that 5 dwts. 3 grs. of stan- 
 dard gold, coined into a sovereign, shall never be of less value 
 
 N
 
 194 
 
 than a pound sterling, although by possibility it may be of 
 somewhat more value. 
 
 Taking the above suggestions as the ground-work of 
 our plan, we now propose that, to save a needless expence 
 in coinage, b^rs of gold duly assayed and stamped at the 
 mint, shall be allowed to constitute the medium of cash 
 payments for all sums above one, two, or three hundred 
 pounds, as may be agreed upon ; and that such bar gold 
 shall always be estimated at such a given rate per ounce less 
 than coined gold, as maybe equivalent to the cost of coinage. 
 For example, if coined gold were 3/. 17s. 10|c?. per oz., let 
 bar gold be 3/. 17s. %d. per oz. 
 
 The same regulation to be applied to large payments of 
 silver, supposing government should deem it expedient to 
 adopt the use of silver as well as of gold in large payments. 
 
 The regulation proposed for the government of the local 
 currency is, that country bankers be required always to meet 
 their issues either in coined money, or bank of England notes. 
 
 THE END. 
 
 London: 
 
 Printed by Littlewood and Co,, 
 
 Old Bailey.
 
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