THE UNIVERSITY 
 
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 LIBRARY 
 
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 LETTE RS 
 
 WRITTEN TO THE 
 
 GOVERNOR AND DIRECTORS 
 
 OF THE 
 
 BANK OF ENGLAND, . 
 
 IN SEPTEMBER, 1795, 
 
 ON THE 
 
 PECUNIARY DISTRESSES OF THE COUNTRY, 
 
 AND 
 
 THE MEANS OF PREVENTING THEM. 
 
 WITH 
 
 SOME ADDITIONAL OBSERVATIONS 
 
 ON THE SAME SUBJECT, 
 
 AND THE MEANS OF SPEEDILY RE-ESTABLISHING THE 
 PUBLIC AND COMMERCIAL CREDIT OF THE COUNTRY. 
 
 BV 
 
 SIR JOHN SINCLAIR, BART. 
 
 PRESIDENT OF THE BOARD Of AGRICULTURE. 
 
 LONDON: 
 
 PRINTED BY W. BULMER AND CO. 
 
 AND SOLD PY G, NICOL, BOOKSELLER, PALL-MALL; 
 
 CADELL AND D A VX ES, STRA N D J AND J.SEWELL, 
 
 CORNHILL. 
 
 
 \0 
 
 1797-
 
 PRELIMINARY OBSERVATIONS. 
 
 Jl he following Letters, were addressed 
 to the Governor and Directors of the 
 Bank of England in September 1796. 
 They were accidentally mentioned in the 
 House of Commons, in the course of a late 
 debate. I am thence induced to lay them 
 before the Public, to prevent any misre- 
 presentation of their contents, and in com- 
 pliance with the request of several respec- 
 table Members of Parliament, who wish 
 to have an opportunity of perusing them. 
 The reader will readily make every neces- 
 sary allowance, for letters WTitten with- 
 out any intention of publication, and 
 drawn up, rather with a view of sug- 
 gesting hints for the consideration of 
 the Directors, than of recommending any 
 particular measure to be adopted. The 
 author has long been deeply impressed
 
 with the idea, that it was of the most 
 essential consequence, to rouse the serious 
 attention, both of the Government, and of 
 the Bank, to meet the alarming crisis, in 
 regard to pecuniary concerns, which was 
 so fast approaching ; he flattered himself, 
 that the hints he had thrown out, would 
 have induced them to take some effectual 
 means to prevent the evils he appre- 
 hended ; and if they did not relish his 
 suggestions, that some other measures, 
 more like to answer the purpose, would 
 have been adopted. 
 
 It must be no small satisfaction to those, 
 who sincerely feel for the happiness and 
 prosperity of the public, that the unfor- 
 tunate event we have all so much reason 
 to regret, namely, the temporary suspen- 
 sion of monied payments at the Bank, in 
 consequence of the Order of Council of 
 the 26th of February, is not owing to any 
 deficiency of solid resources in the coun- 
 try, but may justly be attributed to causes
 
 L7l 
 
 which explain themselves, and which 
 might have been avoided, had early and 
 precautionary measures been taken. I 
 hope that it is still possible, by wise and 
 prudent regulations, to obviate a consider- 
 able part of the mischief which otherwise 
 must be looked for. The shock, however, 
 which public credit has received, will 
 require the best talents in the state, and 
 the united exertions of all parties and de- 
 scriptions of men, to ward off the cala- 
 mities which threaten us. 
 
 In delivering any opinion on a subject 
 of such peculiar importance, persons un- 
 connected with official men, are subject 
 to considerable difficulties. They can 
 only suggest general opinions, founded on 
 common report ; but ministers, and those 
 connected with them, may command the 
 most authentic information, and have it in 
 their power, to recommend such steps, as 
 their knowledge of facts, and the exigen- 
 cies of the case seem to demand. It re-
 
 n 8 ;] 
 
 quired no great wisdom to foresee, that the 
 alarm of an invasion, and the preparations 
 necessary to prevent it, would occasion a 
 great demand for specie, and the hoarding 
 up of considerable sums. If there was a 
 sufficient quantity of specie in the country, 
 a considerable proportion of it would pro- 
 bably be paid in the taxes to Government, 
 which ought to have been placed in 
 the Bank, as the great depot of our pecu- 
 niary capital. If there was not a suffi- 
 cient quantity, which Government ought 
 certainly to have ascertained, there was 
 little difficulty in drawing, either in the 
 course of trade, or by direct purchase, 
 more bullion from the continent, and 
 coining it here. There is indeed too much 
 reason to believe, that the quantity of 
 gold coined for these three years past, 
 has been considerably less than usual. If 
 that is the case, the calamity we de- 
 plore, may in a great measure be attri- 
 buted to that circumstance. The ex-
 
 C 9 3 
 
 change being in our favour, bullion might 
 have been procured ; and the expence of 
 coinage, even under the existing expen- 
 sive regulations, could never be an object 
 sufficient to deter either the Bank, or the 
 Government, from securing a sufficient 
 quantity of coin for the purpose of pre- 
 venting the mischiefs we now experience. 
 The principles on which the mint ought 
 to be regulated in this country, I propose 
 soon to bring before Parliament; for it is a 
 subject, on which, fortunately, more know- 
 ledge can now be accumulated, from many 
 intelligent individuals living at this time, 
 than perhaps in any former aera of our 
 history ; and if I am fortunate enough to 
 prevail upon government, to put that im- 
 portant branch of political economy on a 
 proper footing, an essential object will be 
 obtained, which may be the means of 
 securing an abundant supply of specie in 
 future.
 
 There is little doubt, that measures might 
 be devised, (and a plan for that purpose, 
 is sketched out in the following pages) 
 which may be the means of speedily open- 
 ing the Bank. Indeed from all quarters 
 of the House, useful suggestions, and plans 
 of relief will probably be offered, which 
 will be considered, as they ought to be, with 
 liberality and candour. Public credit ex- 
 tends its benefits to all parties, and has an 
 equal call on their respective exertions to 
 support it. Those who have most deeply 
 examined, and value the blessings of our 
 happy constitution, know well, that its 
 very existence is involved with, and es- 
 tablished on, that of our public credit. — 
 The throne, the church, the nobi- 
 lity, THE LANDED AND THE MONIED 
 
 INTERESTS, all fell in France, with the 
 violation of the public credit of that 
 country. How anxiously then ought the 
 guardians of the British constitution to
 
 C 11 3 
 
 rally round this great pillar of our pros- 
 perity ; more especially at a moment when 
 we have to combat the most inveterate 
 foreign hostility, and suffer, at the same 
 time, all the difficulties resulting from the 
 embarrassed state of our finances. 
 
 It is some consolation, however, to add, 
 my full conviction, that if this country 
 is wisely and ably governed, it may yet 
 be extricated from the distresses in which 
 it is involved ; and that if we conquer our 
 present pecuniary difficulties, if peace is 
 speedily restored to Europe, and if we 
 establish a broader basis of agricultural 
 strength, that we may again begin, a 
 new career of perhaps unrivalled pros- 
 perity.* 
 
 * Among the causes of our present pecuniary embar- 
 rassments, it can hardly be questioned, that the neglect 
 under which Agriculture has been suffered to remain, is not 
 the least important. In the course of the years 1795 and 
 1796, we were obliged to import above a million of quarters 
 of wheat alone, which, at the rate of only ^3. per quarter.
 
 amounts to three millions of money. Had that sum, in- 
 stead of being exported^ been lying in the coffers of the 
 Bank of England, the Order of Council would never have 
 been necessary, and the credit of the Bank would have 
 been unimpaired. I mention this circumstance, in order 
 to prove, how deeply the commercial interest is concerned 
 in our agricultural prosperity, and how anxiously they 
 ought to support the proposed general bill for extending 
 our cultivation, the surplus of which will be an important 
 article of commerce, and the means of bringing in con- 
 siderable wealth into the country.
 
 TO THE 
 
 GOVERNOR AND DIRECTORS 
 
 OP THE 
 
 BANK OF ENGLAND. 
 LETTER I. 
 
 GENTLEMEN, 
 
 1 LEARN, with infinite regret, the very 
 general distress, which prevails in the 
 commercial world, from the scarcity of 
 money, and the diminution of credit ; 
 and it would give me much pleasure, could 
 I furnish any hints, which, improved on 
 by your judgment and experience, could 
 in the smallest degree tend to alleviate 
 such pressing evils. For if they are not 
 checked in time, there is too much reason 
 to apprehend, that they must ultimately 
 be productive of consequences truly serious 
 and alarming.
 
 C 14 3 
 
 There is certainly more wealth than 
 ever in the country, of a solid and sub- 
 stantial nature. Our lands — our houses- — 
 our shipping — our manufactures — our 
 goods of every sort, are greater in quan- 
 tity, and more valuable in amount, than 
 ever they w^ere before. But our distresses 
 are owing to the want of a sufficient quan- 
 tity of a circulating medium, either of 
 paper or of specie, adequate to the increas- 
 ed commerce, and the increased revenue 
 of the country ; and also adequate to sup- 
 ply the vacuum occasioned by that ex- 
 portation of money to foreign countries, 
 which has taken place in the course of 
 the war. 
 
 For remedying the evils in question, I 
 take the liberty of submitting to your con- . 
 sideration, the following hints. 
 
 I. Would not an increase of the capital 
 of the Bank, enable it to serve more effec- 
 tually, both the merchant and the public; 
 and would not public credit be much im-
 
 c 15:1 
 
 proved, if a certain proportion of the Ex- 
 chequer bills, now outstanding, were to 
 be subscribed into the new stock ? On va- 
 rious occasions, the capital of the Bank of 
 England has been increased, for the pur- 
 pose of relieving the country ; and by 
 giving the holders of Bank stock, the pre- 
 ference in the new subscription, they would 
 have no just cause for complaint. 
 
 IL I am persuaded, were the Bank to 
 issue two pou7id and three pound Bank 
 notes, that it would be a great public 
 convenience, and that very few of them 
 would be exchanged into specie. Indeed 
 less gold would be required for changing 
 even ten pound notes, which is often done 
 for the sake of getting two or three gui- 
 neas, the whole sum in coin that may be 
 actually wanted by the holder of the note. 
 
 III. The increased commerce and re- 
 venue of the country, certainly demand a 
 greater increase of a circulating medium. 
 That increase can only take place either in
 
 specie, or in Bank paper. Specie, however, 
 cannot be commanded when wanted ; and 
 if paper were to be issued by the Bank, 
 in the usual Jorm, it might be immediately 
 converted into specie, and exported out 
 of the country. Might not, however, the 
 Bank obtain authority from Parliament, 
 to issue a million in notes, neither bear- 
 ing interest, nor convertible into specie, 
 until twelve months after the date ; or 
 might there not be a particular sort of 
 note, which, though issued on the 1st of 
 January 1796, might be dated on the 1st 
 of January 1797, and so on? in which 
 case it could not, till the day of its date, 
 be convertible into specie. Such notes 
 would at once pass, hy consent, without 
 discount. A union, or understanding, 
 for that purpose, among the merchants 
 and bankers of London, might be estab- 
 lished in a very short space of time. The 
 merchants might be told, that the Bank 
 would discount their bills, to any specified
 
 1 173 
 
 amount, for. the accommodation of the 
 public, partly payable in notes dated 1st 
 of January 1798, and partly in common 
 convertible notes ; and, if the due propor- 
 tion were not exceeded, such is the want 
 of money at the time, that the one kind 
 of note would pass as readily as the other. 
 If the Bank were applied to by the mer- 
 chants to issue such notes, where could 
 there be an objection to try such a plan, 
 at least during the war ? 
 
 I V. The last point I shall take the liberty 
 of alluding to, relates to the state of the 
 coinage ; that of gold in particular. While 
 we continue to make our gold coin so 
 much finer than that of other nations, 
 and almost give a bo?ius to the smelter, 
 by demanding nothing for the expence 
 of the manufacture, it is impossible that 
 our coin should not either be exported 
 abroad, or smelted down at home ; and 
 we must, of consequence, experience all 
 the evils resulting from a diminished cur- 
 B
 
 C 18] 
 
 rency. Has the Bank ever seriously taken 
 that point into its consideration, and re- 
 presented it to his Majesty's Government? 
 I thought it my duty to trouble you 
 with these hasty observations, on subjects 
 deeply interesting to us all, and should be 
 happy w^ere these hints to prove in any 
 respect useful for obviating evils, of a na- 
 ture so likely to prove in the highest de- 
 gree prejudicial to the interests of th« 
 country. 
 
 I have the honour to be, 
 with great respect. 
 Gentlemen, 
 your faithful 
 and obedient servant, 
 JOHN SINCLAIR. 
 
 Whitehall, 15 th September, 1796.
 
 c: ^9 3 
 
 LETTER II. 
 GENTLEMEN, 
 
 Understanding from Mr. Thornton, 
 that you propose taking my former letter 
 under your consideration, in the course of 
 this week, I think it right, more fully to 
 explain my ideas upon one point, namely, 
 the proposed alteration in the coinage, as 
 it is certainly one, which requires to be 
 considered in every possible point of view, 
 before it can be adopted. 
 
 I shall first state the objections wbich 
 may be urged against the proposed mea- 
 sure ; and, secondly, the advantages which, 
 may be expected from it. 
 
 OBJECTIONS. 
 
 I. That it would affect the prices of 
 goods at home. 
 
 Answer. Much must depend upon the 
 amount of the tax. If it is only five per 
 cent, it would probably make no differ- 
 B a
 
 C 20 ;] 
 
 ence, more especially if it were at first 
 restricted to gold coin. Articles bought 
 with silver would not in that" case be 
 effected by it. 
 
 II. That it would affect the foreign ex- 
 change. 
 
 Answer. This however is not probable, 
 at least whilst the proposed alteration is 
 restricted to our gold coin ; for, I believe, 
 our exchange, in general, if not altogether, 
 depends upon the state of our silver money, 
 and not our gold. That is a subject, 
 however, respecting which I have no pre- 
 tensions to be possessed of any particular 
 information, and indeed I understand, that 
 there are very few in this country, who 
 are deeply conversant in it. The only 
 publication, which, I believe, explains it 
 in a complete and satisfactory manner, is 
 one, I think, called " Krusen's Hambro' 
 " Comptorist,'' in two volumes quarto ; a 
 book of such merit and utility, that the 
 city of Hamburgh have given the author a
 
 pension for writing it. I would strongly 
 recommend it to you. Gentlemen, to have 
 that valuable publication translated, and 
 printed at the expence of the Bank, or by 
 private subscription. The city of London 
 ought now to be, what Amsterdam for- 
 merly was, the center of all the pecuniary 
 negotiations of Europe, which it never can 
 be so thoroughly as it ought to be, until 
 the subject of exchange is pretty general- 
 ly understood by our merchants, which 
 might soon be the case, were this book 
 translated. We must till then principally 
 rely upon foreign merchants, who make 
 fortunes from our ignorance of the nature 
 of exchanges. 
 
 III. That it would favour counterfeiting. 
 
 Answer. This, however, is not the case. 
 The finer the gold the more easy it is to 
 work, and consequently to counterfeit it. 
 The more alloy there is, the finer is 
 the impression, and consequently it is the 
 more difficult to imitate. The more the
 
 [ 22 J 
 
 dloy ifl th6 real coin, there is evidently less 
 profit to be obtained by the false coiner. 
 
 ADVANTAGES. 
 
 I. The profit to the Exchequer, by 
 saving the expence of the manufacture, 
 and gaining a certain sum additional. It 
 is incredible the sums which have been 
 thrown away, since the Revolution, by 
 not attending to that obvious circum- 
 stance. The principal sum that might 
 have been thus obtained, with accumu- 
 lated compound interest, would now have 
 amounted to a sum, that would stagger 
 the belief of the most credulous. 
 
 II. Mixing a greater proportion of alloy 
 would not only make it less profitable to 
 counterfeit, as has been already observed, 
 but would also be a great check upon filing 
 and sweatings and also on melting it down 
 for the various purposes of manufacture. 
 
 III. Being harder, in consequence of the 
 greater quantity of alloy, the coin would 
 not wear so fast.
 
 c 23 :] 
 
 Lastly, There would be less temptation 
 to export it, for it would not pass for so 
 much in foreign countries, as it would do 
 here ; and if it were exported, it would 
 soon come back again. Smith, in his 
 Wealth of Nations, observes, that the 
 money of the French, always came back 
 in consequence of that circumstance ; and 
 here it may be worth remarking, that that 
 respectable author recommends imposing 
 such a duty upon coinage, as would at 
 least defray the expence of the manu- 
 facture. 
 
 Before I conclude, I must take the li- 
 berty of mentioning one other point. 
 
 I understand that it would tend much 
 to encourage the importation of foreign 
 coins, both of high and of low intrinsic 
 value, ifthose whose value approached our 
 own, were allowed to pass at a fixed rate, 
 and if the others were sold as bullion ac- 
 cording to their real value. Both Am- 
 sterdam and Hamburgh carried on an
 
 immense trade with those species, as they 
 are called, which are disposed of as mer- 
 chandize by weight and standard. We 
 should now endeavour to transplant, so 
 valuable a branch of trade, from Amster- 
 dam at least, to this country. 
 
 I have many apologies to make, for 
 venturing to trouble you on subjects, with 
 which you are so much more conversant 
 than I can pretend to be ; but you will 
 ascribe it, I am persuaded, to its real mo- 
 tive, an ardent desire to contribute, by 
 every exertion in my power, to promote 
 the interests of the country. 
 With much respect, 
 
 I have the honour to be. 
 Gentlemen, 
 your faithful 
 
 and obedient servant, 
 JOHN SINCLAIR, 
 
 Whitehall, 26th Sept. 1796.
 
 CONCLUSION. 
 
 HINTS RESPECTING THE MEANS OF RE- 
 OPENING THE BANK OF ENGLAND, AND 
 RE-ESTABLISHING THE PUBLIC, AND COM- 
 MERCIAL CREDIT OF THE COUNTRY. 
 
 1 HERE are various modes by which a 
 nation can carry on its commercial trans- 
 actions, as, by barter, by means of unstamp- 
 ed bullion, and by other articles which may 
 be allowed to pass current as money, for 
 example, the leather money of Sparta ; but 
 the usual modes are, by specie, or by paper, 
 or by a mixture and union of both. The 
 last is the climax of perfection in regard 
 to the carrying on of pecuniary transac- 
 tions, and beyond which it is impossible to 
 go. It is to that fortunate union, that the 
 commercial and financial prosperity of this 
 country may justly be attributed. 
 
 In regard to coin being the only repre-
 
 [26 3 
 
 sentative of property, or, as some call it, 
 the circulationg medium ; such a plan is 
 not for the interest of a country not pos- 
 sessed of the precious metals within itself. 
 If we require a circulation of sixty mil- 
 lions in money, and have no mines of gold 
 and silver of our own, we must export 
 sixty millions worth of goods in order to 
 procure them ; whereas, by having one 
 half in specie, and the other half in pa- 
 per, thirty millions worth of goods are 
 saved, which w^ould otherwise have been 
 exported and thrown away, for procuring 
 merely a medium of commerce. 
 
 Having nothing but paper money in a 
 country, is attended with disadvantages of 
 a different nature. In the first place, it is 
 extremely difficult to limit the quantity of 
 paper to be issued, and to keep it within 
 due bounds. The coining of paper money is 
 too great a power to be intrusted either to 
 individuals, or to those who govern a na- 
 tion. It is also liable to forgery. In a state
 
 connected with other commercial coun-. 
 tries, it is necessary that it should have 
 money that will not only pass within it- 
 self f for which, to a considerable extent, 
 paper may be sufficient,) but also some 
 species of money, according to the acknow- 
 ledged value of which it can traffic with 
 other nations. In Sweden, and in several 
 of the States of America, where paper 
 money has been tried on a great scale, 
 they have found it absolutely necessary 
 to confine it within narrow bounds, or 
 totally to prohibit it ; and the consequence 
 of issuing assignats in France, ought to 
 be a warning to us, to avoid splitting upon 
 that rock on which our neighbours have 
 suffered. 
 
 The true plan, therefore, is, that under 
 which this country has so long prospered ; 
 namely, that of having a due proportion of 
 coin and paper, the one convertible into 
 the other at a moments notice, according 
 to the pleasure of the holder ; and this
 
 and this leads me to state the plan of 
 arranging measures, for opening, without 
 a moments unnecessary delay, the Bank 
 of England, which, besides other advan- 
 tages, will prevent our being inundated 
 with paper, (which must be the neces- 
 sary consequence of the Bank's continuing 
 shut for the circulation of specie, and open 
 for that of paper) ; and we shall thus be 
 enabled to look our enemies in the face, 
 and re-establish our weight and credit on 
 the Continent. 
 
 The plan I take the liberty of submitting 
 for that purpose^ may be considered under 
 the following heads. I. How to remove 
 the suspension on the Bank. II. How to 
 fill up the vacuum occasioned by any de- 
 crease of Bank notes. And, III. How to 
 prevent the risk of such calamities in future. 
 
 The necessity of suspending the pay- 
 ment of cash at the Bank, can only be at- 
 tributed to its having too large a propor- 
 tion of paper in circulation, compared to
 
 i: 89 3 
 
 the amount of its specie. The notes in 
 circulation, let us state, for the sake of 
 round numbers, at ten millions * Let 
 us suppose that the Bank could be re- 
 opened, if instead of ten, it had only 
 five millions of notes in circulation. It 
 has been proposed that Government 
 should repay the Bank its advances to that 
 amount ; but from the situation of the 
 public, the payment of so large a sum, in 
 addition to all the other demands upon it, 
 cannot be expected ; though the more it 
 can pay, the more it will enable the Bank 
 to assist the merchants with discounts. 
 But it will answer exactly the same pur- 
 pose, if the Bank w ere to increase its capi- 
 tal to the amount of ten millions, to be 
 paid one half in Bank notes, which would 
 
 • It is supposed, that the Bank notes in circulation do 
 not exceed nine millions, and that there are from three to 
 four millions due by the Bank to the Accountant General, 
 and to private individuals on drawing accounts, making 
 a total of from thirteen to fourteen millions. But I 
 thought it right to state the amount of Bank notes rather 
 high, than otherwise.
 
 C so 3 
 
 thus be taksn out of circulation, and the 
 other half, in Exchequer bills, and other 
 Government securities. The sum would 
 be subscribed in one day, as Bank stock 
 bears an interest of seven per cent. This 
 dividend the public ought to guarantee^ dur- 
 ing the continuance of its charter, as its 
 advances to the public has undoubtedly oc- 
 casioned its present difficulties. It would 
 also be necessary to give the proprietors 
 of the old stock, in proportion to their re- 
 spective interest, a share in the new sub- 
 scriptions. By adopting this plan, the 
 Bank of England might be opened in the 
 space of a few weeks. 
 
 As a proof that this plan is not only 
 practicable, but that its effects may be 
 depended upon, I beg leave to refer to 
 an account of an operation on similar 
 principles, which took place about a cen- 
 tury ago, extracted from the History of 
 the Revenue of the British Empire. 
 
 " In consequence of this inquiry, and
 
 " in order to clear the market of part of 
 *' a load then so much in disrepute ; not 
 " without hopes also, by such means, of 
 *' restoring the credit of the nation, then 
 " at the lowest ebb, an act was passed,* 
 ** for enlarging the capital of the Bank of 
 ** England, by ingrafting upon its stock 
 " new subscriptions, four-fifths of which 
 " were to consist of Exchequer tallies, 
 ^* and the remaining fifth in Bank notes ; 
 *' and Government agreed to allow inte- 
 " rest, at the rate of eight per cent, upon 
 " such tallies, until they were paid off". — 
 " The term which had been granted by 
 " the Bank was also prolonged to the ist 
 " of August, 1710; and during the con- 
 " tinuance of the corporation, no other 
 " bank or fellowship of that nature was 
 " to be erected, suffered, or countenanced, 
 " by act of Parliament. It was expected 
 " that jf 3,600,000. would have been in- 
 " grafted ; instead of which, the subscrip- 
 
 • 8 Will. cap. 20.
 
 C 32 3 
 
 " tions amounted only to jT 1,001,171. 10s. 
 " But eyen this operation, though on a 
 " smaller scale, was attended with consi- 
 " derable advantage : for about jT 2 00,000. 
 ** in Bank notes, and -jf 800,000. in tallies, 
 " being thus sunk by the new subscription, 
 " the credit both of the Bank and of the 
 " public began to revive ; notes without 
 *' interest came to be on a par with specie; 
 " money began to circulate on very mo- 
 " derate terms; and the exchange with the 
 *' Continent,from being very unfavourable, 
 " was soon brought to an equality/'* 
 
 By following the same plan, upon the 
 present occasion, similar effects may be 
 expected. 
 
 The only objection to this measure is, 
 that five millions of paper, representing 
 property, being thus taken out of the 
 market, some means must be contrived 
 to fill up the vacuum. One mode might 
 
 * Hist, of the Revenue, Part 3. p. 24.1. — See also Life 
 of Halifax, p, 40. It appears that the whole plan vv^as 
 contrived and conducted by that judicious statesman.
 
 C 33 1 
 
 be to procure an additional quantity of 
 specie, which however cannot at once be 
 obtained ; another, to issue state notes, or 
 Exchequer bills, on an improved plan, to 
 that amount ; but though that would be 
 a productive resource to the government, 
 yet such is the risk of entrusting ministers 
 with the power of coining paper, that 
 hardly any advantage can compensate for 
 the mischiefs it might occasion. It would 
 soon be found, that state notes would be 
 rapidly multiplied beyond all reasonable 
 bounds. The plan, therefore, that I would 
 prefer, would be, that of licensing the 
 bankers of London, and other large towns, 
 to issue notes to that amount, finding pro- 
 per security to Commissioners appointed 
 by the public, like the Exchequer Bill 
 Commissioners, and permitting the notes 
 issued by such licensed bankers to be re- 
 ceived in the payment of taxes during the 
 war. This, with the credit to be derived 
 C
 
 C 34 H 
 
 from the security given, would enable 
 them to discount the bills of the mer- 
 chants, and to keep up the pecuniary cir- 
 culation of the country. 
 
 In regard to the third point, that of 
 preventing the risk of such calamities in 
 future, the only mode is, by altering the 
 principles on which our coinage has been 
 conducted, so as to check its being either 
 smelted at home, or exported to other 
 countries. 
 
 The great object however is, to open 
 THE Bank of England, and to enable 
 it to carry on its pecuniary transactions, 
 to the extent which its resources will ad- 
 mit of, on the solid principle of giving 
 either coin or paper, in the option of the 
 applicant. Until that is done, neither 
 public nor private credit, nor agriculture, 
 nor commerce, nor manufactures, nor the 
 income of the nation, can go on prosper- 
 ously. That Bank was the pivot on which
 
 C 35 3 
 
 depended the commercial prosperity, not 
 only of this country, but of every other. 
 The failure of any great mercantile house, 
 in any part of the continent, it is well 
 known, has always been felt by the whole 
 commercial world, wherever they were 
 situated ; and it is only by restoring the 
 credit of the Bank, that center of uni- 
 versal commerce, by increasing its capi- 
 tal, and enabling it to confine its circula- 
 tion within due bounds ; and, above all, 
 by separating for ever the Government 
 and the Bank, so that the latter shall not 
 be a mere political engine, for the coinage 
 and circulation of paper, under the con- 
 troul and direction of the other, that we 
 can ever expect to see this country re- 
 stored to its former enviable situation. — 
 "Whilst a fatal suspension hangs over the 
 payments of the Bank, it will not be in 
 our power to carry on the war, if it must 
 continue, with that vigour and energy
 
 which becomes so powerful a country; 
 whereas, the re-opening of the Bank of 
 England, from the effect it must have on 
 the councils of the enemy, would be the 
 harbinger of peace.
 
 ■'jM
 
 
 
 .0i&
 
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