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 LIBRARY 
 
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 A LET T E R 
 
 V 
 
 TO 
 
 LORD ARCHIBALD HAMILTON, 
 
 ALTERATIONS IN THL VALUE OF MOxNEY; 
 
 AND CONTAINlNCr 
 
 AN EXAMINATION OF SOME OPINIONS RECENTLY 
 PUBLISHED ON THAT SUBJECT. 
 
 " Now let me suppose that for forty years no access could toe got to the standard measures 
 " at the Exchequer, that during this time all the measures of the nation should be debased ; 
 " that notwithstanding this, the landlords over all England should cuMinue to stipulate 
 '* their rents in grain by the debased bushel of their respective counties : if after forty years 
 " of such confusion, the Exchequer should be opened, and all measures fitted to the stand- 
 " ards, would it not be a horrid piece of iryustice not to allow Ixith landlords and farmers 
 " who had entered into leases within the forty years, the liberty of converting their rents 
 " from the debated to the standard bushel."— Sir Ja.m£s Stevart's Inquiry into the Prin- 
 ciples of Political Economy. 
 
 LONDON: 
 PRINTED FOR J. RIDGWAY, PICCADILLY. ^ 
 
 1823. 
 I Three Shillings and Si. ' pence. ^
 
 Printed by T. C. Hanaard, Petefbofough Court, Fleet Street, tondoo.
 
 XT was not, until after the former part of the sub- 
 sequent pages was placed in the hands of the printer, 
 that the pamphlet of Mr. Blake was published, entituled 
 *' Observations on the Effects produced by the Ex- 
 " penditure of Government, during the restriction on 
 ** Cash Payments ;" with some remarks upon which 
 pamphlet, the second part of this Letter is occupied. 
 
 Mr. Blake's is the second of two systems, or theo- 
 ries of prices, which have been recently given to the 
 public, maintaining, both of them, that prices may be 
 advanced, without money becoming depreciated in 
 value ; monied prices rise, and yet money not fall ; 
 and arriving at this conclusion, by different processes, 
 and by methods of reasoning inconsistent with, and 
 opposed one to the other. Mr. Tooke, in his " Thoughts 
 *' and Details on Prices," would confine the deprecia- 
 tion of our late paper money, to that extent to which 
 the price of bullion advanced. Mr. Blake rejects de- 
 preciation altogether, and maintains, in substance, that 
 the money of 1814, is to be held as having been of as 
 high a value, as is the money of the present time.
 
 The following pages contain some remarks on both 
 these systems. Mr. Blake is correct in rejecting bul- 
 lion as either a measure of depreciation, or as a proof 
 of it. On this branch of the question, it will be found, 
 that the arguments made use of in the former part of 
 the subsequent pages, coincide very materially with 
 those of Mr. Blake. 
 
 London, 
 April 2% 1823.
 
 A LETTER, 
 
 My Lord; 
 
 X HESE observations upon the present state of the question 
 concerning the currency, I take the liberty of addressing to your 
 Lordship, whose attention has been so much directed to the 
 important character of that question. They have been drawn 
 up amidst many other avocations and engagements : but I trust 
 they may succeed in placing in an intelligible point of view, the 
 nature of some prevailing errors, and may advance in some degree 
 a just understanding of this subject. To discuss a question of 
 this nature, at once hastily, and with precision, is a task of 
 considerable difficulty ; and one which I am perfectly sensible, 
 that it is not here accomplished. 
 
 The first branch of this question as generally agitated Is, 
 what we mean by the term " depreciated money ?" Mr. RIcardo, 
 and with him Mr. Tooke, tell us, that it is paper money, SI. 
 17.S lOid. of which will not buy an ounce of gold bullion, and 
 that by so much more as it requires for that purpose, by so much is 
 the paper depreciated. These gentlemen, however, after ex- 
 plaining what they mean by depreciation in this sense, in- 
 variably use that term in another and a more extensive sense. It 
 is necessary, therefore, to explain this part of the question dis- 
 tinctly ; and to show in what sense this meaning of the term de- 
 preciation is to be admitted ; and how far It Is false, or has been 
 misapplied, and has led to erroneous conclusions. Mr. Tooke, 
 who has recently published a work on the subject of money, has 
 given an exposition of his views on this point, at the outset, 
 in the following >)assages, part of which it will be advisable to 
 
 B
 
 state, somewhat more at length than he has done, and with 
 somewhat more of explanation than he has given : 
 
 " By depreciation of the currency, I mean that state of it in 
 ** which the coin is of less value in the market, than by the 
 " mint regulations it purports to be, or in which the paper 
 " which is compulsorily current, is of less value than the coin 
 ** in which it promises to be payable." 
 
 " If there be standard gold for sale in the market which the 
 " holder of bank-notes, not convertible at the Bank can buy, 
 " the difference between the quantity which he can thus obtain, 
 " and that which the paper promises, but does not pay, clearly 
 " constitutes the utmost limit of depreciation of the paper/' 
 
 And again — 
 
 " In a perfect state of the coin, provided the exportation and 
 " melting of it be allowed, there cannot, it is evident, be any 
 " excess in the market above the mint price of the metal. It is 
 " possible in such a case, that the coin may even without a 
 " seignorage be more valuable than bullion ; but it is utterly 
 " inconceiveable that it should be less valuable : if, therefore, 
 " in such a state of the coin, there be in general circulation 
 ** bank-notes, which, by law or custom, pass current in all 
 *' transactions ; and if under these circumstances the market 
 " should be above the mint price of gold — the whole of the differ- 
 " ence would constitute the exact measure of the depreciation of 
 *' the paper."" * 
 
 This last passage is involved in considerable obscurity ; and it 
 is necessary to state in more distinct terms, and with some ex- 
 planation, the meaning which it appears intended to convey. " In 
 " a perfect state of the coin, provided the exportation and melting 
 " of it be allowed, there cannot, it is evident, be any excess of 
 " the market above the mint price of the metal." This is true, 
 and the reason is as obvious. In a perfect state of our coin, SI. 
 17s. '[Oid. of coin contains an ounce of gold. If the melting of 
 this coin be allowed, no man, whatever his want of bullion might 
 be, would give more than 3/. lis. lO^d. of gold money for an. 
 ounce ; because by melting that amount of money, an ounce of 
 
 * See " Thoughts and Details on the High and Low Prices of the last 30 
 
 reais," Iby TJicmas Tooke. e^q . p. 10, &c.
 
 bullion would be obtained. '* It is possible in such n case, that 
 *' the coin may be more valuable than bullion : though it is 
 *' utterly inconceivable that it should be less so/' An extra- 
 ordinary supply of bullion might sink the niarkct price below 31. 
 lis. lOid.f might render coin more valuable than bullion ; al- 
 though, as we have seen, an extraordinary demand for bullion 
 could not raise that price above 3/. 17f. 10|c?. There is a defi- 
 ciency in this passage which it is better to supply. When it is said, 
 that coin may be more valuable than bullion, the words " provided 
 the mint be not open to coinage," ought to be added. The 
 mint being open, and coinage free, the market price of bullion 
 can no more sink below the mint price, than it can rise above it, 
 when melting is allowed. No man will sell his ounce of bullion 
 for 31. 15s. or 31. ISs, whilst the mint will return him 3/. 17s. 
 lO^d. for it ; any more than he will consent to pay for bullion 
 41. 5s. or 4/. 10s. an ounce, when he can procure an ounce by 
 melting SI. lis. 10~d. of coin. An extraordinary supply of bul- 
 lion, therefore, cannot lower the market below the mint price, 
 when coinage is free ; nor can an extraordinary demand for 
 bullion raise the market price above the mint price, when 
 melting is allowed. This is the well known maxim of Locke, 
 An ounce of gold, of a certain weight and fineness, must always 
 be equal in value, said that writer, to another ounce of gold, of 
 the same weight and fineness ; and the mere circumstance, of one 
 of these ounces being marked with a stamp of designation, will 
 not alter its value, as compared with the other that is unstamped. 
 Certainly it will not, if the stamp can be imposed without cost, 
 and effaced without penalty. " If therefore," proceeds Mr. 
 Tookc, " in such a state of the coin, there be in general circu- 
 " lation bank-notes, which by law or custom pass current in all 
 " transactions : and if, under these circumstances, the market 
 '* should be above the mint price of gold, the whole of the dif- 
 ** ference would constitute the exact measure of the depreciation of 
 " the paper." It is necessary to understand here, what is meant by 
 the words, "bank-notes which by law or custom pass *' current'' 
 If these words be meant to designate a paper money, payable in coin 
 on demand, the proposition is destitute of meaning. The market 
 price never can be above the mint price of gold, in such bank-notes, 
 under the circumstances thus stated. Paper payable in coin ou
 
 demand, can never be of less value than the coin for which it is 
 exchangeable, nor can coin, as has been already seen, be of less 
 value than the weight of bullion which it contains. But, if it be 
 meant to speak here of a compulsory paper money not payable 
 in coin, then this proposition iswithoutany foundation in thereason- 
 ing which precedes it ; and is, in point of fact, false. Such a 
 paper money stands on the same footing, as far as this argument 
 is concerned, as coin which is not allowed to be melted or ex- 
 ported ; and in such coin the market price of bullion might rise 
 above the mint price; as it might fall below the mint price, if 
 coinage were not allowed ; and neither of these cases be either a 
 consequence or proof of a variation in the value of money. Money 
 itself might continue invariable in value, under both circumstances, 
 and be neither enhanced in value, when bullion fell through an 
 extraordinary supply ; nor depreciated when bullion rose through 
 an extraordinary demand. The circumstance which equalizes the 
 price of bullion with that of coin, is the convertibility of one into 
 the other without difficulty or expense. This is acknowledged 
 by this writer himself, when he states, that those slight impedi- 
 ments which, before the Restriction act, were opposed to 
 the melting and exportation of our coin, did at times occasion a 
 slight advance of the market above the mint price of gold, such 
 advance not being occasioned by any depreciation of money ; and 
 it from thence follows, that if those difficulties had been greater, 
 if the risk and penalty of melting the coin had been heavier than 
 they were ; by so much the more might the market price have 
 then advanced beyond the mint price of gold; without any de- 
 preciation, or lessened value of the currency ; and an inconverti- 
 ble paper money stands, in this respect, on the same footing as 
 coin, the protection of which by law is perfect ; and which is 
 prevented altogether from being melted or exported. 
 
 The argument, therefore, stands thus : " In a perfect state of 
 " the coin, if the melting and exportation of it he allowed^ there 
 " cannot be any excess in the market, above the mint price of 
 " the metal." And to this we may safely add, that whether the 
 coin be perfect or imperfect, as long as the melting and exporta- 
 tion of it be allowed, the price of bullion can never advance 
 beyond the value of the metal which the coin contains. But, 
 neither the one nor the other of these propositions, are in any
 
 way connected, with the conclusion which is here drawn from the 
 first of them. These propositions relate to a coin that is allowed 
 to be melted or exported. They have no reference to a coin, 
 the melting and exportation of which is opposed by considerable 
 difficulties. But an inconvertible paper, is coin which it is im- 
 possible either to melt or to export. There is no ground 
 therefore, adduced here, to show that an excess in the market 
 price of bullion, above the old mint price, is, when esti- 
 mated in an inconvertible paper, any proof whatever of the de- 
 preciation of such paper ; and much more there is no reason 
 here given to prove that it is a measure of the rate of such de- 
 preciation. 
 
 The value of money, its uses or exigencies remaining the 
 same, rises or falls with a diminution of, or an addition to its 
 quantity. It is the same with bullion, and with all other things 
 which pass in exchange from man to man. But in all countries 
 money is commonly formed of bullion, and is commonly capable 
 of beinff converted from one form to the other, from bullion into 
 coin, and from coin again to bullion, with no difficulty or expense. 
 Coin and bullion, therefore, are commonly seen under all circum- 
 stances of variable supply or demand, to rise or fall in value 
 together. If an extraordinary supply of bullion should take place, 
 and bullion tend to cheapness, it would be converted into coin, 
 would increase the quantity of coin, and both become cheap 
 together. If an extraordinary demand for bullion happen, it would 
 be supplied from the coin, the quantity of coin lessened, and both 
 bullion and money become more valuable than before. They 
 would become more valuable in reference to all other things ; 
 they would exchange for greater quantities of goods ; the prices 
 of goods would fall ; but money and bullion would preserve their 
 former relative value to each other. But this is not a necessary 
 condition of money : money may be limited in its quantity, and 
 not permitted to increase with an additional supply of bullion ; 
 or it may be protected in its circulation, and not allowed to 
 diminish with a demand for bullion; or it may be formed of 
 other materials than bullion ; and its plenty or scarcity be made to 
 depend on circumstances entirely independent of the precious 
 metals. If a greatly increased supply of bullion were to 
 arrive for a great number of successive years, in this or in any
 
 () 
 
 country; and the mint were during this period hermetically 
 sealed, and no addition permitted to be made to the quantity of 
 money, the consequence would be, that in such country the value 
 of money, its quantity neither increasing nor diminishing, would 
 remain invariable ; but the price of bullion would progressively 
 fall in the market. Bullion might continue to fall in price, 
 and money still to remain of an invariable value for ten 
 years, or for twenty years, or for centuries ; if the institutions 
 and the regulations, as to its money, of that country, should 
 remain fixed and unaltered. Bullion might fall ; it might fall 
 from St. 17s. lOfc/. to 3/. to 2/. to 1/.; and money still continue 
 perfectly invariable in value. Bullion, speaking as we now speak, 
 would be said to fall 100, 200, 300, or 400 per cent below the 
 mint price. So, on the other hand, if a great demand for bullion 
 should take place in any country, or in all countries ; if, during 
 the present century, the whole of that bullion should be drawn 
 back by America from Europe, which was drawn by Europe from 
 America, during the sixteenth century and the seventeenth (such 
 a case may be imagined for the purpose of explanation), the 
 consequence, as every one can tell, would be to occasion a great 
 fall of prices and an increased value of money in Europe. But if, 
 under these circumstances, any particular country were to put in 
 force severe laws, vigilantly executed, against the melting and 
 exportation of its coin, and were to succeed, by such means, in 
 preventing the quantity of its coin from being diminished ; in 
 tbat country the price of bullion might advance above what would 
 be called perhaps the mint price, 100, 200, 300, or 400 per 
 cent, whilst there would take place no depreciation or lessened 
 value of money, and whilst money continued perfectly invaria- 
 ble. According to our present method of expression, it would 
 be said that in one of these instances gold had risen above the 
 mint price, and, in the other instance, that it had fallen below 
 it; but that manner of expression confounds things essentially 
 different. We used it during the TJestriction act. We said, 
 gold has advanced 10 or 20 per cent above the mint pride. But, 
 during that period, the mint gave no price nor paid any ; there 
 was no mint price. We referred to an open state of the mint ; 
 to a state of things in which bullion and m.oney increased aliH 
 diminished in quantity and value together ; -and we attempted to
 
 measure by bullion the value of a money, neither depending on 
 bullion for its increase or its limitation, any more than upon 
 iron ; and of the value of which the one formed no more a mea- 
 sure than the other. The money of the Restriction bill had no 
 connexion with the mint. When we opened the mint again, 
 and re-established money on a basis of bullion, we made a 
 change, which did not consist merely in increasing the value of 
 our money to a certain extent, according to a scale, of which we 
 were in possession, which was the nature of the operation in the 
 time of king William ; the present has been a change in the basis 
 and character of our money altogether. It was not an addition to a 
 bullion money deficient in weight or fineness, of a certain further 
 portion of bullion ; the substitution of money of a greater weight 
 for money of a lesser weight ; but our change was from a money 
 purely of paper, to a money purely of bullion ; from money resting 
 on a paper basis, to money resting on a metal basis ; and of the re- 
 lative value of the two we possessed no scale, or just estimate, nor 
 desired any. The operation was of the first necessity to be effected ; 
 but, in order to carry that change into effect without derangement 
 to property, and a violation of the faith of contracts ; it was neces- 
 sary to proceed upon a just estimation, if possible ; and, if not, upon 
 the best estimate capable of being formed, of the relative value of 
 the two mpnies, in one of which we purposed to discharge contracts- 
 which had been made in the other. That estimate could alone 
 be formed from aii extensive, accurate, and laborious examination 
 of the different monied prices which each description of money had 
 given for necessaries and for labour : and, upon a scale so formed, 
 ought the mint to have been re-opened and a metal money re-estab- 
 lished ; possessing a value, as it then would have done, not indeed 
 perfectly, but so nearly corresponding with that of the paper money 
 abandoned, as to have prevented all considerable derangement, 
 distress, or injustice, from accompanying that measure most im- 
 portant indeed, but the main importance of which was lost sight of. 
 Mr. Ricardo, therefore, with Mr. Tookc, and all those who 
 define with them, the term " depreciation," when applied to 
 the money of the llcstriction bill, as a price of bullion 
 higher than that which the mint formerly gave for bullion, 
 are at liberty so to explain their meaning ; as all men are entitled 
 to fix the sense in which they understand their own terms, and
 
 in which they desire them to be understood. And the term 
 " depreciation of paper,^' being taken to raean an advance in 
 bullion beyond 31. 17s. lOid. an ounce, then undoubtedly the 
 rate of the advance, is the measure of the depreciation. The 
 existence and extent of depreciation, the term so explained, is so 
 undeniable and obvious, that it has been a waste of words in these 
 parties to attempt to prove either by argument. We possess 
 tables of the price of bullion. There is no material difference 
 of opinion as to their accuracy ; and we have only to form from 
 these tables our scale of depreciation. This Mr. Tooke has done. 
 The estimate of depreciation which it gives him, is about 4 per 
 cent for 12 years, counting from 1797, and of 20 per cent, for a 
 further period of 5 years : and to this estimate must be added a 
 further depreciation of c), 4, or 5 per cent, during part of the 
 years 1817, 1818, and 1819. But those who define the term 
 depreciation in this sense, are not to be permitted to use that 
 term in another sense. After forming a scale of depreciation, 
 from the difference between paper and bullion, they apply that 
 scale to what is properly called depreciation ; that is, to the 
 extent to which paper has sunk in value, with reference to 
 property and commodities. Mr. Tooke referring to this scale 
 of the difference between paper and bullion, does not scruple to 
 charge with extravagance those who maintain that paper fell at 
 any time in value, with relation to property and commodities, to 
 a greater extent or to a lesser than that scale indicates : and for 
 this he has no better ground than a confusion in the meaning of 
 the term depreciation, defining it in one sense and using it in 
 another. The term " depreciation," as applied to money and 
 currency, has not necessarily/ or properly any such exclusive 
 meaning as is thus ascribed to it. Sir George Shuckburgh 
 published his table of depreciation in 1795 prior to any advance 
 in the price of bullion above the old price of the mint ; and he 
 called it, a Table of the depreciation of money, from the 
 Conquest to that time, as inferred from the prices of the prin- 
 cipal necessaries of life. Depreciated money signifies, pro- 
 perly, money lowered in value, become cheaper in reference to all 
 things, against which money exchanges. The estimation of the 
 extent of an alteration in the value of money by a scale drawn from 
 the price of a particular commodity, such as bullion, is false in its
 
 9 
 
 pilnciple ; and we shall see to what absurd contradictions it would 
 lead us in point of fact. The last years of that period of 17 years, 
 the depreciation of which is thus on this ground estimated, bring 
 us down to 1814 and 1815. If we take the table of bullion 
 as our guide for the rate of the depreciation of money in those 
 two years, we find the price of bullion to have been, in March 
 1814, 51. 10s. an ounce, or about 40 per cent above the old mint 
 price; in October 1814, 4/. 6s. or about 10 per cent; in 
 April 1815, 51. 7s. ; in October 1815, 41. Ss. ; and in 
 December 1815, 4/. 2s. Can it be maintained, then, that our 
 currency rose and fell in value, during this period, with these 
 fluctuations in the market rate of bullion .'* Those fluctuations 
 were entirely unconnected with any corresponding alterations in 
 the value of money. They were occasioned by great and sudden 
 variations in the demand for bullion ; the market being but 
 scantily supplied ; and with these variations bullion rose and fell 
 in price, precisely as any other commodity would have risen, and 
 again fallen, under similar circumstances. Between bullion, and 
 money composed of bullion, v/hich is legally convertible into 
 bullion again, there exists an indissoluble union as to price. A 
 demand for one is a demand for the other; and, as exchangeable one 
 against the other, their relative price cannot, as we have already 
 seen, undergo variation. But there exists, as we have also seen, 
 no more connexion between bullion and an inconvertible paper 
 money, than between that money, and iron or tallow. The 
 plenty, or the scarcity of the commodity, does not influence the 
 degree of plenty or of scarcity of such money. Its sudden advance 
 or sudden fall, indicates the presence of no action on money cor- 
 responding, or connected, with either. 
 
 If the two Committees of 1819, had commenced their sittings 
 in March, 1814, bullion being then at 5/. 10s., Mr. Tooke, and 
 with him, Mr. Ricardo, must have informed them, that a de- 
 preciation of money existed to the extent of 40 per cent, and that 
 a fall of 40 per cent on commodities and property, must accom- 
 pany the introduction of the old standard. 
 
 In October of the same year, these Committees, continuing 
 their sittings, wouldhave heard of a state of things greatly ditl'crent. 
 They would have learned then, that no depreciation existed 
 beyond 10 per cent; that it would rcc^uire no inconvenience, 
 
 C
 
 10 
 
 suffering, or injustice, to be inflicted, beyond a fall in prices to 
 that extent, in order to bring them home to that desired goal, of 
 which, as Mr. Peel observed, in 1819, the country |had lost 
 sio-ht for two and twenty years ; and to which, but loaded with 
 debts and taxes, it was slowly endeavouring to return. 
 
 Six months afterwards, in April 1815, the Committees would 
 have heard again of a further depreciation, and of a fall of prices 
 of nearly 40 per cent ; interposed between the country and that 
 old metal standard of 3/. 17-5. lO^d., the object of such earnest 
 and exclusive desire. October would have presented another 
 prospect ; but it is not necessary to explain further the absurdity 
 of measuring the value of an inconvertible paper money, by a 
 reference to the market rate of a particular commodity. It is 
 desirable, however, to observe here, although there will be occa- 
 sion presently to return to that circumstance again, that when 
 these Committees, in 1819, estimated by the value of bullion, 
 with so much minuteness, the addition which the old metal 
 standard would make to every debt, tax, pension, salary, lease, 
 and contract for money, throughout the kingdom, the market 
 price of that particular commodity from which they formed this 
 estimate, was under the derangement following necessarily from 
 seven millions of bullion having been thrown on the market, 
 with the object, as it would appear, of keeping down its price. 
 
 It is only after a very long interval, that an observation of the 
 bullion market, even when exempt from the influence of peculiar 
 circumstances affecting its demand or supply, could be relied on, as 
 affording an estimate of the rate of any depreciation which had 
 taken place in an inconvertible paper money. The true 
 measure is the advance of property, commodities, and labour. 
 Adam Smith took the value of money from the price of wheat, 
 produced at all times with a nearly equal degree of labour; and 
 with the price of which, the price of labour permanently corres- 
 ponds. When wheat, therefore, on an average of years, appeared 
 to have risen or fallen in money price, it did not appear to him 
 that wheat had become dearer, or had become cheaper. He has 
 well explained that common error. It is money which, under 
 such circumstances, must be taken to have altered in value. Sir 
 George Shuckburgh's table of depreciation proceeds on a similar 
 principle. He took labour and necessaries generally, as the
 
 11 
 
 basis of his calculation of the varying value of money. " Bread 
 " corn," said Mr. Horner, speaking on this suhject, and 
 recognizing this principle, " is the paramount and real standard 
 ** of all value," An advance or fall in monied prices is, and 
 ever must be, a fall or advance in the value of money. The 
 author of the publication referred to, though he commences with 
 asserting, that the price of bullion gives an accurate measure of 
 the value of the restriction money ; pursues his argument in a 
 manner manifestly inconsistent with a conviction of the truth 
 of that maxim. He engages in a discussion, admitting in 
 principle, that during the restriction, bullion was subject to be 
 influenced in its price by a variety of circumstances ; and to be 
 in that manner warped from its character of a standard, and dis- 
 qualified as a measure of the value of the currency, llespecting 
 the extent to which those circumstances which operate peculiarly 
 on the price of bullion, did in reality allcct that price, it would 
 afford little advantage to oppose conjectures one against the other 
 on this subject. We are in possession of some facts of a ma- 
 terial character, on this part of the subject : but the main question 
 is, what were the prices which the money of the Restriction act 
 gave for property, for goods, and labour ; as compared with the 
 prices for all these, of the money which it supplanted ? and on 
 this question this waiter does at length partially enter. 
 
 On this question, in the treatise before us, a statement as to the 
 fact is first made, opposed to all that has been hitherto believed 
 to be the real state of the facts by both sides ; and next, a 
 theory is proposed which rests on this statement, and which is 
 new, as it would appear, to the proposer himself; for it is not 
 enumerated amongst those causes, to which, at the outset, he as- 
 cribes the fluctuations in prices of the Restriction act. 
 
 It is contended, first, That during a long period, dated from 
 the Restriction act ; that is, as is here taken, from 179T, to 
 about 1807 or 1808, there did not in reality take place any 
 material advance of prices in general. What is meaiit to be 
 affirmed on this head, appears to be, that tlie advance of prices 
 during this period, was about 4 per cent, corresponding with the 
 advance in bullion. 
 
 Next, that about the years 1807 and 1808, wc arrived at 
 what is termed a new epocha ; in which a great, and cxtraor-
 
 12 
 
 dinary advance in prices generally, was suddenly witnessed : and 
 that the years 1810 and 1811, presented another period, in 
 which prices as suddenly and as greatly fell. Both the advance 
 and the decline in prices thus described, are referred for their 
 cause to an expansion first, and next a contraction, of private 
 paper and credit ; originating, the first in a scarcity of commodi- 
 ties, and the next in a redundance. A scarcity taking place in 
 particulararticles, frequently inducesmany persons to purchase those 
 articles, in the hope of a speculative advance. This speculation 
 occasions much paper to be created, and many money transactions 
 on credit, and by thus increasing the quantity of paper, causes 
 prices to advance generally ; but this expanded paper soon again 
 contracts, the speculation is at an end, prices again fall, and the 
 value of money is restored. This kind of operation, not peculiar, 
 as it is stated, to the period of a Restriction act, is given as the 
 principal cause of a great advance of prices, estimated to have 
 taken place in 1S07 and 1808, and of as great a fall in 18J0 
 and 1811. A second rise and fall of prices thus proceeding, 
 distinguished, it is said, a second period, dating from the end of 
 1811, and extending to 1814 and 1815. And lastly, a third 
 and similar operation, occasioned that great advance of prices 
 and depreciation of money, which commenced in 1816; and 
 that decline which commenced in 1817 and 1818; and which 
 has reduced prices to their present level. 
 
 That the prices of all commodities are subject to great varia- 
 tions, under all circumstances, we need not be told. These 
 fluctuations in price, would, in all probability, be more frequent 
 and violent, during the period of a depreciating money, and for 
 some time after its depreciation, than in ordinary times. During 
 the war, the channels of commerce were often suddenly closed, 
 and again suddenly opened ; and thus would be necessarily pro- 
 duced great variations in the prices of articles of merchandize. 
 This is admitted ; but the main fact is, although this writer, 
 busied in the details of these fluctuations and in endeavouring to 
 combine them into a system, has lost sight of it ; that these 
 fluctuations did not stay the progress of a great and unex- 
 ampled average advance of prices ; that when we arrived at 
 the year 1814, and looked back over the 7 years preceding it, 
 we found (as is not denied as far as regards this period at least)
 
 13 
 
 that there had been paid for the average of that period, for all 
 the necessaries of life, the principal articles of consumption, and 
 for labour, a price in money which was double the rate of any 
 price that had ever been paid in this country, or in any other, 
 in money composed of the precious metals. There might be 
 great fluctuations ; but the average rise during this period was 
 great and progressive. The wave at times, perhaps, subsided 
 violently ; but the flood steadily advanced. 
 
 But before 1807 or 1808, it is said, there took place no 
 material advance of general prices; and on that assumption the 
 theory now examined rests ; this being the period when those 
 new circumstances, and that new system now described, are taken 
 to have come first into action. Up to that time prices are left 
 to the influence of pure depreciation, and as that depreciation 
 appears to be 4 per cent, on an average of 12 years, by the 
 bullion measure, so Mr. Tooke is compelled to contend, that 
 no general advance of prices greater than 4 per cent, had up to ~ 
 that time taken effect. 
 
 All those who have examined tables of prices during 
 this period, and who have taken publicly any share in the dis- 
 cussions of these subjects, have formed conclusions directly the 
 reverse of this. But as the whole of this system rests on this 
 estimate of facts ; and as the fact, if it were true, would be one 
 of considerable importance, it is but candid to inquire into the 
 manner in which it is established. It is in answer to the argu- 
 ments of a writer in the Quarterly Review, that those grounds 
 are explained on which it is believed that no material advance 
 of prices took place, prior to the expansion of money of 1807 
 and 1808. The writer in the Review it appears, contended that 
 a great and progressive advance of prices commenced with the 
 Bank Restriction act; and he produced in support of that 
 opinion, a table of prices paid by the governors of Greenwich 
 Hospital, for the principal necessaries of life, and for the wages 
 of mechanical labour, from the year 1795 downwards. This 
 table is here given ; and undoubtedly the information it affords, 
 appears fatal to the system of Mr. Tooke. It undoubtedly 
 evinces a great advance of prices in that period which imme- 
 diately followed the Restriction act, whilst it evinces no corres- 
 ponding advance in gold. 
 
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 This table is a tlocunient undoubtedly of that description, 
 by which the varying value of money has been at all times 
 agreed to be estimated; and perfectly evident it is from it, 
 that the Governors of Greenwich Hospital at least, expe- 
 rienced a great and progressive fall in the value of their money ; 
 commencing with the Restriction act. Precisely as the owners 
 of fixed incomes are at all times impoverished by a depreciation 
 of money, so would this establishment have commenced to 
 suffer impoverishment immediately after the Restriction act, if 
 its income had been derived from fixed payments of whatever 
 kind. But it is contended, that no general conclusion ought to 
 be drawn from this table ; that, first, it is defective and incon- 
 clusive with respect to the earlier part of the period it refers to, 
 " because it gives the prices at intervals of no less than 5 years 
 " each, between 1795 and 1805; and it so happens that 1800 
 " and 1805, which form the points of comparison with the first 
 " of the series, include the great rise of necessaries, immediately 
 " consequent on two very bad harvests, viz. 1799 and 1804." 
 But it ought in candour to have been stated here, that 1794, 
 also, was a deficient harvest; it has been so described, and 
 with much particularity by Mr. Burke ; and consequently the 
 year 1805, at least, did form a proper point of comparison with 
 1795, but 1804 was not a year in which the harvest was defi- 
 cient, it was rather a year of plenty. The comparison of 1805 
 fell short of giving the full measure of advance, instead of exceed- 
 ing it. It will not be diflficult, presently however, to supply the 
 deficiencies of this table, by adding the price for the intervening 
 years, of flour, the only article in the table subject to fluctua- 
 tions on account of particular harvests, whether good or bad. 
 But there remain other objections. The column headed " meat" 
 is objected to, " because it does not distinguish the kind."" " It 
 " probably includes pork ;" and " the war operated in a greater 
 " degree, to raise the price of pork, than that of beef and 
 " mutton."" At the end of Mr. Tooke's book is a table of the price 
 of beef and mutton, at Smithfield, year by year, for many years, 
 beginning in January J 796 ; and by that table it appears, that 
 the price was, taking it by the average of years, and not by 
 particular years, in the manner here objected to : for beef, on an 
 average of 5 years, ending 1800, 3s. S{d, u stone; for mutton,
 
 16 
 
 4*. 3|J. and on an average of 5 years, ending 1805, for beef, 4s. 
 10|<Z. ; and for mutton, 5s. 5ld. ; which gives an advance of 
 butcher meat, pork not included, nearly corresponding with the 
 price of the Greenwich Hospital table. The other articles 
 enumerated in this table, are all of them objected to in the 
 character in which they have been brought forward ; that of a 
 measure of the general advance in prices. Butter and cheese 
 are said to have been affected by the state of our political rela- 
 tions with Holland, and therefore not to be applicable to the 
 question^ Malt includes taxation (a valid objection). The 
 wages of " Carpenters do not afford a fair criterion of the gene- 
 " ral rate of wages through the country," chiefly, amongst other 
 reasons, because the war occasioned an increased demand for 
 carpenters, for the building of ships. " Candles follow the 
 " fluctuations of tallow," produced, amongst other causes, by war. 
 " And with regard to coals, the freight forms so large a propor- 
 " tion of their cost, that the increase of their price proves little 
 " else than an increase of freight ; which it is well known, reached 
 " to a great height, in consequence of the peculiar circumstances 
 " of the war ;" and to which we may add to a still greater height, 
 in consequence of the depreciation of money. The parliamentary 
 document, from which the table above copied is extracted, con- 
 tains as well as the wages of carpenters, the wages of bricklayers, 
 masons, and plumbers ; and it appears that by 1805, the wages 
 of all these mechanics, though some of them could scarcely be 
 wanted for ship building, had advanced in as great a degree as the 
 wages of carpenters. To all this description of labour, Mr. Tooke's 
 objections extend : and they go much further ; his objections reach 
 to the wages paid to " soldiers, sailors, labourers in husbandry, 
 " carpenters, bricklayers, domestic men servants, and many others," 
 and amongst others to " full grown able-bodied men" in general, 
 for which " during the progress of a war, on such a scale as 
 " the last, there must have been an unusual demand." Of all 
 these he contends, " that the greater pay which they (subject, 
 " however, to many important exceptions) received, affords no 
 "ground of inference of depreciation in the currency;" noi", 
 further (for to that extent this argument goes), of a general ad- 
 vance of wages throughout the country at large. The labour 
 above described, it is asserted, falls within the reach of a pecu-
 
 17 
 
 Harity of demand. Other descriptions of labour, it is contended, 
 all labour exempted from such peculiarity of demand, experienced 
 no advance. 
 
 On such grounds as these, therefore, it is proposed to set this 
 table aside ; but before doing so, and prior to an examination of 
 the merits of those other tables, proposed to be substituted in its 
 place, as affording a better criterion of the value of money, we 
 may inquire whether any further information can be derived from 
 carrying this table itself somewhat further than it now goes. It is 
 on the supposed influence of war upon rates and prices, that the 
 objections here brought forward mainly rest. If we carry the table 
 back, therefore, to former periods of war we may be able to derive 
 some information as to this objection ; and to discover, whether it 
 be in the nature of the operations consequent on war, to cause an 
 advance of prices and wages, similar to that which is now ascribed 
 to those operations. If war have a tendency to advance the 
 wages of the labour of the mechanic and the husbandman, and the 
 prices of necessaries at one period, it must of consequence have that 
 tendency at all other periods. Much has been said indeed, but com- 
 monly in terms exceedingly vague, of the peculiar character of the 
 late war ; but, it is certain, that the war did not assume, 
 till after the period we are now referring to, any character differ- 
 ent from the character of former wars. It was after the manner 
 of former wars, a system of loans, taxes, and foreign and do- 
 mestic expenditure and waste on the part of government, and up 
 to 1807, cannot be shown to have differed in these, from 
 the general operations of all the wars ef the last century. An 
 extract from the Greenwich Hospital table, taken at a period 
 a little antecedent to the American war, continued during the ex- 
 istence of that war, and over the period immediately subsequent, 
 will give us the following prices : — 
 
 D
 
 18 
 
 A7id to these Ar^ 
 
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 tract further 
 
 from the same 
 
 Table. 
 
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 In this table, the prices of the year 1780, are the prices of the 
 midst of a war, which had then continued five years. Neither ne- 
 cessaries nor wages had experienced any advance. Flesh, including 
 pork no doubts as well at that time as in 1805, had fallen in price; 
 bread had fallen in price ; butter and cheese had a little fallen ; 
 oatmeal had experienced no advance ; malt had fallen consider- 
 ably ; the wages of labour had experienced no advance ; candles 
 had advanced Q\d. per 121b. ; coals had advanced 6s. M. a 
 chaldron beyond the price of 1775, but no more than S*. or 4s. a 
 chaldron beyond what appears to have been a common average 
 price, as compared with other years. In the year 1785, peace 
 had been established one or two years, and the table of prices 
 exhibits no decline ; but meat, b/ead, butter, cheese and malt,
 
 19 
 
 had all advanced. This extract from the Greenwicli Hospital 
 table is decisive on the question of the influence of war on 
 prices and wages. Some other solution must be found of the 
 advanced prices and wages paid in 1800 and 1805, than that 
 which ascribes them to the influence of war. 
 
 The extract, however, of the Greenwich prices, given by the 
 writer in the Review, ought properly to have commenced with the 
 prices of 1790, instead of those of 1795. Those words, "the Bank 
 Kestriction act," are used properly as a compendious term for 
 that whole system of measures and acts of parliament, com- 
 mencing with 1793, and ending with 1814, by which the value 
 of money was unjustly lowered ; as the words " Mr. Peel's 
 Bill," are used as a compendious term for those other measures, 
 commencing in 1814, and still in progress, by which the value of 
 money was as unjustly raised. Many writers and speakers on 
 this subject, with a want of candour which is scarcely worthy of 
 notice, have quoted the date of that bill, to those who spoke of 
 evils occasioned by Mr. Peel's Bill, although they knew that by 
 the term, was meant nothing more than the legal completion of 
 a system of previous measures. 
 
 Having seen the grounds, then, on which it is proposed to set 
 aside the Greenwich Hospital tables as a measure of the value 
 of money; and being satisfied that the high rates which those 
 tables exhibit of wages and necessaries prior to 1805, could 
 not have been occasioned by the influence of war ; we may 
 inquire, with more advantage, into the merits of those 
 details and tables which it is proposed to substitute for so 
 important an office : and in doing so, there will be occasion to 
 supply other deficiencies in the Hospital tables. The details 
 proposed consist of extracts from the tables of the price of 
 corn and meat ; and of tables of the wages of labour. Called on to 
 reject from an estimate of the general rate of labour, the wages of 
 mechanics, husbandmen, and of full grown able-bodied men ge- 
 nerally, as subject to " peculiarity of demand ;" to what descrip- 
 tion of labour, and to its wages, are we to apply for an inference 
 of the value of money ; and to enable us to determine, whether 
 any general advance of wages, did or did not take place in the 
 period referred to .'' Mr. Tookc assures us, that " the labour 
 " which did not come within the reach of such peculiarity of 
 " demand appears not only not to have experienced wy rise,
 
 20 
 
 *' but actually, in several instances, to have fallen in price, during 
 " the period in question." But as the greater part of this gen* 
 tlcman''s work, mainly consists of attempts to form general rules 
 out of particular and excepted cases, it will place this point on 
 a more satisfactory footing, if we extract one of the two tables of 
 that description of labour, which he considers as not falling 
 within the objection of any peculiarity of demand; and from 
 which description of labour he proposes that an estimate of the 
 general rate of wages should be taken. This table contains an 
 account of the wages paid by the piece for weaving cotton in 
 Lancashire. It begins with the late war and ends in 1814. 
 
 Wages for Weaving the 
 
 seven-eighth 743. 
 
 Wages for Weavi 
 
 ng the 80 six fourth Cambric 
 
 Printing Calico in 
 
 Lancashire. 
 
 a 
 
 t Stockport. 
 
 YEARS. 
 
 APRIL. 
 
 JUNE. 
 
 DECEMBER. 
 
 
 S. 
 
 d. 
 
 S. d. 
 
 s. d. 
 
 1792 
 
 8 
 
 
 
 
 
 1793 
 
 6 
 
 
 
 
 
 1794 
 
 6 
 
 
 
 
 
 1795 
 
 7 
 
 
 
 
 
 1796 
 
 7 
 
 
 
 
 
 1797 
 
 7 
 
 6 
 
 
 
 1798 
 
 7 
 
 
 
 21 6 
 
 21 6 
 
 1799 
 
 7 
 
 
 
 22 6 
 
 21 
 
 1800 
 
 8 
 
 
 
 21 
 
 21 
 
 1801 
 
 8 
 
 
 
 21 
 
 22 
 
 1802 
 
 10 
 
 
 
 24 
 
 23 in Sep. 25s. 
 
 1803 
 
 9 
 
 
 
 20 
 
 16 
 
 1804 
 
 7 
 
 6 
 
 16 
 
 20 
 
 1805 
 
 8 
 
 6 
 
 19 
 
 15 
 
 1806 
 
 7 
 
 6 
 
 15 
 
 11 6 
 
 1807 
 
 7 
 
 6 
 
 14 
 
 14 
 
 1808 
 
 5 
 
 6 
 
 11 
 
 12 6 
 
 1809 
 
 6 
 
 6 
 
 16 
 
 16 
 
 1810 
 
 8 
 
 6 
 
 15 6 
 
 10 
 
 1811 
 
 5 
 
 6 
 
 11 
 
 11 
 
 1812 
 
 6 
 
 6 
 
 n 6 
 
 11 
 
 1813 
 
 8 
 
 
 
 12 
 
 15 
 
 1814 
 
 10 
 
 
 
 16 to 17s. 
 
 In April and May 
 
 
 • 
 
 — 
 
 
 20s. to 21s., and 
 
 
 23)172 
 
 
 
 
 some speculators 
 
 
 _ 
 
 
 
 gave 22s. to 23s. 
 
 
 
 
 7 
 
 6 Average. 
 

 
 Another table contains the wages for weaving muslin in 
 Glasgow, from 1790, to 1814. It shows that 16d. had been 
 paid for four successive years, commencing in 1790, and Idd. for 
 the year following, for the same labour which had fallen during 
 the depreciation of Money, to Hd.^ 6d., and 6d. 
 
 It is by these tables that is " negatived the progressive ad- 
 " vance in wages, in a degree beyond the difference between 
 " paper and gold, which has been ascribed to the Bank rcs- 
 " triction." But these tables go further ; they exhibit a 
 decline of wages. They are principally resorted to, for the pur- 
 pose of proving that no material advance in wages took place be- 
 tween the date of the restriction act, and the years 1806 or 1807. 
 But if admitted for that purpose, they must be admitted, also, as 
 proof that a general decline of wages was experienced, not only 
 from the restriction act to 1806 and 1807, but throughout the 
 whole of the late war. A description of labour which falls in 
 price, from 15d., to 6d. and 7rf., during the period of an advance 
 in the prices of necessaries, and of a depreciation of money, must 
 of necessity have been affected by some great " peculiarity of 
 " demand." That peculiarity of demand has arisen, I under- 
 stand, from no other cause than the improvement of machinery. 
 In Lancashire, a large population has long maintained an un- 
 equal struggle, and is at this time sinking beneath the destructive 
 effect on their labour, of that particular description of machine 
 which is called " the power-loom." The master manufacturer 
 can procure by the aid of the power-loom, the produce from 
 one man of the labour of four ; and he therefore pays to four of 
 the manual weavers, little more than the wages of one.* These 
 
 * The following Extract from an intelligent account of the Cotton Trade, 
 
 is to be found in the Supplement to the Encyclopaedia Britannica, and. 
 
 is of importance beyond what it derives from this question. It was 
 
 printed early in 1819. 
 
 " The obstacle to the success of this branch in Lancashire, geeras to be 
 
 " the low wages at which goods are woven there by the hand. The popu- 
 
 " lation of this district, it appears, has reached an amount wliich makes it 
 
 " press at all times on the means of employment; and when trade is dull, 
 
 " to a great degree. Whenever trade, therefore, is in this state, the prico 
 
 " of hand-weaving falls below what the goods can be produced for by 
 
 "machinery; making an allowance for its cost and maintenance. 13ut
 
 oo 
 
 tables, therefore, possess no value, as affording ground for an 
 estimate of the rate of a depreciation of naoney, or of the general 
 wages of labour. It would be preposterous to admit such accounts as 
 substitutes for the wages of husbandry labour. I have inserted two 
 other tables of the prices of agricultural produce, and the wages 
 of agricultural labour, and one of them, of the expenses and 
 disbursements on agriculture during the American war, and 
 during the last war. One of these tables is to be found in the report 
 of the committee of the House of Lords, from whence the ac- 
 count of the wages of the weavers is drawn; the other will 
 supply some of the deficiencies of the Hospital table. They are 
 both the result of the personal inquiries of the parties that formed 
 them ; and of course refer to particular districts. AVages, there- 
 fore, cannot be taken to have advanced throughout the country, 
 in each year, precisely with these tables ; but the evidence they 
 give of the advance in wages, and in necessaries and expenses 
 jTcnerally, in the late war, and the comparison they afford between 
 that period and the American war, correspond with the tables of 
 the Greenwich Hospital, in demonstrating the fact and extent of 
 the late depreciation of money ; and of its commencement from 
 the restriction act. The tenor of the whole evidence given before 
 the different committees on agriculture, likewise establishes the 
 fact of agricultural labour having been doubled during the 
 Restriction act. 
 
 " A Table hy Mr. J. Easton, of Taunton, in the county of 
 " Somerset : shewing the prices of Wheat, Meat, Butler, Haij, 
 *' and the progressive value of Lands and. Tithes, in the jmrish 
 " of Bradford, county of Somerset, containing 895 Arable, 
 " 827 Meadow and Pasture, 62 Orchard, and 6 acres of 
 " Woodland. — The prices of Wheat, Meat, Butter, and Hay, 
 
 " there is, besides, another thing which, at times, helps to bring the goods 
 *' produced by hand-weaving, cheaper to market than those from the 
 " power-looms, namely, that yarns of inferior description can be used by 
 " the hand-weaver, and by great dexterity and pains, fabricated into 
 " marketable cloth. From these circumstances operating in favour of the 
 " production of goods by hand-weaving, the attempts to extend weaving- 
 " mills have not proved successful in Lancashire. But this struggle between 
 *' the tivo processes, we think, must finally tcnnbialc in favour of the latter 
 " For the weavers cannot go on at the wages' they have been reduced to."
 
 23 
 
 " are upon an average of each Ten Years, in Taunton 
 *' Market, from his own Journals ; the jirices estimated are 
 '' upon the average of payments upon his own farm, or of other 
 ^^ farms under his management or knowledge of" 
 
 From 1773 \ 
 
 to 17821 J 
 1783 to 1792 
 1793 to 1802 
 1803 to 1812 
 
 Average Price 
 
 Winchester Ljushelj 
 
 good Wheat. 
 
 S. d. 
 
 5 11 
 
 6 2 
 9 5 
 
 12 6 
 
 Average Price, 
 Batf, Mutton, 
 per lb., l6oz. 
 
 d. 
 
 Oi. 
 
 81 
 
 Average Price 
 Butter, per lb. 
 
 d. 
 
 7 
 14 
 16 
 
 Average Price 
 Hay, per ton. 
 
 35 
 
 38 
 60 
 70 
 
 YEARS, 
 (repeated column. J 
 
 Gross produce of 
 
 Parisli of Bradford, 
 
 estimated. 
 
 Land Tax. 
 
 Cliurch' and Poor 
 
 Kales, Highway 
 
 Rates. 
 
 Repairs, Buildings, 
 
 binices, Gates, 
 
 per Annum, 
 
 estimated. 
 
 
 £. 
 
 £. 
 
 s. 
 
 £. s. 
 
 £. 
 
 From 17731 1 
 to 1782 j 
 
 4,500 
 
 283 
 
 5 
 
 200 10 
 
 150 
 
 1783 to 1792 
 
 4,691 
 
 283 
 
 5 
 
 210 
 
 160 
 
 1793 to 1802 
 
 7, 162 A 
 
 283 
 
 5 
 
 315 15 
 
 315 
 
 1803 to 1812 
 
 9,420v^ 
 
 283 
 
 5 
 
 430 
 
 400 
 
 YEARS. 
 (repeated column.) 
 
 Capital to Stock 
 
 Farm, 
 
 estimated. 
 
 Interest 
 
 on 
 Capital. 
 
 Labour, Manure, 
 
 Smith'sBills,Carpenter's 
 
 Wear and I ear, 
 
 estimated. 
 
 Total outgoings, 
 
 exclusive of Tithes, 
 
 and 
 
 Property Tax. 
 
 From 17731 2 
 to 178215 
 1783 to 1792 
 1793 to 1802 
 1803 to 1812 
 
 £. 
 
 4,970 
 
 5,200 
 
 7,900 
 
 10,500 
 
 £. s. 
 
 248 10 
 
 260 
 395 
 525 
 
 £. s. 
 
 1,892 12 
 
 1,945 17 
 3,023 5 
 4,098 13 
 
 £. s. 
 
 2,774 17 
 
 2,859 2 
 4,332 5 
 5,736 18 
 
 YEARS. 
 
 Annual produce. 
 
 Average Value 
 per Acre, about 
 
 Modus of 
 
 Labour- 
 
 (repeated column.) 
 
 Great Titlics, 
 
 Small Titlics, 
 
 ers 
 Wages 
 
 
 
 
 Let at 
 
 Let at 
 
 per Day 
 
 
 £. s. 
 
 £. s. d. 
 
 £. 
 
 £. 
 
 s. d. 
 
 From 1773n 
 to 17821/ 
 
 1,725 3 
 
 19 6 
 
 105 
 
 45 
 
 1 2 
 
 1783 to 1792 
 
 1,831 18 
 
 10 6 
 
 120 
 
 50 
 
 1 3 
 
 1793 to 1802 
 
 2,830 5 
 
 1 11 6 
 
 184 
 
 80 
 
 2 
 
 1803 to 1812 
 
 3,683 17 
 
 2 10 
 
 232 
 
 100 
 
 2 4
 
 24 
 
 The next table contains the prices of farm labour in Cum- 
 berland, collected from personal inquiries by Mr. Jno. Roolce, 
 of Wigton, and printed in a very intelligent pamphlet, by that 
 gentleman. The wages of labour are compared with the price 
 of wheat :-^ 
 
 Wages of farm Servauts Price of a Busliel of 
 per Week in Cmiibcilaiitlj Wheat in England. 
 
 1770 •• 6 
 
 1771 ... 6 
 
 1772 
 1773 
 1774 
 
 s. d. s. d. 
 
 4 10 
 
 5 71 
 
 6 6^ 
 C 6k 
 
 .. 6 10 6 V, 
 
 Average of 5 years 6s. 8d. 5 11 J 
 
 1775 
 1776 
 1777 
 1778 
 1779 
 
 6 11 
 
 7 
 7 
 7 
 7 
 
 5 11 
 
 4 8| 
 
 5 5i 
 4 10 
 4 
 
 Average df 5 years 6s. llfrf. 4 11| 
 
 1780 
 1781 
 1782 
 1783 
 1784 
 
 4 9| 
 
 5 9:> 
 
 5 111 
 
 6 01 
 5 Hi 
 
 Average of 5 years 7s. 
 
 5 8i 
 
 1785 
 1786 
 1787 
 1788 
 1780 
 
 Average of 5 years 7s. 
 
 1 
 
 H 
 
 H 
 
 1790 "7 4 - 6 3i 
 
 1791 ... 7 6 5 5i 
 
 1792 ..7 8 ..5 2| 
 
 1793 •• 7 10 5 9| 
 
 Wages of farm Servants Price of a Bushel of 
 per Week in Cumberland. Wjieat in England. 
 
 s. d. s. d, s. d. 
 
 1794 -.8 5 11 
 
 Average of 5 years 7s. 5|rf. 5 HI 
 
 1795 -.8 2 9 Of 
 
 1796 ... 8 4 8 lOi 
 
 1797 -.9 6 ll| 
 
 1798 ...10 6 
 
 1799 --ll 8 3 
 
 Average of 5 years 9s. 3|d. 7 11| 
 
 1800 .-11 14 9| 
 
 1801 ..11 15 6 
 
 1802 ...11 6 8 4 
 
 1803 ..12 .. 7 
 
 180J. ..13 6 7 6i 
 
 Average of 5 years lis. 9id. 10 7| 
 
 1805 ..14 6 ......10 104 
 
 1806 ...15 9 7 
 
 1807 ..15 6 9 li 
 
 1808 ...15 6 10 6i 
 
 1809 ..15 6 11 6| 
 
 Average of 5 years 15s, 3|rf. 10 4 
 
 1810 ..15 6 12 11 
 
 1811 ..15 11 64 
 
 1812 ..15 15 8 
 
 1813 ..14 6 13 3 
 
 1814 ...14 6 
 
 Average of 5 years 14s. 10|c?. 
 
 Deficient of 4 years 13 4 
 
 Hespecting the price of wheat, Mr. Toolce states further, 
 " that there was nothing like a progressive increase in price 
 " from 1797, commencing, as the reviewer and so many 
 " writers and speakers before him would lead the public to 
 *' suppose ;" but " that there was a decided fall in the price of 
 ** corn in the aggregate, after the lapse of seven years from the 
 ** Bank restriction, instead of the progressive rise asserted so
 
 . 25 
 
 ^' confidently to have been the necessary effect of that measure." 
 It is on a method of computation entirely false, that this asser- 
 tion is founded. It is on a " comparison of extreme points ;"" 
 by taking the prices of single years in two different periods, and 
 setting one of these against the other ; the highest price of the 
 gold money, against the lowest of the paper money. The 
 price of corn varies greatly from year to year, Vv'hatever be the 
 value of that money in which it is estimated. The only manner, 
 therefore, in which the relative prices of corn in two diffei-ent pe- 
 riods can be justly estimated, is to take the average prices of some 
 short number of years in each period, and compare them with 
 each other. By taking the prices of detached years, it might 
 readily be proved, that the price of wheat was higher during the 
 80 years which preceded 1750, than in the thirty years which 
 succeeded. Mr. Tooke's calculations respecting the price of 
 wheat from 1797 downwards are emban-assed, by a reference to 
 good and moderate, and bad and indifferent harvests ; the esti- 
 mate of most of which is probably a mistaken one ; but not to 
 oppose one vinsatisfactory conjecture against another, a computa- 
 tion is inserted here of the advance in wheat, subsequent to the 
 restriction act, which will be found in a speech of Mr. Horner 
 on the report of the bullion committee in May, 1811, and in 
 which he has allowed for the state of different harvests : 
 
 ** But it is not" (said Mr. Horner) " alone from the extraordinary rise in 
 *' the market prices of the precious metals in this country ; a rise not to be 
 " accounted for on the ground of any correspondent rise in the markets of 
 " Europe, that the depreciation of our currency is demonstrable. The 
 " equally extraordinary rise in the prices of the necessaries of life, not as 
 " compared with the precious metals, but as compared with the actual 
 " circulation, affords a clear and convincing proof of its depreciation. The 
 " great and paramount standard of all value, Sir, is corn ; and in order to 
 " enable the committee to form an estimate by this standard, I shall beg 
 " leave to call the attention of gentlemen to the extravagant rise which 
 " has within the last few years taken place in the prices of that article. 
 " For the sake of greater precision, and to avoid any possible cavil, I pro- 
 '' pose to leave out of my consideration, the prices in those years in which 
 " any considerable scarcity has been felt. 
 
 " It appears, from the Appendix to the bullion report, that from the 
 " year 1771 to the year 1785 inclusive, a period of 15 years, the average 
 " price of wheat was 46s. per quarter. It also appears that from 1786 to 
 " 1797 inclusive, being a period of twelve years, the average was 52s. but, 
 " omitting the years 1795 and 1796, which were years of peculiar scarcity, 
 
 E
 
 S6 
 
 *' thfi avpi-agf was 47.'.-. and '2 J. Since the year 1797, however, a very dif- 
 " fercnt rate of increase will be found to have taken place, from that which 
 " existed between the two periods I first mentioned, as will be seen from 
 '* the statement I am now about to submit to the Committee. During the 
 " period of twelve years from 1797 to 1808 inclusive, omitting altogether 
 " the two years 1800 and 1801, as years of scarcity, the average price of 
 " the quarter of wheat was 71s. and if the two years of scarcity were in- 
 " eluded would amount to 79s. What facts can possibly be required more 
 " strongly and indubitably to prove the incontestible depreciation of the 
 " Currency ? What evidence more decisive of that circumstance can be 
 " produced, than that, whilst the precious metals, the practical measure, 
 '' and bread corn, the real standard of all value, have maintained their due 
 " proportion towards each other, and both have equally risen as compared 
 " with our circulating medium, that such circulating medium is depreciated 
 *' precisely to the amount of the rise of those real standards above its ac- 
 " tual value V 
 
 The progressive advance taken from the table from which this 
 estimate is made, appears to have been — 
 
 Price of 5 years, ending 1801, but excluding 
 
 1800 and 1801 56s. Ud. 
 
 Price of 5 years, ending 1806 70s. 2d. 
 
 Price of 2 years, ending 1808 Ids.ld. 
 
 A regular and progressive advance, from that period which both 
 Mr. Horner and Mr. Tooke have taken for the date of the 
 paper money of the restriction act ; and an advance of 50 
 per cent on wheat for an average of 12 years ending at that 
 period, for which the latter gives the depreciation of money as 4 
 per cent, estimated by the ounce of gold. 
 
 The discussion of 1811 turned wholly on the question, whe- 
 ther any depreciation of money did or did not exist ? The dis- 
 cussion of the present day is as to what was the extent of that 
 depreciation. Mr. Horner's argument here quoted is directed 
 to the first point ; it was the only one in discussion, the facts 
 referring to It are stated with much candour, and the conclu- 
 sion drawn from them is undeniable. But Mr. Horner falls 
 into an extraordinary misconception, with reference to that other 
 point, of the extent of depreciation, which was not indeed the 
 subject in dispute, but which the statement here made bears 
 upon. His arguiTtient on the existence of a depreciation in the 
 restriction money, is of this kind. Gold bullion, which, at 
 no former time, either of war or government expenditure, or 
 loans, did ever advance to a higher price than 3/. 17s. XO^d., in
 
 27 
 
 the market, as long as the old description of money existed, 
 has now risen above S/. lis. 10{d. in the new money of the 
 restriction act. Bread corn, which, in the old money, did 
 never reach to more than 46*. a quarter (by the average), under 
 any circumstances, or at any time ; has now advanced beyond this 
 price in money of the restriction standard. You speak of a 
 demand for bullion, and of a scanty supply of corn, but as nei- 
 ther of these can be shown to have, at any former time, caused 
 bullion or corn to advance beyond 3/. 17s. 10|J. for the one, 
 and 46s. for the other, before the introduction of the new money ; 
 so the a^ance of both must now be ascribed to the new charac- 
 ter of the money in which those prices are estimated. It is not 
 that corn and bullion have become dear, it is money that has 
 become cheap ; of a low or depreciated value. This proof of the 
 fact of depreciation is irresistible. But these statements, as far 
 as they have reference to the question of the extent of deprecia- 
 tion, refer to an erroneous estimate of the fact. " What evidence 
 " more decisive of depreciation can be produced, than that whilst 
 " the precious metals, the practical measure, and bread corn, the 
 * real standard of all value, have maintained their due propor- 
 *' tions towards each other, and both have equally risen, as com- 
 " pared with our circulating medium ; that such circulating 
 " medium is depreciated precisely to the amount of the rise of 
 *' those real standards above its actual value." Now, it is evi- 
 dent, that though bullion and corn had both advanced, they yet 
 had not equally advanced. They had not maintained their due 
 proportion with each other ; they had not equally fallen as com- 
 pared with our circulating medium. Between 1797 and 1808 
 bread corn had advanced, as appears in this passage, on an 
 average of that whole time, from 46*. to 7 is. or more than 50. 
 per cent, whilst bullion had advanced no more than about 
 15 per cent at its highest price, and only 4 per cent, according to 
 Mr. Tooke, for an average of the whole time. Both bread corn 
 and bullion are here taken as standards, by which to judge of 
 the depreciation of money, but they do not give a like measure. 
 Which are we then to take as correct ? If this question had 
 been pressed on the mind of Mr. Horner at that time, or if the 
 state of the discussion had led to that consideration, it is proba- 
 ble he would have arrived at this, which is the true conclusion ; 
 that bullion afforded no more than an inferior and unequal mca~
 
 28 
 
 sure of the relative value of two descriptions of money, with both 
 of which it did not stand in the same relation ; exchanging against 
 one as a commodity, in the manner of all other commodities ; 
 but forming a component part of the other, and rather exchange- 
 able into than against it. That bread corn exchanging as a 
 commodity against both descriptioiis of money alike, was calcu- 
 lated to give the relative value of the two ; and that it in truth 
 afforded the paper standard on which a correct judgment of the 
 extent of depreciation could be formed.* 
 
 The prices of meat taken from the Smithfield table appended 
 to Mr. Tooke's book, exhibit a progressive advance from the 
 commencement of the table, and contradict his estimates. 
 
 That table gives the following result :- 
 
 Average of 5 years, from 1796 to 1800 
 
 1805 
 
 1810 
 
 1815 
 
 These prices establish sufficiently the fact, that a progressive 
 advance in meat followed the Restriction bill. 
 
 Looking again over the prices of grain during the period now 
 treated of, there appears one particular year, to the price of 
 which it is desirable to advert ; that is the year 1795, a season 
 of great calamity, when, as appears from much concurrent testi- 
 mony, as great a scarcity of food was experienced in this country, 
 as has been known in modern times, and perhaps a greater 
 scarcity, if we except the year 1800. It was in 1795 that Mr. 
 Burke's treatise on scarcity was written. Expedients were 
 then resorted to amongst all classes of society, by which to eco- 
 nomise the use of bread corn. To refrain from that use was 
 held a duty, amongst the upper and middle ranks. A com- 
 mittee of the House of Commons, appointed to consider " of the 
 high price of corn,"" went so far as to recommend that an agree- 
 ment to restrain its use, individually should be signed by the 
 
 Beef. 
 
 3s. 8|f/. 
 
 Sliitton. 
 
 4s. Sid. 
 
 4s. 10|(f. 
 
 5s. 5ld. 
 
 4s. \0d. 
 
 4s. \l\d. 
 
 5s. 8ld. 
 
 5s. 11 if?. 
 
 * Since this paragraph was written, I have perceived that Mr. Horner 
 did in reality arrive at this conclusion. In his speech in May 1816, on 
 the renewal of the Restriction act for two years, he says, " that the opi- 
 " nions which he had formerly given" (viz. on the subject of the deprecia- 
 tion of money), " had received a strong and unexpected confirmation by 
 " late events ; but he had already modified the opinion which he had for- 
 " merly held as to the price of gold. When by the depreciation of the 
 " currency, gold was permanently separated from paper, it was subject to 
 " all the variations in price, of any other article of merchandize."
 
 '29 
 
 members of the Hou.se. A decrease of marriages, an increase of 
 burials, and a defalcation in the revenue, all evince a condition of 
 great calamity amongst the poor. But when we turn from observ- 
 ing this state of distress, to that " high price of corn" which had 
 occasioned it ; we £nd that^ price, as marked in the table appended 
 to the Bullion report, for the average of 1795, no higher than 
 74s. ^d. a quarter, for the average of England and Wales ; 
 66s. 4id. for Scotland, and in Ireland 61s. ; and the average of 
 1796 appears as no more than 3s. or 4s. a quarter above these 
 prices. These were the prices paid in metal money, depreciated 
 indeed by the measures which led to the Restriction bill ; but 
 still, in money of the metal standard, of a period of as great 
 deficiency of food, and of as great distress on account of it, as 
 appears to have taken place in this country, within any recent 
 period. The year 1800 was another year of scarcity, and the 
 yearly average of wheat then rose to 113s. 7d. for England and 
 Wales, and in 1801 to 118s. 8d. ; but these were the prices of 
 the restriction money fully established. Shortly afterwards en- 
 sued years, not of scarcity, but of abundance ; years of increasing 
 revenue and increasing prosperity amongst the poor, whilst they 
 paid, year after year, prices for wheat of 87s. 9d. 95s. 7d. 
 106s. Sc?. 94s. 6U 125s. 5d. and 108s. 9rf., which last five 
 prices quoted, are the average prices of 5 successive years, ending 
 with 1813. No committees sat in these years to consider of 
 " the high price of corn," and " of distress arising therefrom.'' 
 Those were not the prices of dear corn, but of cheap money ; 
 not of scarcity, but of abundance. This period was distinguished 
 by an increasing revenue and by a diminishing poor rate, as 
 measured in food, as measured by the quantity of distress which 
 sought relief, and by the quantity of relief given. Whoever 
 turns from these prices, and the condition of the country which 
 accompanied them, to the calamities which, in 1795, arose out 
 of a deficiency of food, and " the high price of wheat," the price 
 of which was 74s. a quarter, and then again considers that the 
 money of 1795 was still of metal, but that of 1813 of an unli- 
 mited paper, in which wages had risen as well as com, will sec 
 in that the exposition of the cause of these latter prices, and 
 how it was that they were supported. 
 
 Those individuals who maintain that these prices were chiefly 
 occasioned (that is, after allowing about one-fifth part, or 20 per
 
 so 
 
 cent, for their computed depreciation of money) by difficulties 
 interposed to the production of corn, by a scanty supply drawn 
 from poor soils ; by corn laws, and a laborious cultivation ; 
 appear altogether to overlook the circumstance, that the high 
 price of corn is the least of the difficulties of which they are 
 called on to explain the origin. If we admit that these high 
 prices arose out of the necessity of bestowing increased labour 
 on the production of corn, and out of the difficulties which ob- 
 structed its importation ; then we shall require it to be explained 
 what fortuitous combination of circumstances it was, that placed, 
 at this critical period, double wages in the hand of the labourer, 
 and thus enabled him to obtain his portion of that food, which 
 he must have been otherwise unable to reach the price of. 
 There is but one explanation of both difficulties : the prices were 
 fictitious prices ; the prices of an altered standard of money ; 
 the same cause which raised the price of corn for the farmer, gave 
 to the labourer the means of purchase. 
 
 No more baseless delusion has ever been entertained, than that 
 which held out to the landowner and the farmer, that the depres- 
 sion of agricultural prices was of a temporary nature, and that 
 they were to expect, year after year, what was called a re-action ; 
 that is to say, paper prices paid in metal money; a high price 
 of corn and a low price of labour. There is no market for corn 
 but with the labourer. They will experience a reaction, but it 
 will not be such a one as they dream of. The next high 
 price of corn will bring with it evils of another kind, and 
 to these evils onr condition at present seems approaching: a 
 beggared and reduced husbandry; land exhausted by excessive 
 tillage, left without manure ; cattle slaughtered at an unprofit- 
 able age ; markets glutted, whilst the yard and the granary are 
 empty ; the trade of the corn-dealer annihilated ; a rapid destruc- 
 tion of agricultural capital — all these are certain forerunners of 
 a re-action in agricultural prices. The farmer is not destined 
 perpetually to witness markets which return on his hands his 
 cattle and his corn : nor whilst cheated by a false money, of a 
 double value, and the victim of juggling contracts, to have his 
 understanding perpetually insulted with theories of excessive 
 production whilst he sees around him an almost total exhaustion 
 of his stock : to this condition of things, there will be a change; 
 it may be delayed by the greater breadth of land which the
 
 31 
 
 plough forces. But the high price of grain, when it arrives, will 
 prove as destructive to the labourers as the low price to the 
 farmers. It is vain to offer predictions on that state of things ; 
 much will depend on accident, and on harvest, but an im- 
 provement on our ])resent condition it will scarcely prove to 
 be, when the starving manufacturers demand bread from a pauper 
 yeomanry. 
 
 For the peculiar theory respecting prices which has been ad- 
 vanced by Mr. Tooke, there exists no foundation. It rests upon the 
 assumption, that during a considerable period after the Restriction 
 bill, no general, considerable, and progressive advance took place 
 in wages, and in prices. That assumption being unfounded in 
 fact, the system which rests on it falls to the ground ; but it will 
 afford important information, after some incidental remarks on 
 the expansion and contraction of money spoken of, and on those 
 details which are given respecting that assumed rise and fall 
 of prices repeated between 1807 and 1816 ; to examine the 
 period following ; and to place in a just point of view some of 
 those facts, which are connected with that great advance of prices, 
 and depreciation of money which commenced at the end of 1816 ; 
 and of that subsequent enhancement of money and fall of prices 
 which followed, commencing early in 1818. 
 
 With respect to the effects of an extension and contraction of 
 private paper and credit; that operations similar to those 
 described have occurred, and must of necessity perpetually recur, 
 where commerce and exchanges are carried on, is very certain. 
 But when we are called on to believe that the depreciation of 
 money in the late war, the advance in wages and necessaries, 
 and in all property and commodities are mainly to be ascribed 
 to operations of this kind ; the proposition is too preposterous to 
 be entertained. It is also exceedingly dubious, whether an 
 advance of price in any particular commodity, or number of par- 
 ticular commodities, has not a tendency to raise the value of 
 money generally, with regard to other commodities, instead of 
 lowering it ; and further, it is doubtful, whether an increase 
 from such cause, of private paper and credit has not a like 
 tendency. Those additional bills drawn and instances of credit 
 given, all require to be discharged in that description of money, 
 here called the " basis of the currency." An increased demand 
 for this description of money is thus occasional ; and with its
 
 52 
 
 increascil demand its value must adsance, unless its quantity be 
 increased ; which increase can only take place from importing 
 g6ld (which will not flow where prices are high) ; where the 
 basis is of metal, and where the basis is of inconvertible paper, 
 it can only spring from increased issues of that paper voluntarily 
 made. Mr. Tooke will probably be of the same opinion, when 
 he considers with attention the representation he has given of 
 what took place in 1793. That was a period when a great 
 contraction of paper money and credit is represented to have 
 taken place ; and it was, of course, preceded by as great " a 
 growth of private paper and credit.'*' The account extracted from 
 Mr. H. Thornton's evidence of the contraction of this paper 
 money which took place in 1793, is very full, and doubtless 
 accurate, and it proves that the shock then given to private 
 paper money and credit ; and their contraction was as violent as 
 any which has been experienced since that time ; 26 country 
 bankers, and 1,956 traders became bankrupts in that year ; and 
 those banks that preserved the best credit, experienced a reduc- 
 tion in their circulation, as it would appear, of one-half But 
 no fall of prices accompanied this contraction of paper and 
 credit ; nor did any advance of prices accompany their previous 
 increase. This representation, therefore, of the period of 1 793, 
 proves, when it is examined, to be the destruction of the theory 
 it is brought forward to support. 
 
 There are scattered throughout this treatise, many extracts 
 of prices from those papers called " Prices Current ;" and these 
 extracts, which are much relied on in argument, appear on a first 
 inspection calculated to convey important information. A price 
 current is a paper which contains from week to week, the prices 
 of commercial articles of every description ; and to extract the 
 prices of the whole of these articles, from time to time, for the 
 purpose of any general estimate, would be impracticable. But if 
 such a number of the principal articles were chosen, as might 
 fairly represent the whole, and being extracted in a list, their 
 prices were given from one period to another ; a table thus 
 formed would represent the variations in the value of money, as 
 estimated in commercial articles ; and would form a valuable 
 addition to our tables of the prices of necessaries, and of labour. 
 These extracts appear, on a first inspection, to be documents of 
 this description : they contain the prices of a variety of articles,
 
 33 
 
 first in 1797, and in 1807 ; then from 1807 to 1810 and 1811 : 
 and another contains the prices of another period, viz. from 
 1811 to 1814'. But on inspection of these tables, it will appear, 
 that they do not contain an enumeration of the same commodi- 
 ties, with their prices continued from one period to another ; but 
 that for each different period is presented a different enumeration of 
 commodities. Thus the account, from 1797 to 1807, is an 
 account of the prices of twelve articles ; that from 1807 to 1810 
 and 1811, is also an account of the prices of twelve articles ; six 
 of which appear in the first account, but the other six are new. 
 In the extract formed to exhibit prices from 1811 to 1814; two 
 of the commodities which appeared in the preceding period are 
 taken, and eight others joined to them. Now, if the commodi- 
 ties enumerated in the first of these extracts, give a fair example 
 of the average price of commercial articles generally at the time 
 referred to, they are equally suitable as a measure of commer- 
 cial prices generally, at all other times ; and that information 
 would be of value, which should give the different scale of prices of 
 these same commodities at different periods. They would 
 inform us how money varied in value ; but to show how some 
 particular commodities rose and fell at one period ; and some 
 other particular commodities at another period, may prove the 
 industry of the compiler, but answers no purpose whatever with 
 respect to this argument. It is, as though one should take the 
 Greenwich Hospital tables, and say, here is a depreciation of 
 money, as shown by coals and candles at one period ; and at 
 another period, as shown by the prices of meat and flour; and 
 further on, I leave out meat and flour, and coals and candles, but 
 find a depreciation by the price of labour. No useful comparison 
 can be so formed. The writer in the Review, carried on the 
 different prices of the same articles through the whole period of 
 which he treated; and Sir George Shuckburgh did the same in 
 his table of the depreciation of money, though it went back 
 through centuries. These mercantile accounts, therefore, lose all 
 weight ; as well as the reasoning founded on them ; and those 
 various accounts also given by Mr. Tooke of the supply of parti- 
 cular commodities, at different times, appear to proceed on a 
 principle similarly fallacious. 
 
 Leaving, then, this part of the subject, it is desirable to make 
 
 F
 
 34 
 
 some observations on that general advance of all prices, whicli 
 commenced in 1816, and continued until 1818 ; and on that 
 general fall of prices which commenced in 1818; and by which 
 prices were brought down to their present level. That this 
 advance and fall in prices was great, far beyond any advance 
 or fall in gold ; and that it was general, is universally admitted. 
 It brought with it, a short interval of prosperity, between the 
 distress and low prices of 1815 and 1816, and those of the pre- 
 sent time, A general advance in prices is a depreciation of 
 money ; it is a lowered value of money : to assert that all 
 monied prices advanced, is to assert that money fell. Mr. 
 Tooke's system as to this period is, that this fall in the value of 
 money first ; and next this subsequent enhancement of the value 
 of money, arose, as during the war, out of an expansion and con- 
 traction of private paper and credit ; which themselves arose 
 mainly from first a scanty ; and next an abundant supply of 
 commodities. But, in the exposition of this operation, its author 
 has lost sight of one particular commodity, the price of which is 
 very intimately connected with this question ; and of which we 
 have an accurate account respecting its supply at this time. 
 That commodity is gold bullion, which scarcely advanced in 
 price at all, and which evinced a rise of no more than about 
 C per cent, whilst commodities in general advanced to a rate 
 difficult to estimate, but approaching or reaching to the prices of 
 the war. This great advance of prices, it is said, was not occa- 
 sioned by, nor connected with, any increased issue of Bank of 
 England notes. An opinion presently to be observed upon, but 
 if admitted, it would still be scarcely contended, that an expan- 
 sion " of private paper and credit" is not as capable of advanc- 
 ing the price of an ounce of gold, as of a ton of iron, or any 
 other commodity. Private paper is not capable of distinguishing 
 between commodities ; it cannot be believed that by private 
 paper, all other commodities can be raised in price ; but gold 
 bullion, by nothing but the agency of Bank of England notes.* 
 
 * I perceive since, that Mr. Tooke in a note, admits that this increase 
 of paper was calculated to advance the price of bullion, as well as of 
 commodities. He says, " It may, at first, be matter of surprise that the 
 " enlargement of our circulation from these concurrent causes, ^id not
 
 35 
 
 But if it be said, that bullion was kept down in its price at this 
 time by an extraordinary supply, that must be admitted. 
 Nearly seven millions sterling was drawn from the Bank coffers 
 during this period, and thrown on the bullion market at a 
 reduced price. It will be perfectly clear, that if this supply had 
 been withheld, the price of bullion must have advanced to a 
 higher rate during this period, than that 5 or 6 per cent above 
 the old mint price, which it reached ; but to what further extent 
 may be questioned. Released from this operation, its advance 
 would have been determined by other circunti stances affecting its 
 supply and demand ; and no reason can be shown why it is not 
 probable that bullion would have advanced, with the general 
 advance of property and commodities, and to the same extent. 
 There is nothing in bullion when measured in inconvertible 
 paper to exempt it from these general rules which determine 
 prices. Bullion advanced SO per cent within a few months in 
 the year 1814; and with a great advance in bullion at this 
 time, what conclusion should we have arrived at ? That money 
 was as greatly depreciated ; perhaps 10, 20, 30, or 40 per cent ; 
 that same money, the same in quantity, the same in its power 
 of exchange against commodities, differing in nothing but in its 
 power of purchasing bullion, which we are now told was depreciated 
 5 per cent — bullion, at 5/. or 61. an ounce during this period, there 
 would have appeared but little difference of opinion respecting the 
 depreciation of this period. The rate of depreciation would have 
 been agreed on ; but not its cause. Mr. Tooke might still have 
 ascribed it to the " expansion of private paper and credit ;" and to 
 scanty supplies. When money increases in quantity faster than 
 commodities, there will always appear a scanty supply of commodi- 
 ties. When money is lessened in quantity, whilst the quantity 
 of commodities is not lessened, commodities will appear to exist 
 
 " diminisli tbie value of it, relatively to other countries, in a greater degree 
 " than was indicated by the fall of the exchanges in 1817 aud 1818;'* 
 and this he accounts for, not by referring to tlie issue of bullion at tliis 
 precise time by the Bank, but by a supposition that at this period money 
 fell also in value on the Continent, and throughout the commercial world 
 at large.
 
 36 
 
 in an extraordinary abundance. This is a never failing rule, 
 the want of attention to which has greatly embarrassed our poli- 
 tical economists. 
 
 The price of gold, said Mr. Ricardo, at the passing of Mr. 
 Peel's bill, is a measure of the depreciation of money. Deprecia- 
 tion of money signifies an advance in the mint price of gold. Gold 
 being 4/. Is. 6cl, the depreciation being 4 per cent so estimated, 
 the return to cash payments at 21. 17«. 10|t?., will consequently 
 occasion a fall, not in the price of gold only, but in the price of 
 all commodities, of 4 per cent, and no more — " a circumstance 
 *' which must be attended with some little inconvenience.""* 
 
 It is thus, as has been already explained, that the term 
 depreciation, defined first in one sense, is immediately made use 
 of in a different sense. This gentleman has since given us a 
 different estimate of the fall in the prices of commodities. " The 
 " whole increased value of the currency, since the passing of 
 " Mr. Peel's bill in 1819" he says, "may be estimated at 
 " about 10 per cent." But bullion has not fallen since the 
 passing of this bill, 10 per cent. Bullion has fallen no more 
 than 4 per cent, or from 4/. Is. ()d. to 3/. lis. 10|d Bullion is 
 not, therefore, a measure of the alteration in the value of the 
 currency ; for the currency has risen 10 per cent, and bullion 
 fallen no more than 4. The Bank, it is contended by Mr, 
 Ricardo, adopted measures in consequence of Mr. Peel's bill, 
 which had the effect of raising the currency 10 per cent in 
 value ; thus all prices were made to fall 10 per cent, and bullion 
 would have been made to fall by these measures 10 per cent also ; 
 it would have fallen to about 3L 13s. : but the Bank then stepped 
 in, and became purchasers of bullion, by which means they 
 prevented it from falling below 3/. 17s. lO^d. But if a purchase 
 of bullion on the part of the Bank, be capable of preventing 
 bullion from falling, with an advance in the value of the 
 currency, it must be equally clear, that a sale of bullion by the 
 same body, can prevent bullion from advancing along with a 
 depreciation of the currency. It is a singular inconsistency 
 which can persist in maintaining, that the price of gold at the 
 
 * See his Evidence before the Lords' Committee.
 
 37 
 
 passing of Mr. Peel's bill, is to be taken as an unerring 
 measure of the then depreciated value of the currency ; after 
 the admissions now referred to. If the purchase of 
 bullion by the Bank, prevents a reduction in its price ; a sale 
 of bullion must also prevent an advance. If bullion do not in 
 the one circumstance mark by its price, the rate of advance in 
 the value of the currency ; so it does not in the other, mark the 
 rate of its fall. 
 
 That the effect produced by this issue of gold by the Bank 
 at this period, was in reality to keep down the price of bullion, 
 and to prevent an advance in that article which must without 
 such issue have taken place ; we collect, from what is stated by 
 Mr. Turner, a director of the Bank, in his letter to Mr. Peel. 
 It is, in fact, on this very ground of this issue of gold, being 
 calculated so to operate, that Mr. Turner defends the conduct 
 of the Bank directors in making that issue. The committee 
 of 1819 appear to have imputed some blame to the 
 Bank on account of the issue of this gold ; and Mr. Turner in 
 defending this proceeding, says, " Suppose that the directors 
 " had acted differently from what they have done ; that, instead 
 " of opening their doors partially to cash payments, they had 
 " kept them hermetically sealed up to the present day," (the 
 date is 31st May 1819) " which by the Report of your com- 
 " mittee, it is insinuated they ought to have done : It is true, 
 *' the Bank would have had nearly seven millions of gold more 
 " in its coffers than it has at the present moment ; but at what 
 " rate, would the Exchanges have been during this period ?"" 
 
 This gentleman appears to express here, some degree, per- 
 haps, of want of respect for the opinion of the committee ; and 
 if he did so, it was not without justice, for the committee com- 
 plained, first, that bullion had advanced in price ; and next, 
 of the very measure which had prevented its further advance. 
 And this feeling of the committee corresponds with that by 
 which the government has been actuated throughout the whole 
 of these transactions, from 1793 downwards. They wished to 
 combine during the war, the advantages of a depreciated money, 
 with the credit of paying their debts honestly ; and afterwards 
 to get back to the old standard, without making it known, that 
 they had ever departed from it. To the question put here,
 
 38 
 
 " at what rate would the exchanges have been during this 
 period, if this seven millions of gold had not been issued ?"" 
 Mr. Turner does not give a reply ; nor would it be easy to form 
 an estimate of the effect of such an operation. In the evidence 
 of Mr. Haldimand, is a passage which may give some means of 
 judging. " If my house were to-morrow to receive an order 
 " from a Paris banker to remit him without limit so small a 
 " sum as 100,000/. sterling, it would affect the exchange in the 
 '* common scale of business, I should say to the extent of one 
 " or two per cent." (Evidence of Mr. Haldimand, Lords' Com- 
 mittee.) From which, it will probably be admitted to follow, 
 that if the Bank, during any one week of these examinations, 
 had carried a single 100,000/. of gold to the bullion market, 
 in addition to the gold which they actually issued, and had sold 
 it there without reserve, or at a price below that of the market, 
 that this operation would have caused a fall of 1 or 2 per cent in 
 gold ; and thus have given to the committee a measure of the 
 existing depreciation, different from, that which they acted on. 
 It will be equally agreed, that a single 100,000/. withheld, of 
 that gold actually issued at this time, would have ckused an 
 advance of gold of 1 or S per cent ; and thus have given what 
 would have been taken by the committee, as a higher measure 
 of depreciation. Individuals conversant in the bullion market 
 at that time, and daily making purchases or sales in it, have 
 informed me, that the effect of those issues by the Bank was 
 precisely as is here described ; and that the dealers in bullion, 
 throughout this whole period from 1817, to the sitting of the 
 committee in 1819, did uniformly, in fomaing in one week their 
 estimate of the probable price for the next, refer to the probable 
 amount of gold which could be drawn from the Bank. Their 
 common calculation was this: if the notes which draw gold 
 from the Bank shall prove to be exhausted, gold will 
 advance immediately beyond its present price. If fresh 
 notes draw out a new supply of bullion from the Bank, there 
 will be no advance. This was not, it is to be observed, a 
 mere sum of 100^000/. thrown on the Exchange market, but a 
 sum of nearly seven millions. It was after the rate of 100,000/. 
 a week, for nearly 70 successive weeks, extending throughout the 
 whole of the year 1818, and commencing in the Autumn of 1817.
 
 39 
 
 It was thrown upon the market without reserve on account of 
 price ; and was issued constantly at a rate, beneath the regular 
 price of the market. That this operation must have greatly 
 influenced the price of bullion during this period, cannot be 
 disputed ; and when it is observed, that even under the influence 
 of these sales, so great was the tendency of bullion to advance, 
 that it still rose to 4 or 6 per cent above the mint price ; it will 
 seem a probable conclusion, that except for these sales, the price 
 of bullion would have advanced at this period in an equal degree 
 with the prices of property and commodities. It is surely an 
 extravagant mode of reasoning, which can persist under such 
 circumstances as these, in considering the price of bullion as a 
 measure of the depreciation on the value of money ; and which* 
 after finding that property and commodities had advanced 40 or 
 50 per cent, or in other words, that money had actually depre- 
 ciated 40 or 50 per cent, in reference to property and commodi- 
 ties ; can still proceed to maintain, that the depreciation of money 
 was in fact, no more than 6 per cent ; and that all further 
 advance of price which accompanied this depreciation, must be 
 accounted for by some obscure and unintelligible theory, the best 
 which can be produced for the occasion. 
 
 An examination of the fall of prices from 1818 downwards, 
 will elucidate, in some degree, the advance from 1816 to that 
 time. Mr. Tooke ascribes that fall, as usual, to increased sup- 
 plies ; a diminished occurrence of purchases and sales on credit ; 
 and " a diminution of that part of the circulating medium 
 " which does not consist of Bank-of-England notes or coin." 
 These causes are all of them unconnected with any reduction in 
 the notes of the Bank of England. " The conjoint operation 
 " of those causes," (the three above stated) " rendered the re- 
 " storation of the currency inevitable, unless the Bank of Eng- 
 " land had resorted to an overwhelming increase of its issues pur- 
 " posely to prevent it.'"' So that Bank-notes being depreciated 
 to the extent, at one time, of 6 per cent, as compared with gold, 
 that depreciation was capable of being restored by abundance of 
 commodities ; by diminished purchases on credit ; and by dimi- 
 nution of private paper. 
 
 " To prove that these causes were amply sufficient to occasion 
 " a restoration of the value of the circulation, without any con-
 
 \ 40 
 
 « traction of the basis oi" the currency, it is only necessary to 
 " refer to the declaration of the Governor of the Bank, who 
 « stated, in a Court of Proprietors, of 21st March, 1822, that 
 " < if the Bank had erred it was not on the side of a reduction 
 " ' of the circulating medium ; for, upon looking at the amount 
 " ' of their issues, he found that on the 9th March, 1822, their 
 " ' issues exceeded, by the sum of 3,859,000/., those of the 
 " ' same date in the preceding year (9th March, 1821), and 
 " ' that the latter exceeded the issues of the 9th March, 1820, 
 " ' by the sum of 3,440,000/. It was, therefore, quite clear 
 " * that the repayment of the government debt called for in 
 " ' July, 1819, did not induce the Bank to diminish their issues, 
 *' ' for they had been increasing them in the years which have 
 " ' since followed." ' To which it may be answered, that if this 
 declaration, as it is thus quoted, be admitted to prove this pro- 
 position, it must be admitted also to prove much more ; for not 
 only does it state that no diminution " of the basis of the cur- 
 rency^' took place during this period ; but further, that a great 
 addition was then made to the basis of the currency; that is to 
 say, of no less an amount than 7,299,000/. 
 
 That there was some fundamental error in this statement, 
 ought to have been manifest to Mr. Tooke, when he brought it 
 forward as proof that the value of the currency had been raised, 
 without any " diminution of its basis." In April, 1822, Mr. 
 Ricardo had pointed out in what the error of the Governor of 
 the Bank consisted, and explained that it had arisen from the 
 circumstance of his having confounded the issues of sovereigns 
 with the issues of Bank-notes. Mr. Ricardo, by means of taking 
 into account notes of 5/., and upwards, alone ; and excluding 
 both notes of 1/. and sovereigns, prepared another estimate re- 
 specting " the diminution of the basis of the currency" in place 
 of that which Mr. Tooke has quoted. His estimate is this — 
 
 Feb. 1818 <£>.19,0T7,957 
 
 1819 16,148,098 
 
 1820 ....' 15,393,770 
 
 1821 15,766,270 
 
 1822 15,780,770 
 
 Exhibiting an undeniable diminution to some extent, at least, of
 
 41 
 
 " the basis of the currency." The extent there will presently 
 be occasion to examine further ; but, in the mean time, we 
 will proceed with Mr. Tooke's argument, ' who, overlooking 
 this statement altogether, proposes to confirm the declaration of 
 the Governor of the Bank by the opinion of Mr. Turner, an 
 extract from a work of whom has been just referred to. Mr. 
 Tooke, it is to be observed, in the whole of this present ques- 
 tion, refers to two distinct periods, without marking the distinc- 
 tion. When he speaks of the fall of prices, the cause of which 
 is in dispute, he refers to the fall of prices which commenced 
 early in 1818, or at the end of 1817. But when he speaks of a 
 *' diminution of the basis of the currency," and denies that the 
 Ml of prices in question was in any way occasioned by such 
 diminution, he refers to a period commencing at the passing of 
 the act of 1819- This mode of argument embarrasses the sub- 
 ject until the confusion of dates is cleared up. It stands, then, 
 thus : if no reduction of Bank-notes has taken place since 
 1819, it follows that a fall of prices, commencing in 18J7, was 
 not occasioned by a diminution of Bank-notes. Whilst the 
 state of facts is, that a great and systematic reduction of Bank- 
 notes commenced in 1817, and was, in a great measure, com- 
 pleted in 1819 ; at which latter period a reduction of country- 
 bankers'' paper, occasioned necessarily by the diminution of the 
 notes of the Bank of England, was in the midst of its operation. 
 When the pamphlet of Mr. Turner is quoted^ where that gen- 
 tleman declares that Mr. Peel's Bill had operated on the Bank 
 only as a dead letter, this distinction between the date of Mr. 
 Peel's Bill and the fall of prices, denied to have been occa- 
 sioned " by any diminution of Bank-notes," is forgotten to be 
 pointed out. That the measures of the Bank, for returning to 
 cash payments at the old standard, had been arranged with the 
 government, and were, at the passing of Mr. Peel's Bill, carried, 
 in a great degree, into effect, no one now doubts. But, at the 
 commencement of 1819, many disbelieved in the existence of 
 such measures, and, in fact, believed that it never was the inten- 
 tion of either the Government or the Bank to proceed to cash pay- 
 ments at all. Amongst those who appear to have held this opinion, 
 was that body which forms what is called the regular opposition 
 m parliament. These gentlemen undoubtedly disbelieved 
 
 G
 
 42 
 
 the professions so frequently made by the Government and by 
 the Bank, of their desire to re-establish cash payments. The 
 administration took advantage of their incredulity, and, by the 
 committee of 1819 (which inquired into nothing essential to the 
 measure before them, and which disclaimed all intention of so in- 
 quiring), and by the Act brought in by Mr. Peel, upon the 
 Report, the signature, as it were, of the heads of the opposition 
 party, was procured to that bond which has since excluded them 
 from place ; and this was the main object for which the committee 
 was appointed, if a judgment can be formed from the course 
 which they pursued. If the opposition had stood aloof at that 
 time, and had refrained from committing themselves to the sup- 
 port of a return to the old standard of 1792, at that critical 
 period, when the steps for re-establishing that old standard were 
 nearly complete, but when its effects were yet to be felt on the 
 country, they would, before this time, have driven their 
 opponents from place, amidst the universal execrations of the 
 country, as men who had attempted to put in execution a more 
 extensive system of public and private injustice than had ever 
 before been developed. Although, therefore, the particular Act 
 called Mr. Peel's Bill, has appeared to Mr. Turner as a mere 
 dead letter, it is to be doubted if that bill were held in any such 
 estimation by lord Londonderry, Mr. Vansittart, or Mr. Huskisson. 
 They viewed this bill, he may rest assured, as a much more im- 
 portant document than he does. Mr. Tooke, when he quotes 
 Mr. Turnery's declaration respecting the issues of the Bank, that 
 they had not been diminished, overlooks the reasons immediately 
 afterwards stated, on which Mr. Turner founds that declaration; 
 and which reasons the least attentive observation of, would show 
 to be erroneous. Mr. Turner'^s statement is founded on an ac- 
 count which he gives of notes in circulation in the years 1815, 
 1816, 1819, 1820, 1821, and 1822, out of which account, as will 
 be seen, the years 1817 and 1818 are left ; whilst those years are, 
 in reality, the most important from which a proper comparison can be 
 made, of that diminution of Bank paper, which has accompanied 
 the late fall of prices ; for those are the years of the highest 
 circulation of notes, and of the highest range of prices. 
 The reason of Mr. Turner omitting these two years, is 
 founded on a singular mistake. He says, that he
 
 43 
 
 omits those two years, because " a large number of country 
 *' banks failed in those years, and a run took place on many of 
 ** the most respectable establishments." The manner in which 
 numerous failures amongst the country banks affect, tempo- 
 rarily, the amount of Bank of England paper, there will be 
 occasion presently to advert to ; but, at present, the question is 
 as to the fact of such failures at this particular time. By refer- 
 ring to the tables, the failures amongst the country bankers will 
 be found to have been, in 1815, 26 ; in 1816, 37 ; in 1817, 5 ; 
 in 1818, 6. The period, therefore, is evidently mistaken, during 
 which the failures amongst the country bankers took place; 
 and, that mistake corrected, the years 1817 and 1818 must be 
 restored to the list, and the years 1815 and 181G struck out. 
 The failures in 1817 and 1818 were extremely few ; those were 
 of minor importance ; nor did any run take place in those years 
 on any considerable establishments. The actual extent of re- 
 duction in the notes of the Bank of England, which took place 
 during the reduction of prices, the origin of which is now in 
 question, has been given by Mr. Turner in another place ; and, 
 as there can be no better authority, I insert his account here. It 
 omits the two years 1815 and 1816, and replaces the years 1817 
 and 1818. [See Mr. Turner's Letter to Mr. Peel, page 66.] 
 
 Aug. 16, 1817, Bank-notes * £.Q0,U%661 
 
 Nov. 16, Ditto 29,446,087 
 
 Feb. 16, 1818, Ditto 28,742,826 
 
 May 16, Ditto 27,985,839 
 
 Aug. 15, Ditto 26,603,997 
 
 Nov. 14, Ditto 26,026,540 
 
 Feb. 13, 1819, Ditto 25,680,114 
 
 Mr. Turner's account proceeds thus far ; and, by further 
 accounts it appears that, 
 
 May, 1819, Bank-notes stood at =^.23,900,000 
 
 ^^ r 26,000,000 return, "» 
 °' \ perhaps doubtful J 
 Nov. Bank-notes 24,000,000 
 
 * The highest amount of Bank of England notes about this period 
 appears to have been Aug. 9, 1817, when the amount was 30,920,300/.
 
 44 
 
 Feb. 1820, Bank Notes 24,000,000 
 
 May Ditto 23,900,000 
 
 Aug. Ditto 24,400,000 
 
 Nov. Ditto 23,400,000 
 
 And at this period the joint issue of Sovereigns and 1/. 
 notes, confounds the accuracy of any farther comparative state- 
 ment thus taken; but, if we adopt Mr. Ricardo's method of 
 computation, it gives a similar comparative result, and carries it 
 to the present time. 
 
 November 1817, Notes of i'.S and upwards 19,600,000 
 
 November 1818, ...16,900,000 
 
 November 1819, (I have no account) 
 
 November 1820, 15,300,000 
 
 November 1821, 14,800,000 
 
 May 1822, 14,600,000 
 
 There is here, then, a great and regular diminution of " the 
 basis of the currency," commencing a little before that great fall 
 of money prices, which is ascribed at one time in a great measure 
 to a contraction of private paper ; and which at another time, it is 
 said " may be equally accounted for, by circumstances connected 
 " with the supply of commodities, relatively to the average rate of 
 " consumption, and finally, as the result of the whole," that 
 this fall of prices did not arise out of any measures connected with 
 the Restriction bill, except as far as a fall in the price of gold 
 indicates, v/hich fall was no more than from 4 to 6 per cent. 
 
 Mr. Turner, as has been seen, considers that the nominal 
 amount of the circulation of the Bank, is to be considered with 
 reference to the state of the country circulation. His words are, 
 " It is true I have placed out of consideration, the years 1817 
 " and 1818, and I have done so because it would be inconsistent 
 '^ with any degree of fairness, to calculate upon those years, as 
 *' showing the extent of the average demand for Bank-notes. It 
 " is quite notorious that in those years, a large number of 
 " country banks failed, and a run took place upon many of the 
 " most respectable establishments, so that they were obliged to 
 " convert a considerable portion of their floating securities into 
 " Bank-notes, in order to guard against a sudden panic. It
 
 45 
 
 ** has so happened, however, that many of the notes issued in 
 *' those years from the Bank, in consequence of this unusual 
 " demand, never got into general circulation, and in many 
 " instances they have been returned precisely in the state they 
 " went out of the Bank, without having passed into any other 
 " hands than in those of the comitry banker and his town agent." 
 These observations are perfectly just, and convey very im- 
 portant information, though it is manifest that in a singular 
 manner, the years are mistaken to which they apply. There 
 were never fewer failures amongst the country banks, nor less 
 alarm, than in the years 1817 and 1818, nor was their circula- 
 tion placed at any time in a greater state of discredit than in 
 1815, and the former part of 1816. The period of 1793, of 
 1810, and that of 1814, 1815, and the early part of 1816, have 
 been the three periods of failure and discredit to the country cir- 
 culation. These observations respecting the manner in which 
 the Bank of England circulation, ought to be considered with a 
 reference to the state of credit of the country circulation, agree 
 with observations of a similar nature, which will be found in a 
 Speech of Mr. Manning's, reported in " Hansard's Parliamen- 
 " tary Debates," for 8th December, 1812. This gentleman 
 then observed: " In July or August 1810, it would be remem- 
 " bered that the number of notes in circulation, was about 
 " twenty-five millions sterling ; but this excess was occasioned by 
 " the failure of two large houses in London, which produced a 
 " considerable sensation in the country. Bankers in the various 
 " principal towns, then made demands upon the Bank, to ensure 
 " themselves against the consequences of a run upon their firms ; 
 " but within six months the greater part of three millions was 
 *' returned to the Bank of England, without having been em- 
 " ployed. It could not, therefore, with justice, be said, that 
 " the issue of Bank-notes at this time was excessive, or that the 
 " high price of bullion had been occasioned by it." The 
 manner thus appears, in which we are to make allowance for one 
 essential circumstance, in estimating the nominal amount of Bank 
 of England paper, with reference to the state of the country 
 bankers circulation. When the credit of that circulation is low, 
 in consequence of numerous and sudden failures, the whole 
 amount of Bank of England paper, which appears on the ac-
 
 46 
 
 counts, ought not to be considered as in actual circulation, or 
 in a state in which it is capable of advancing prices, or of depre- 
 ciating paper. 
 
 This consideration will explain a circumstance which has 
 involved Mr. Tooke in frequent error. It will explain, why he 
 sometimes found an increase of the notes of the Bank of Enorland 
 taking place, during a period distinguished by no advance of 
 prices ; and from which he draws a conclusion, that the 
 amount of Bank-notes, and the scale of prices had no material 
 relation one to the other. It will explain further, how it was, 
 that a great reduction of country paper took place in 1810, 
 accompanied with an increase of Bank of England paper. This 
 is the period to which Mr. Manning refers ; and in this observation 
 of his, will be found a solution of contradictions which 
 appeared on some other occasions, between the variations in the 
 circulation of the Bank, and that of the country bankers. 
 At particular times, the country circulation has been reduced, 
 whilst the Bank circulation appears nominally to have in- 
 creased ; and again, at other times the country circulation has 
 increased, whikt that of the Bank appears to be lessened, by the 
 return to the Bank of those notes which were held by the coun- 
 try bankers in their alarm. It has been erroneously inferred 
 firom this, that the country circulation during the Restriction 
 bill, was not dependant on the Bank of England circulation, for 
 its extension and limit. 
 
 We learn, then, from Mr. Manning, that in the latter part of 
 1810, Bank-notes, amounting to " the greater part of three mil- 
 " lions,"' although in circulation, yet remained in a situation in 
 which they were not capable of raising prices or depreciating paper ; 
 that this circumstance arose out of failures, and alarm amongst the 
 country bankers. The number of country bankers that became 
 bankrupt in 1810, appears to have been 26. In the years 1815 
 and 1816, the number appears as 26 in the first year, and in the 
 latter 37. In the early part of 1816, the discredit of the country 
 circulation was at its height. It was in that part of the year, or 
 prior to August in that year, that nearly the whole number that 
 became bankrupts in 1816, suspended their payments. If the 
 greater part of 3 millions of Bank notes, therefore, were locked 
 up and withdrawn from actual circulation, by the alarm of 1810,
 
 51 
 
 it is by a very moderate computation that we deduct 3 millions of 
 Bank notes, from the notninal circulation of the Bank during 
 the failures which occurred in 1815, and early in 1816; and that 
 we consider these 3 millions as having been returned to the Bank 
 in the latter part of 1816, when confidence became re-established. 
 After making this deduction, we shall see the actual, or 
 effective circulation of the Bank, in the early part of 1816, stand- 
 ing at little more than 23 millions. Taking May 1816, and 
 allowing for 3 millions locked up with the country bankers, the 
 effective circulation will stand at 23,300,000/. This circulation 
 was increased by the autumn of 1817, to 30,1 12,661/, ; the whole 
 of which latter sum, must be taken to have been in effective 
 circulation, and operating upon prices. We have subsequently 
 seen the circulation of the Bank reduced again to 23,400,000/.5 
 on which level it may be taken at present to remain. 
 
 The circulation of the Bank of England, then, having been 
 reduced since the autumn of 1817, from 30 millions, at which 
 it then stood, to between 23 and 24 millions, at which it must 
 be taken now to stand ; there exists abundant evidence to show, 
 that a reduction of country paper commenced in 1818, and that 
 it has since proceeded. It followed the reduction of the notes of 
 the Bank of England, and was a consequence of that reduction. 
 There have been no failures amongst the country bankers since 
 1816 : no contraction of their paper can be shown, but what has 
 been necessarily forced on them, by the contraction of the Bank 
 of England circulation. And it would appear also, as far as an 
 opinion can be formed, by a reference to the produce of the stamp 
 duties on bills of exchange from year to year, that there has 
 taken place no reduction in private paper generally, during this 
 last period, which has not also followed and been produced by the 
 reduction of the paper of the Bank. 
 
 For the opinion, that during the fall of prices from 1817 and 
 1818 downwards, there has taken place a great reduction of 
 country bank paper, in consequence of any circumstances 
 peculiarly affecting the country bankers, there is no founda- 
 tion whatever. Nor does the assertion, that a great reduction in 
 private paper has been in a similar manner effected, rest 
 on better ground. It cannot be shown, that there has been any 
 greater diminution of either of these descriptions of paper, than
 
 48 
 
 a reduction of 6 or 7 millions of Bank of England notes would 
 have forced upon the issuers, whatever had been the existing cir- 
 cumstances of supply and demand. So great a fixed portion of the 
 notes of the Bank of England, are occupied at all times in the 
 operations of the revenue, whatever their circulation may be, that 
 a reduction of one-fourth, or one-fifth of Bank of England notes, 
 is calculated to occasion a greater proportionate redviction than 
 that, of all other paper. The notes absorbed by the revenue^ do 
 not act on the country paper. We cannot estimate the extent 
 to be allowed for this; though it is certain that it must be 
 considerable. We may state, however, that whatever may be 
 the variations of supply and demand which are supposed 
 to exist ; the country bankers and the issuers of private paper, 
 could no more maintain their circulation on the level of 1817 and 
 1818, after the circulation of the Bank of England had been 
 forcibly reduced from 30 millions to 23 millions, than the Bank 
 of England itself could maintain a circulation of 30 millions, 
 whilst its notes were payable in gold, at SI. 17s. lOjd. an ounce. 
 One reduction must follow the other ; we may deceive ourselves 
 with theories regarding supply and demand, of production exces- 
 sive, or inadequate, with partial accounts of the quantities of par 
 ticular commodities, and with causes of exception formed into 
 general rules ; but we must return at length to this : that 
 SI. 17jy. 10|d. for gold, limits without remedy, the amount of the 
 circulation of the Bank ; it limits irremediably, the circulation of 
 private paper of whatever description : and that the lim.ited 
 amount of money thus permitted to circulate, limits the range of 
 all prices estimated in money. 
 
 It would be easy to show, by what process it is, that a reduc- 
 tion of paper money thus effected, reduces the prices of property 
 and commodities ; to trace the details of that process ; and to 
 explain how it necessarily produces those appearances in the markets 
 of commodities, which have bewildered Mr. T'ooke, and many 
 others with him, but it is not necessary. Sufiice it to 
 say, that while it is certain that a reduction of the quantity of 
 money in circulation, necessarily occasions a reduction in the 
 monied prices of all commodities; it is of equal necessity, that 
 the price of no commodity whatever can decline, without some 
 alteration in its relative proportion of supply and demand. The
 
 49 
 
 manner, therefore, in which a lessened quantity of money reduces 
 monied prices, is by operating on those ulterior principles by 
 which supply and demand are themselves governed. A scarcity 
 of money makes an abundance of goods. Increase the quantity 
 of money, and goods become scarce. The relative proportion 
 between money and commodities can never alter without pro- 
 ducing these appearances. Mr. Tooke, and 3Ir. Ricardo, will 
 find in this obvious principle, an exposition of many of the diffi- 
 culties and inconsistencies in which thpy have involved the subject. 
 It is not true, that the advance of prices from 181G, 
 preceded the increased issue of Bank of England notes of that 
 period, any more than it is true, that the subsequent fall of 
 prices preceded the reduction of Bank notes commencing in 
 1817. The fact is precisely the reverse of this. It was in the 
 early part of 1816, that the Bank of England consented to ad- 
 vance 9 millions * on loan to government ; on which, and on a 
 subsequent advance, the increased issues of the period referred to 
 were founded. In what manner was it that the Bank of England 
 made this advance ? Not in gold ; for it is known that they 
 issued none at this time. Not by disposing of Exchequer bills; 
 for that would have been a reduction of their advance to govern- 
 ment on the one hand, whilst they were increasing it by agree- 
 ment on the other. Not by calling in their advances to the 
 merchants ; for at the period when this loan of 9 millions was 
 agreed to, the conduct adopted by the Bank, in its transactions 
 with the mercantile body, then in a state of extreme depression 
 and distress, was, that they afforded that body an extraordinary 
 degree of assistance and accommodation. How, then, was this 
 sum of 9 millions advanced .'' If the Bank neither advanced it 
 in gold, nor by calling in other debts, it must have been of 
 necessity advanced by issues of notes. As these notes, issued 
 without any equivalent being given for them by the public, fell 
 into the circulation, the scarcity of circulation that had been pre- 
 viously felt, Ixicame relieved. The mercantile body, supplied 
 with a greater abundance of circulation, refrained from carrying 
 
 * The actual advance on loan in 1816, appears about 7 millions. To 
 this a considerable further sum mu-it be addcl, for governnxent balances 
 then withdrawn. 
 
 H
 
 50 
 
 their bills for discount to the Bank. Bank notes existed in 
 abundance in circulation, whilst the merchants were left in pos- 
 session of their bills of exchange^ which they knew would at all 
 times command other Bank notes. Confidence being thus re-esta- 
 blished, the notes which had been held in a dormant state by 
 the country bankers, were returned to the Bank, in re-payment 
 of advances by the Bank to the merchants. They were re-issued 
 by the Bank in their advance to government. The immediate 
 result of this operation therefore, was, an addition of about 3 
 millions to the effective amount of Bank notes in circulation ; 
 and a change of the security on which another 6 millions was 
 advanced, from a mercantile to a government security. Instead 
 of that 6 millions of circulation being founded on 6 millions of 
 bills of exchange, locked up in the chests of the Bank, as was 
 the case in the former part of 1816; that circulation was founded 
 in the latter part of 1816, on an advance to government, and 
 existed in conjunction with the '6 millions of bills of ex- 
 change, which remained in the hands of the merchant. No man 
 acquainted with the details of what is called the money market, 
 will consider this as a trivial operation. If it had been accom- 
 panied with no additional issues of Bank-notes whatever : if no 
 3 millions additional effective circulation had been thrown out ; 
 the circumstance alone of 6 millions of Bank-notes having under- 
 gone a change in the security on which they were issued ; having 
 been issued on advances to government instead of havingf been 
 issued on the hills of the merchants, was of itself calculated to 
 operate immediately on the value of money. It left a power in the 
 hands of the merchant of adding at any time 6 millions to the cir- 
 culation, and each merchant who possessed his portion of that power 
 felt himself at liberty to make a more active use of the notes in his 
 possession. Those who ascribe so much influence on prices to 
 the circulation of bills of exchange, will see in this operation, 6 
 millions at once added to the amount of bills of exchange in cir- 
 culation, and 3 millions at the same time to the effective circu- 
 lation of the Bank ; and this took place immediately after the 
 spring of 1816. " The debt of the government to the Bank" 
 say the Bank Committee Reports, " was increased between Fe- 
 bruary and August 1816."" TJiis operation therefore (on which 
 was founded, and which was the commencement of the increased
 
 m 
 
 issues of the Bank at this period) immetllately prcceilcd that 
 " tendency to a general advance in prices," that " general looking 
 " up of the prices of commodities,"" which Mr. Tooke savs, he 
 observed (and doubtless did observe, for they were the necessary 
 consequences of this operation) " in the last six months of 1816." 
 The facts, therefore, with reference to the high prices oi* 
 1818, stand thus : — Beginning with 1814, a considerable reduc- 
 tion in the Bank circulation was effected. In 1815, and 181G, 
 money of the old standard-value was restored. It circulated at par 
 with our paper money. We have now established this old standard 
 again ; money of that value again circulates on a par with, reaper* 
 Monied prices estimated in this standard fell in 1815 and 1816 > 
 and now again stand at the level of money price which the old 
 standard formerly gave. But this period from 1815-1816, to 
 the present time, has not been one uiiintcrruptcd period of low 
 prices, and of money of the old standard : 1817 and 1818 in- 
 tervened, in which the attempt to maintain the old standard, was 
 for a time abandoned. An extension was given to the Restric- 
 tion act. The Bank changed the basis of a part of its circula- 
 tion, from one which locked up the bills of the merchants, to one 
 which restored those bills to circulation. And the Bank in ad- 
 dition to this, made a positive increase, which may be taken at 
 6 or 7 millions, to its circulation of notes. 
 
 During this suspension of the old standard, and of the mea- 
 sures necessary to maintain it, prices advanced to the rate of the 
 war prices. These were not the prices of scarcity ; for they were 
 accompanied with an extraordinary degree of prosperity, amongst 
 all classes. The revenue, which had rapidly fallen off in 1815, and 
 1816, and which again greatly fell off in 1819 and 1820, expe- 
 rienced a rapid increase in 1818, to an extent, of which no other 
 instance can be given. Gold bullion evinced a strong tendency 
 to advance greatly in price, but was prevented from advancing 
 beyond 5 or 6 per cent, in consequence of great sales by the Bank. 
 The prosperity of that time extended alike to agriculture, to ma- 
 nufactures, to commerce, to the shipping interest, to the revenue, 
 and every other essential interest of the state. It was no more than 
 the case which the country felt, when its contracts of all kinds, 
 and burthens, were again exacted in money of that value in wjiitK 
 tluy had been founded.
 
 with respect to an expansion and contraction of private paper 
 and credit, unconnected with " the Basis of the Currency ;" the 
 increased circulation here referred to has had no such dubious 
 and obscure origin. The addition made to the notes of the 
 Bank of England in 1816, and 1817, was a pure emission of 
 an inconvertiblfe paper money, in no manner whatever arising 
 out of any previous increase of prices, nor out of the connexion 
 between the Bank and the mercantile body. The subsequent 
 diminution of the notes of the Bank from the latter part of 1817, 
 downwards, was the result of a regular and gradual system for 
 withdrawing again from circulation, that inconvertible paper 
 money which had thus been poured into it. This reduction in 
 the amount of Bank-notes was in no way connected with any pre- 
 vious fall of prices, and consequent reduction of demand, on the 
 part of the mercantile boi!y, for advances from the Bank. It 
 preceded the fall of prices, and was effected during a continually 
 increasing demand on the part of that body for advances from 
 the Bank. 
 
 The increase of private paper of all kinds, which took place 
 from 1816 to 1818, followed the increase of Bank of England 
 notes : the reduction of private paper from 1818 to the present 
 time, has followed the reduction of Bank-notes also. Both 
 were the necessary consequence of these operations ; and there 
 is no reason whatever to believe, that private paper either 
 increased, or diminished at this period, in a greater proportion 
 than the altered circulation of the Bank admits, and limits. 
 There is no reason for thinking that private paper had increased 
 in 1818, in any greater degree than would have been maintained if 
 the circulation of the Bank of England had been maintained also. 
 That the high prices of the war, and the low prices of the pre- 
 sent time, have been occasioned by our alterations from one 
 standard to another, the situation of the country in 1818, 
 the experiment of that time as it may be termed, affords 
 irresistible evidence. The year 1818 was a period removed from 
 the influence of the war and its operations. But the old standard 
 was suspended: the Restriction act, and its money v ere re- 
 established : and prices advanced to the prices of the war.* 
 
 * It was early in 1616 thai Ihc Kestiiclion acl, v/hieh liad been fixed to
 
 53 
 
 .To trace the exact correspondence between the alteration in 
 the quantity of money, and the alterations in monied prices, in 
 this instance, is not here undertaken, nor can it be done, without 
 further means of information, than those which we now possess^ 
 Our information, however, respecting the forced changes made in 
 the quantity of money, is much more perfect, at this period, 
 than at any other, and they are adequate to the effects produced^ 
 and which followed them. Money does not rise or fall in value, 
 under the circumstances which we are placed in, in exact pro- 
 portion to its diminution or increase. That proportion is de- 
 ranged by many circumstances. We see the alterations in the 
 value of our money in their effects ; but we cannot trace their 
 exact correspondence. Instead, therefore, of attempting to trace 
 more exactly the manner in which the operation of 1818 pro- 
 duced that effect which undoubtedly arose from it, it is more 
 useful to point out some of those circumstances which tend to de- 
 range or distract our computations, of the correspondence between 
 the value of money, and its apparent amount. 
 
 The notes of the Bank of England form the only part of our 
 circulation, with the amount of which we are acquainted. In 
 what proportion during a Restriction act the notes of 
 the country bankers, and private paper of all descriptions, enlarge 
 or contract, with the increase or reduction of Bank-notes, we have 
 no means of forming an estimate. Fifty millions of taxes 
 remitted to the Exchequer annually, in notes of the Bank of 
 England, and again dispersed throughout the country, occupy 
 a certain portion of the Bank of England circulation. This por- 
 
 expire in six months after peace, and which had been renewed for one or 
 two short further intervals ; was at once renewed for 2 years from the en 
 suing July. Mr. Horner, in his speech of May 1816, on this renewal 
 said, " Let not the right hon. gentleman flatter himself, that if the Bank 
 " of England were to issue their notes to that extent which they were 
 " likely to do upon the enactment of his bill, the country banks would 
 " not return to their former practice, and the rate of prices be affected by 
 '* that practice. The House should therefore be prepared for such conse- 
 ** quences, and in due time consider how to provide against them.'' 
 These consequences have followed ;'and the only provision made, has been, 
 to reverse the operation. The Bank of England issued immediately its 
 notes to as great an extent, as during any period of the war. Tlic country 
 bankers did the same : and conesponding prices followed.
 
 54- 
 
 tion which is alv/ays the same, whether the circulation be 23 
 millions or 30 millions, does not act on the increase or dimina- 
 tion of private paper. Any increase or diminution of the notes 
 of the Bank of England, forms an increase or diminution of that 
 part of their circulation, not occupied in transmission of taxes ; 
 and it necessarily forms a greater proportion of this part of the 
 circulation, which alone affects the country paper, than of the whole. 
 If the taxes had been reduced in proportion as the money was 
 withdrawn, we should have found it to require a far greater 
 reduction of Bank paper .than one of 6 or 7 millions in 30 
 millions, to introduce and fix gold at SI. 17s I0{d. an ounce, and 
 wheat at 4i5s. per quarter. It has been seen in what manner a com- 
 putation drawn from the nominal amount of the Bank circulation, 
 might be deranged, by not taking into view the state of credit of 
 the country circulation from time to time. A still more important 
 character in the Bank circulation, is the basis on ■yvhich it has 
 been from time to time issued : and of this we have little informa- 
 tion. But in forming an estimate at any time, of the nominal 
 amount of the notes of the Bank, as to their effect on prices ; this 
 circumstance is of great and material importance. Circulated 
 by means of advances to the merchants, for every Bank-note 
 which appears in the circulation, a bill of exchange is withdrawn 
 from circulation ; but when the notes of the Bank are circulated on 
 advances to government, their bills of exchange remain in the 
 hands of the merchant ; and in their hands operate as a credit 
 which they possess upon the Bank, which would enable them at 
 any time to draw out a further supply of notes. Would it be 
 of little consequence as to the efficacy of such a circulation, whe- 
 ther 20 or 30 million of Bank-notes circulated, as the repre- 
 sentatives of an equal amount of bills of exchange withdrawn 
 from circulation (If the transactions in which bills of exchange 
 perform the use of money can be so called), and locked up in the 
 cellars of the Bank ; or whether the same amount were issued 
 in advances to government, and existed in the channels of cir- 
 culation, not by abstracting another species of money from those 
 channels, but in conjunction with that other money ? Would 
 the channel of circulation be equally full, in both these cases? 
 Could it support the same prices ? A Bank circulation 
 founded on bills of exchange, rctuins every two months tlie
 
 tvhole of it to the Bank ; and is again each two months re- 
 issued. Notes advanced to government exist permanently in 
 circulation.^ One circulation is fixed ; the other remains for 
 
 * Suppose that a circulation of 30 millions of Bank-notes were supported 
 by advances to the merchants ; and further for the purpose of seeing the 
 details of that operation, that all the bills of exchange on which these 
 notes were advanced, fell due on one day. The merchants would 
 apply to the Bank to renew the advance. The manner in which such ap- 
 plications are made, is, to send other bills to the Bank ; and the manner in 
 which an answer would be given by the Bank to such applications, if 
 granted, would be by advancing fresh notes on these new bills. But the 
 merchants each acting individually could not postpone safely their applica- 
 tions, until the particular day on which their first bills became due ; they 
 would apply at a period more or less early : and the average of the whole 
 applications may perhaps be taken at seven days before'the day of the first bills 
 falling due; for the Bank only receives applications of this nature on one day in 
 a week, if the bills proposed are dated in London. For seven days there- 
 fore 60 millions of Bank-notes would appear in the circulation, of which 
 30 millions would be useless, and would be a mere provision for the 30 
 naillions of bills falling due. Thus there would appear seven days in each 
 two months, 60 millions of notes in circulation, to support the same aver- 
 age value, as would be supported by 30 millions, if issued on a permanent 
 advance. The bills would not, it is tme, all fall due in one day as here as- 
 sumed. They would fall due over a period of about 60 days: and over that 
 period would this operation be divided ; so divided there would be 3 or 
 4 millions of Bank-notes constantly retained as provision for the bills 
 falling due, and occupied in fact in performing the business of these re- 
 newals. So that 30 millions of Bank-notes in circulation, issued on such 
 a basis, would be equal to no more than 26 or 27 millions issued on a per- 
 manent advance to government. Three or four millions would be occupied 
 in renewing bills, or some such amount, for it is not pretended to be ex- 
 actly estimated ; and this constitutes a difference between a circulation of 
 notes advanced to government, and one advanced to the merchants, wiiich 
 acts in addition to tlie effect of the one withdrawing bills of exchange 
 from circulation, which the other does not; and in addition also to the 
 efi'ect produced, by the uncertainty of a circulation being renewed, whicli 
 falls in, and is returned each two months. In effect the restraint, uncer- 
 tainty, and difficulty, are very great, under which a circulation labours, 
 any considerable proportion of which is to be returned to the issuers once 
 in each two months, and which circulation issued on such conditions, has 
 yet to perform offices so important, both in supporting the operations of 
 the revenue, and of commerce, as tliose whicli the notes of the Bank of 
 England discharge with us. So difficult, indeed, and laborious, is the move-
 
 two months, and is subject to the uncertainty of being at the end 
 ot'each two months withdrawn or reduced in amount. This is one of 
 many circumstances opposed to all our calculations as to prices, 
 drawn during the war from the nominal amount of the Bank 
 circulation. That nominal amount baffles all calculations 
 founded, upon it, and without a view of all the circumstances on 
 which it is founded, serves mostly only to mislead. But I apply 
 tills observation at present no further than to the circulation of 
 30,000,000/.; (at one time 30,900,000/.) in August 1817. The 
 notes of the Bank of England were never issued at any time, 
 more entirely on advances to government, than at this time.* 
 The Bank never possessed a smaller amount, probably, of bills 
 of exchange. The bills of the merchant remained then in the 
 channels of circulation, and acted there in conjunction with 
 SO millions of the notes of the Bank. 
 
 During the war, and until towards its close, a large amount of 
 the old gold circulation remained in the country, in conjunction 
 with the paper circulation. This gold operated, parf, of it as 
 a reserve in the chests of the country bankers, and spared 
 therefore the use of Bank-notes. It necessarily supplied, in 
 some degreej the demands of all those by whom money is hoarded. 
 In a commercial country it is to the most active part of its monied 
 circulation, that an increase of money flows. It is from the most 
 active part of that circulation, that any reduction is supplied. 
 
 ment and effect of a circulation so circumstanced, that the directors of the 
 Bank have been right, thongh their opinion was thought to be wrong, when 
 ihey have told different committees, that their circulation could not be ex- 
 cessive, as long as it was confined in its issue to the discount of bills of 
 exchange, founded on real mercantile transactions. The Bank directors 
 hare always expressed one uniformly consistent opinion, respecting the 
 importance of changing the basis of their circulation, as a material part of 
 their preparations for cash payments. The calculation here made of the 
 quantity of notes occupied in the mere business of renewing a circulation 
 advanced to the merchants is underrated. A circulation issued on bills of 
 exchange, would, before a very late alteration in the business of the Bank, 
 have been renewed as often as every forty days, instead of every sixty 
 days : for the average of bills would not exceed that date. 
 
 * See Evidence of the Governor of the Bank, Lords' Report, page 11, 
 &c.
 
 57 
 
 considerable part of the circulation at all times lies in a stat« 
 more or less inactive, or dormant ; and an increase of one-fourth 
 or one-fifth to the whole amount, is therefore, a greater propor- 
 tionate increase, to that active portion of the circulation, by which 
 the value of the whole is determined. 
 
 But, the most important derangement to which our monied 
 system is subject, arises from the manner in which prices 
 are deranged by taxation. Let us suppose a country with 
 80 millions of money of every kind in circulation ; and that 
 wheat stands at 10s. a bushel, and malt at 12s. ; take 15 millions 
 away from the money, and what result would be seenP Wheat 
 fall to 5s. a bushel, and malt to 6s. ? There is a tax of 6s. on 
 the malt, and there must be a profit on the tax. If the reduc- 
 tion, therefore, of 15 millions be absolute, the wheat must fall to 
 2s. 6d.f whilst the malt falls to 10s. Our condition is not that to 
 which Mr. Locke referred, when he said " so much as the money 
 *' of a country is lessened, so much will all men find the prices 
 *' of their goods alike lessened." We are surprised when we 
 see that wheat has been reduced in money price one-half, whilst 
 Bank notes are lessened by no more than one-fourth, or one-fifth. 
 We see no correspondence between the cause and the effect. 
 But if 15 millions taken away from a circulation of 30 mil- 
 lions would lower wheat from 10s. to 2s, 6d., 7 millions taken away 
 may lower it to 5s. or 5s. 6d. with as much certainty. Our un- 
 exampled and excessive taxation, defeats all calculations drawn 
 from the experience of former times. It reaches to almost every 
 article of great and daily consumption, meat and bread excepted ;• 
 on some of these it falls in a double shape, as first upon malt, 
 and then upon beer ; and excessive as it is in its amount, and im- 
 posed as it has been, first strained as far as could be borne in a de- 
 preciated money ; and then doubled in its amount by a secret al- 
 teration of the standard ; it has placed the present age in a condition 
 of derangement and disorder without example, and gives new 
 combinations of circumstances to observe, and new rules to be 
 drawn from them. 
 
 But was the increase of money, from the middle of 1816 
 to 1817 and 1818, capable of causing a depreciation so rapid 
 as the advance of prices which then took place marked ? It 
 must be considered, that the minds of people were prepared 
 
 I
 
 58 
 
 to view the high prices of depreciation as natural and standard 
 prices : and the low prices of the metal money as unnatural, 
 and as having been produced by an adverse combination of things. 
 When men, therefore, had the means of purchase put into theii" 
 hands, they were eager to buy the respective commodities, or 
 property, to which their pursuits were directed, at any price 
 lower than the former price of the depreciated money. This 
 would increase the rapidity of the advance of price and deprecia- 
 tion of money. But, whoever considers the nature and the office 
 of money, will be at no loss to perceive how it must, of necessity, 
 depreciate with great rapidity whenever its quantity is greatly 
 increased. Of that amount, of about 10 or 12 millions of notes, 
 which the Bank advanced to government, in 1816 and 1817, 
 about one-half were returned to the Bank, nearly as soon as 
 issued, in discharge of advances previously made by the Bank to 
 the mercantile body. But these advances discharged, an amount, 
 of, perhaps, 6 millions of these notes remained in circulation, in 
 addition to the former circulation of 23 or 24 millions, and of 
 these notes, not one could return to the issuers, for the Bank 
 paid nothing in cash ; and if those who possessed Bank- 
 notes in excess, had carried them to the Bank, they could only 
 have obtained from the Bank one note in exchange for another. 
 But this additional 6 millions of notes would none of it remain 
 unemployed. There was not one of all those, into whose hands 
 any part of these notes fell, who was willing to retain a guinea, 
 longer than until he could find an opportunity of parting 
 with it. That is a consequence of the essential character of money, 
 every man feels that he sustains damage of some kind, whilst any 
 extraordinary portion of money remains unemployed and unpro- 
 ductive in his hand. No substance is to be found more active, 
 restless and powerful, than an excess of money in a commercial 
 society, where it can neither be melted, nor exported, nor carried 
 back to those that issued it. It moves perpetually from the hand 
 of one man to that of another, but can make this movement in 
 no instance, without creating or discharging a debt, or purchasing 
 property or commodities of some kind. Those by whom it is re- 
 ceived, hasten to dispose of it again, and in this manner an 
 increased quantity of money, enters at once into the markets of all 
 property and commodities, creating endless purchasers, and never
 
 ceasing this accelerated action, until all prices have risen, and 
 the whole quantity of money in circulation, is no more than 
 equal to sustain those advanced prices. These operations of the 
 year 1818, must be considered as adequate to the effect produced. 
 That was the period of a second Restriction act ; of a temporary 
 suspension of the old standard ; of a temporary re-establishment 
 of the paper standard. With this paper measure of value, the 
 paper prices of the war were re-established in a period of peace. 
 And incomplete as our information is ; it is still more perfect 
 in this particular period, than at any period of the war; 
 and is sufficient on the whole, to establish that the high prices 
 of 1818, and the low prices which have succeeded, arose both of 
 them out of the measures and operations now described. It can- 
 not with reason be denied, that if the measures of 1818 were re- 
 peated, they would lead again to the same consequences ; they 
 would lead of absolute necessity to the prices of 1818 and the 
 prices of the war ; and would, if persevered in, establish perma- 
 nently those prices.
 
 60 
 
 It will have appeared, that the system which has been ad- 
 vanced by Mr. Tooke, must be considered as altogether destitute 
 of foundation. It is false in assuming the rate of depreciation, 
 from the price of bullion ; erroneous with respect to those causes 
 to which he attributes a further advance and fall of prices ; and 
 mistaken with respect to the actual operations of our paper money. 
 Mr, Blake has proposed a system of prices altogether different. 
 In part it is correct. It is correct in rejecting bullion as a mea- 
 sure of depreciation. But in its further extent, this system is 
 mainly a revival of those errors so repeatedly exploded in 1810 
 and 1811, the holders of which denied the existence of any de- 
 gree of depreciation, and maintained that paper was of an equal 
 value with gold, and that it had not fallen in value, with refer- 
 ence to commodities. Before examining the grounds on which 
 these opinions are again offered, it will be desirable to take a 
 short review of what that state of prices was, and how long it 
 continued, which it is proposed to account for, without admitting 
 any degree of depreciation of money. 
 
 Price of Wheat taken from the Corn Report of 1813, 
 
 Average price in 
 the old Standard, 
 44*. 7d. 
 
 
 
 
 s. 
 
 d. 
 
 Average of 5 years ending 
 
 1769 .. 
 
 ,. 43 
 
 2 
 
 — 5 — 
 
 
 1774 .. 
 
 ,. 47 
 
 9h 
 
 — 5 
 
 
 1779 .. 
 
 ,. 40 
 
 9 
 
 — 5 — 
 
 
 1784 .. 
 
 ,. 45 
 
 9-k 
 
 — 5 — 
 
 
 1789 .. 
 
 .. 43 
 
 3 
 
 - , — 5 — 
 
 
 1794 .. 
 
 .. 47 
 
 
 
 )
 
 61 
 
 Add- 
 
 - 
 
 
 
 
 
 veragc 
 
 of 5 )• 
 
 cars ending 
 
 1799 . 
 
 .. 64 
 
 2 ^ Prices oi; the 
 
 — 
 
 5 
 
 — . 
 
 1804 . 
 
 .. 83 
 
 — 
 
 5 
 
 — 
 
 1809 . 
 
 .. 82 
 
 11 1 ytriction. 
 9 J 
 
 — 
 
 5 
 
 — . 
 
 1814 . 
 
 .. 101 
 
 — . 
 
 5 
 
 — 
 
 1819 . 
 
 .. 78 
 
 4 
 
 — 
 
 1 
 
 . — . 
 
 1820 . 
 
 .. 65 
 
 7 
 
 — 
 
 1 
 
 — 
 
 1821 . 
 
 .. 54 
 
 5 
 
 — 
 
 1 
 
 ■_ 
 
 1822 . 
 
 .. 43 
 
 3 I Price of the 
 y standard. 
 
 — 
 
 1 
 
 — 
 
 1823 . 
 
 .. 40 
 
 Re- 
 
 old 
 
 The question, then, to be explained is, whence it arose that, 
 in the pure paper money of the restriction, a greater nominal 
 amount of money (a double amount in point of fact) was given 
 for a quarter of wheat ; and for wages also, for it is admitted, that 
 wages advanced as much as wheat, than under any combination 
 of circumstances was ever given in money of the precious metals ; 
 or than, as will be admitted, ever will be given under any 
 circumstances, unless new mines be discovered. 
 
 " If every increase of prices," says Mr. Blake, " is to be 
 *' designated as a depreciation of money, let us revise our lan- 
 *' guage, and when a bad season or difficulty of production, or 
 " taxation, has raised the price of corn, of cloth, of leather, and 
 *' of any other article that we consume, let us say that corn, 
 " cloth, and leather, have not risen, but that money has fjillen 
 " in value from depreciation. If the object be to confound all 
 " our conceptions, and all our reasonings on this subject, there 
 *' cannot be any more certain mode of effectuating the pui*pose 
 " than by adopting this equivocating language." But this 
 method of argumentation is not applicable to this question. If 
 this gentleman had meant to maintain, that those high prices 
 of wheat which are given in this table, arose in reality from bad 
 seasons ; or from taxation which still exists, or from diffi- 
 culty of production which is not lessened, he would, perhaps, 
 have been entitled, if he pleased, to express himself in this 
 manner. But if he do not mean to maintain that, which he 
 does not, for he abandons those absurd dogmas ; then a 
 grosser instance of equivocation in argument, than that which 
 this passage itself exhibits, it would be difficvdt to produce ; 
 " Was there ever an instance," he observes, '* of a perma- 
 *' ncntly low price, that is a price which would not vcmu- 
 *' ncratc the producer, except from the supply continuing too
 
 62 
 
 " great for the demand.'^ There was never any such instance, 
 from that or any other cause, nor ever can be. But permanently 
 low monied prices there have been, and permanently high 
 monied prices. We have just seen what those prices have been, 
 the origin of which is the subject in dispute ; and another short 
 table will show us, what the alterations in the price of wheat 
 have been from the earliest times ; and will throw some light on 
 the causes of all great and lasting changes in monied price. 
 This table is taken from the second address to the Land-owners 
 of Mr. Western, who has himself taken it from Adam Smith, 
 divided into periods as it here stands. 
 
 Per Quarter. 
 
 A. D. 1202 to 1286... 19*. 8^ ... Every 20*. containing lib. of silver. 
 1287— 1338. ..12 lOi... — 20 — i _ 
 
 1339 — 1416.. .11 — — 20 — § of alb. 
 
 1423— 1457. ..10 7i... — 20 — - f — 
 
 1453 — 1497... 8 5|... — 20 — i — 
 
 1499—1560... 9 2 ... — 20 — ^ — 
 
 1561 — 1601. ..47 51... — 20 — ^ — 
 
 1595 — 1636.. .50 ... — 20 — 1 — 
 
 1637— 1700.. .51 Oi... — 20 — ^ — 
 
 1701 _ 1764. ..40 6^... — 20 — 1 — 
 
 Which table, joined to the few figures in the preceding page, 
 gives the monied price of wheat from the earliest period, to the 
 present. 
 
 Mr. Blake speaks of those who " wander so far from common 
 '^' sense " as to ascribe alterations in monied prices to alterations 
 in the value of money, but he will find throughout this whole 
 table, no material and lasting alteration in the monied price of 
 wheat, prior to that alteration which commenced with the five 
 years ending in 1799; which the common sense of mankind has 
 not concurred in ascribing to such an alteration, and in rejecting 
 all systems and theories which have proposed otherwise to explain 
 it. The reduction in the monied price of wheat, which appears 
 in the former part of this table, Adam Smith, as is well known, 
 ascribed to an increased value of money, arising from an increas- 
 ing demand for, and an inadequate supply of, the precious 
 metals. That second fall in wheat, though inconsiderable, 
 which took place in the former part of the last century, he 
 ascribed to a similar cause. This tabic exhibits throughout its
 
 G3 
 
 whole course, from its commencement to the present time, twd 
 instances, and two only, of a considerable advance in the monied 
 price of wheat. One followed the discovery of America ; the 
 other is coincident with the paper money of the Restriction act. 
 The first of these has been by all writers, ascribed to a cheap- 
 ness of money arising from the quantity which flowed here from 
 the American mines ; althoufrh no writer has been able to show 
 how the cause and effect corresponded in this instance. The 
 second can be shown to have arisen from no other cause, than 
 the increased abundance and cheapness, with which the money 
 of the Restriction act was thrown into circulation. And the 
 proof here is, in one respect^ more complete than in the former 
 instance; because the termination of the Restriction act has 
 reduced wheat and raised money, until both have assumed again 
 their former relative value. 
 
 When this writer, therefore, charges with extravagance those 
 who see in a great and lasting advance of wheat, accompanied 
 with an equal advance in wages and in all the productions of 
 labour, an altered and depreciated money, he mistakes altoge- 
 ther the character of this question. He proposes to explain 
 the nature and process of certain operations, by which, according 
 to his view, monied prices were caused to advance during this 
 period ; to the extent it must be observed, which has been just 
 shown, without money having become depreciated. His state- 
 ments ought to be attended to, because of the ability with which 
 they are made ; and his system is entitled to receive a candid 
 consideration ; but all experience, and all opinions previously 
 expressed and entertained on questions of this nature, by men 
 most conversant in them, are against such a system; and it 
 behoves him to support it by a reference to admitted facts, and 
 by consistent and demonstrative arguments. Price is composed 
 of two elements, commodities on one hand, and money on the 
 other. It is the result struck out from the relative proportions 
 of the two. No material or lasting alteration can take place In 
 prices, without either money or commodities having been lessened 
 in quantity or increased. To an increase or diminution either 
 of the quantity of money or of commodities must, after all, and 
 however effected, be referred, the alterations in prices of the last 
 thirty years.
 
 6i 
 
 But, before examining the particular system, by which it is 
 proposed to explain the causes of these alterations in prices, it is 
 better to explain more correctly the character of some 
 facts and material contradictions, by which this system is sup- 
 ported. " Let us at least endeavour to understand each other," 
 its author proposes, and there can be no better rule, either 
 with respect to the facts we refer to, or the meaning of the terms 
 which we employ. The maxims quoted from Mr. Locke are 
 perfectly just, and such as are fit to be taken for our guidance. 
 " Words being intended for signs of ideas to make them known 
 " to others, not by any natural signification, but by a voluntary 
 " imposition, it is plain cheat and abuse when I make them 
 " stand sometimes for one thing and sometimes for another, the 
 " wilful doing whereof can be imputed to nothing but great 
 " folly, or great dishonesty," against which rule Mr. Blake 
 has countenanced, in the course of his work, very great offences, 
 though most undoubtedly not wilfully ; for it would be preposterous 
 to assume it. But he states, first, that he admits, " that such a 
 state of " things" (that is of prices during the Restriction act) 
 " could not have existed if the Bank had been paying in specie. 
 *^ Of that," he says, *' I admit there can scarcely be a 
 " dovibt." And then, that a similar state of prices has been 
 experienced almost universally, and in countries where no change 
 in their currency has taken place. So that this state of things 
 might have taken place without a Restriction act in this country ; 
 if it has been experienced without any accompanying alteration 
 in their currencies in other countries. The universality of dis- 
 tress now represented to exist, and " simultaneous fall in almost 
 " every commodity, and in almost all countries, is ascribed in 
 " part to the cessation of demand which the war expenditure of 
 " their governments had created," But we have it on the au- 
 thority of Mr. Say, a continental writer of great ability, and 
 than whose authority there can be none more satisfactory, 
 that " the fall of prices ih England has not its analogy on the 
 *' continent." Mr. Say states, that he does not believe that 
 there is any ground for that assertion.* With respect to France, 
 
 * See letter of J. B. Say to Mr. II. James, in Mr. Western's second 
 address to the Land-owners.
 
 65 
 
 he has given the price of wheat taken from *' the important 
 " market of Roye in Picardy, for 14 years, ending with 1816;" 
 the average price for those 14 years, which go through the main 
 period of high prices in this country, being about 41*. 2rf. the 
 Winchester quarter. But Mr. Say observes, that this average 
 is evidently too high : as these "14 years contain two years of 
 " famine, and three epochs of supplies for Buonaparte, for the 
 *' important campaigns of Moscow and Leipzick, and of the 
 '* hundred days.""* War expenditure, therefore, and the cessa- 
 tion of that expenditure, are little capable of affecting monied 
 prices. " It appears to me," says Mr. Blake, " that the great 
 " and mighty source of the distresses felt by all classes of pro- 
 *' ducers, has been the transition that took place at the termina- 
 " tion of the war." We are now in the eighth year, which has 
 passed, since the date of that fatal transition. But the whole 
 of this period has not been equally calamitous. The middle 
 part of it was one of universal prosperity. That curse of 
 mankind, therefore, which is called peace, under whose malig- 
 nant influence this gentleman appears to believe that the whole 
 world is now suffering, and has been suffering for eight years, 
 has discovered a peculiar inveteracy of character in this country ; 
 for it broke out afresh like an old disorder, and commenced a 
 second career of destruction more extensive than the first, be- 
 ginning four years after its first establishment, and when the 
 nation had recovered firom its first influence. The peace which 
 succeeded to the American war, continued for 10 years, a period 
 but little longer than that, during which we have now reposed 
 fi-om war. Those 10 years were years of great and unbounded 
 prosperity ; during which all classes of society flourished, and 
 
 * There is a great tendency in agricultural produce to equalize the higli 
 prices of years of scarcity, by thfe low prices of the next or succeeding 
 years. It is to be concluded, that this high average in France of 41*. 2d. 
 during the late war, arose from another cause than that to which Mr. Say 
 imputes it. The average price of wheat in France, before the late war, 
 appears to have been about 35s. or 36s. a quarter, at which rate it had 
 continued for a long period, and to which it now appears again settling. 
 The advance, therefore, perceptible during the war, is to be imputed to a 
 lower value of the precious metals arising from the quantity thrown out by 
 the circulation of this country. 
 
 K
 
 66 
 
 the nation made rapid advances in wealth of every kind ; in the 
 improved cultivation of its soil, and the increase of its manufac- 
 tures and commerce. Whence, then, this extraordinary change, 
 and state of things, out of which have sprung systems built on 
 the assumption that war and taxes, and the wasteful and de- 
 structive expenditure of governments, are friendly to the growth 
 of industry, and the prosperity of the productive classes ; and 
 that peace is the fertile source of ruin to " all classes of pro- 
 ducers ?" The peace which followed the American war did not 
 sacrifice the producers to the non-producers ; it did not double 
 their burthens, nor their debts and contracts, by means of a 
 fictitious currency. It was accompanied with no change in the 
 character and value of money. It is not the transition from war 
 to peace which destroys the producers. It is the double tribute 
 which, since the peace, is drawn from them by all classes of non- 
 producers. The nation has had sufficient time to adapt its indus- 
 try to the altered expenditure of government. But neither is it 
 true that the actual expenditure and consumption of government 
 have been lessened since the transition from war to peace : the fall 
 of prices has enlarged the means of consumption of the govern- 
 ment and of all its dependants ; and this consumption is aided 
 by the enlarged expenditure of all the unproductive classes. 
 That kindly operation, as Mr. Blake considers it, and to which 
 he ascribes, as we shall presently see, so much of the prosperity 
 of the war, the conversion of capital into revenue : is proceeding 
 in this country at this time as rapidly as at any period of the 
 war, or as it has ever done in any age or country. Our agri- 
 cultural capital generally is assuming this shape. " Great 
 " markets of consumption" are thus opened to the producers, 
 but the productive classes find something still wanting, and that 
 is price. " There still remains," says Mr. Blake, " the capital 
 " and the labourers and the commodities, but no longer the 
 '' same market for consumption," meaning by consumption, the 
 unproductive consumption occasioned by the expenditure of 
 government in the war. The facts are mistaken. The market 
 arising from unproductive consumption is more extensive than 
 ever. The market remains, and the labourers and the commo- 
 dities ; it is the character of money which has been changed, 
 and there is no longer the same monied price.
 
 67 
 
 A reference to the first American war affords, as did the peace 
 which followed it, an explanation of our present condition. In that 
 war, America adopted an inconvertible paper money. England; 
 preserved its metal money. The prices of land and its productions 
 advanced in America to an extraordinary extent: to such an extent 
 that laws were made there, with a greater regard to the claims of 
 justice than our own conduct has been distinguished by, to 
 obviate some of the evils, which the advance of prices would 
 otherwise have occasioned in monied contracts. In England no 
 derangement of prices took place. In the late war, England 
 adopted an inconvertible paper money ; her opponent power, 
 France, maintained its metal money. Land and its productions 
 advanced in England : all its prices were deranged. They main- 
 tained an equal level in France. War, taxes, loans, expendi- 
 ture of whatever kind, none of these advanced prices in England 
 in the American war ; nor in France in the last war ; nor ever 
 can do in any country ; for they have no power to alter in that 
 direction the proportion between money and commodities. 
 
 The case, then, standing thus, with respect to Mr. Blake's view 
 of some important facts connected with this question, it is desirable 
 to see what meaning he affixes to the term depreciation; his equivo- 
 cal use of which term, is the more to be censured,' because he has 
 himself condemned, with considerable severity, the indefinite and 
 dubious sense, in which it has been used by others. ' It does not 
 properly import, as he well explains, a difference between paper 
 and bullion ; bullion might advance or fall in price, whilst paper 
 continued of an invariable value, as compared with commodities. 
 If the term depreciation be confined to an expression of the mere 
 difference between paper and bullion ; Mr. Blake observes, that 
 so far it might be admitted. " But this,'"* he continues, " is 
 " not the sense in which the term depreciation is understood 
 " by the public : it is meant to convey and does convey, the 
 *•' idea of money falling below the former level — a change in its 
 *' value as compared with all other commodities. It is extraor- 
 " dinary that Mr. Baring, Mr. Tooke, Mr. Kicardo, and Mr. 
 " Haldimand, should all agree in stating that they know of no 
 " other criterion of depreciation than the value of the note as 
 *' compared with that of gold. They must know that cloth 
 " corn, manufactures of all descriptions, are criteria by which 
 ** the altered value of currency maybe determiHed. If no change
 
 6^ 
 
 " takes place in the price of these commodities, it is a tolerably 
 *' certain proof that the currency remains at its level."" And 
 again, " is it not an inquiry of vast importance, to ascertain 
 " whether the paper has been steady in value, and the gold risen 
 *' above the paper ; or whether the gold has been steady, and the 
 *' T^a-pex fallen below the gold?" An increased price of bullion 
 might take place to any extent, it is said, page 15, when the 
 currency was inconvertible, " and yet without deranging the 
 '* just and natural proportion, between the currency and the 
 " usual commodities that are to be circulated by it, the price of 
 " corn, of cloth, of every other commodity might remain pre- 
 " cisely the same, and nothing alter but the price of gold." The 
 plain inference from all which is, that if the price of corn, of 
 cloth, and of all other commodities did not remain the same : 
 if all commodities advanced as well as bullion, that then the 
 xnoney was depreciated, not in any confined sense alone, but in 
 the proper and general sense of that term. That the paper money 
 spoken of was depreciated, if it did not preserve the same power 
 of purchase with respect to commodities which the metal money 
 had maintained ; if all commodities advanced in paper money, 
 and if it assumed a level, with respect to commodities, lower 
 than the level of the metal money. But we find this 
 writer admitting, that the prices of all commodities advanced : 
 admitting that money did not preserve so high a level with 
 regard to commodities as before, any more than with regard to 
 bullion, and yet denying that it was depreciated. Denying, 
 first, that the high price of bullion was to be admitted as a proof 
 of a depreciation in money ; because money might still have 
 remained on the same level as before with regard to commodities; 
 and then, admitting that it did not remain on the same level 
 with regard to commodities, but assumed a lower level, and still 
 denying that this money was depreciated ; it behoved him to 
 have stated very distinctly, what he did in reality mean by the 
 term depreciation. If a higher price of bullion do not prove that 
 paper is depreciated, nor a higher price of all commodities, ac- 
 companied with an increase to the quantity of money in a ratio 
 proportionate to the advance of prices, for this also is admitted, 
 do not prove that such paper money is depreciated ; this gentles- 
 man should have undertaken to show distinctly in what deprecia- 
 tion of paper money does in reality consist, and what other proof
 
 can ever be given of such depreciation than these afford, I know 
 of none ; but am on the contrary convinced, that no proof ever 
 can be given other than such as these afford, of the existence or 
 extent of depreciation in an inconvertible paper. If whenever 
 any country adopts an inconvertible paper money, the prices of 
 all commodities and of bullion are seen to advance greatly and 
 decidedly, and in an unprecedented degree ; if, upon a return to 
 a metal money again, prices fall to the old level; if, in the 
 countries around, the rate of prices undergoes no corresponding 
 alterations; bu^*the precious metals and commodities preserve 
 their former relative value ; if that paper money, under such 
 circumstances, be not to be taken as depreciated, no inconverti- 
 ble paper ever can become depreciated, nor can any proof of a 
 depreciation from excess, ever be given with regard to such 
 money. There is great reason to say, therefore, that a right 
 understanding of words and terms is necessary ; such an under- 
 standing will be found to decide a very essential part of the 
 argument thus advanced. 
 
 Mr. Blake does, indeed, appear to have entertained some ex- 
 traordinary notions with respect to some existing difference be- 
 tween an altered rate of monied prices, and an altered value of 
 money ; between an altered power of commodities over money, 
 and an altered power of money over commodities. He appears 
 to have believed, that monied prices might advance first, and the 
 value of money fall afterwards ; and that such an operation 
 could not be held as a depreciation of money. " Let us not 
 *' wander so far from common sense as to affirm, that the altered 
 " value of money is the cause of the high prices and not the 
 *' effect." But an altered value of money, is neither the cause 
 nor the effect of an alteration in monied prices. It is one and 
 the same thing.* It can never be established but from an altered 
 proportion between money and comm.odities. It may have its 
 origin in an alteration in the quantity of money, or in an altera- 
 tion in the quantity of commodities ; but the alteration in the 
 value of money and in prices is the same, and takes place at one 
 and the same time. If A take his 100/. to the corn market to- 
 morrow, and find it will only purchase one-half as much corn as 
 it would last year have purchased, that is no proof of an altered 
 
 * " Docs not a rise in the v;ilue of any species of moDcy or currency, 
 ** mean a fall in the prices of commodities." Speech of Horner, May 6, 1811.
 
 70 
 
 'Value of money ; it may have arisen from a lessened supply of 
 that particular commodity. But if he return from the corn 
 market, and find prices advanced alike in all other markets, and 
 that his 100/. will produce a lesser quantity of commodities of 
 all kinds than before ; then his 100/. is altered in value : it will 
 procure for its possessor only a smaller quantity of those goods 
 and necessaries, which it is the object of money to purchase, 
 against which it exchanges, and of which it is the measure.. 
 His money has become " feeble," to use the expression of the 
 French historian, as applied to a coin which hdd become of less 
 value through debasement ; pejorated, as the Americans called 
 their cheap paper money; depreciated, lowered in price and 
 value, according to our own term as always used. It has not 
 the same power of purchase over property and commodities, it is 
 enfeebled, pejorated, depreciated, at precisely the same moment,: 
 and by the same operation, as that by which prices advance ; and 
 by which commodities become more powerful in their command 
 over money. When Mr. Blake asks, if, when a bad harvest has 
 advanced the price of corn, you would call that a depreciation of 
 money ; he cannot but know that no one did ever infer a depre- 
 ciation of money from that, or from any like cause. He him- 
 self admits, that the advance of prices was universal and lasting. 
 Those who take the price of corn as a measure of the value of 
 money now, and those who did so on former occasions, have 
 done it on this ground, that they consider an alteration in the 
 average price of corn, to be necessarily accompanied with a like 
 alteration in prices generally ; that when a lasting advance of 
 corn takes place, an advance of wages must necessarily accom- 
 pany it, and of all the productions of labour ; and that conse- 
 quently it can be never established, except as accompanied with 
 a lowered value of money ; and of the rate of that advance of 
 prices and depreciation of money, it is taken as an index. The 
 objection to use the term depreciation, does not seem to have 
 been peculiar to ourselves. It appears to have been felt in com- 
 mon by all nations when they debased their money, but desired 
 to avoid redressing the injustice of that measure. The Ameri- 
 cans seem to have used the term pej oration as long as they were 
 consistent in their declarations that the honour and good faith of 
 America required their paper money to be paid at its full 
 nominal amount. But they published at length " a table of de-
 
 71 
 
 preciation," according to which a variable value was fixed for tlic 
 discharge of this money according to the years in which it was 
 dated.* 
 
 " There is some ratio which ought to subsist between the total 
 •" amount of the currency, and the total value of the commodities 
 " to be circulated by it. If that ratio be constant, the value of 
 " the currency will remain unaltered.*" Thus, then, if the total 
 amount of the currency, increase, in no higher ratio than the 
 value of commodities increases, or in other words, in no higher 
 ratio than to correspond with any given advance of monied prices, 
 the value of that currency is not altered. But it never can in- 
 crease in any higher ratio than this : for the prices of commodi- 
 ties must correspond with the alteration in the quantity of 
 money. According to this reasoning, if wheat had risen in 
 monied value to 10/. a quarter, during the Restriction act, and all 
 other prices in a like degree ; and if money had increased in quan- 
 tity no more than to correspond with this advance ; if the existing 
 quantity of money had been no more than again doubled with this 
 advance, its value could not be said to have altered. Air we 
 should have to do, would be to call 10/. the natural price for that 
 period, of a quarter of wheat, and then say that money had in- 
 creased in no greater ratio than to support that price, and therefore 
 it was not depreciated ; its value remained unaltered This reason- 
 ing would avail equally to prove that there existed no depreciation 
 in the assignats which France at one time circulated. Gold rose, 
 but that was occasioned, we might say, by a great demand for bul- 
 lion to export, in order to remit abroad the properties of that vast 
 body who then left France. Corn and goods advanced, but that 
 was in consequence of the demands of war. The amount of as- 
 signats did no more than increase in a ratio exactly corresponding 
 with this increased value of commodities. The ratio was perfectly 
 constant, and therefore the value of the assignats remained unal- 
 tered. But this method of reasoning is too preposterous to be ad- 
 mitted of. Whenever the quantity of money increases, without a 
 proportionate increase to the quantity of commodities ; then the 
 price of commodities rises, and the value of money falls ; and if 
 
 * " If any term," says Mr. Blake, " had been invented or adopted, that 
 ** should have expressed the rise in the value of gold, we should never 
 ." have heard such extravagant opinions respecting depreciation." lie ap- 
 pears here to feel a necessity which others have felt before him. It may 
 be supplied in the same manner.
 
 72 
 
 this take place in an inconvertible paper, and if the advance of 
 prices be to an extent, to which prices could not have advanced 
 in a metal money ; that advance of prices is the proof and the 
 measure of the depreciation of the paper. 
 
 The question, therefore, is thus much simplified. If the paper 
 standard of the restriction, assumed a value with respect to com- 
 modities, lower than that of the gold standard which it sup- 
 planted ; lower than that which the gold standard would have 
 maintained ; then it became depreciated. If this be not the 
 meaning of the term depreciation as applied to the money of the 
 Restriction act, and that as applicable to the essential character 
 of this question, and if the extent of that depreciation be not to 
 be thus taken from the prices of commodities, property, and 
 labour, no language but that of equivocation and confusion can 
 be used on this subject. 
 
 The question comes then to be, whence did this depreciated 
 value of money, at this time have its origin ? Mr. Blake admits 
 that it could not have existed without the Restriction act, and 
 that increased amount of money, which could alone by the Re- 
 striction act have been maintained in circulation. But he does 
 not consider, that it flowed directly from that act : but rather 
 that it was the immediate consequence of certain operations of the 
 government, which, acting upon the inconvertible money of the 
 Restriction act, depreciated its value : or, as he would express it 
 raised prices. These operations after a certain time, the govern- 
 ment discontinued. Prices which these operations had raised, 
 then consequently fell, and money advanced in value ; and then 
 the Restriction act, the government having no further occasion 
 for its use, was abandoned also, and the old metal standard re- 
 established by law, without any regard had to the derangement 
 thus occasioned. There will be presently occasion to show, that 
 Mr. Blake is altogether wrong,as to the effect which he ascribes to 
 those particular operations of the government, which he considers 
 as having been the immediate cause of the depreciation of money. 
 He has mistaken both the character and the extent of these opera- 
 tions. But at presoit let us consider this question on the footing 
 on which this argument places it. These measures, of the Re- 
 striction act, and of the loans founded on it, to which so much is 
 ascribed, considered as political operations might have had their 
 use, and doubtless had. The government was actively employed
 
 73 
 
 in annoying the foreign enemy, and these measures assisted 
 them in their object. They thouglu of nothing further. But 
 measures v.hich depreciate money, and then advance its 
 value, produce no trifling effect on society at large. It is 
 not enough to consider such measures, with exclusive refer- 
 ence to foreign politics : Their more important character is in 
 their eifect on our own internal situation and relations. The 
 alteration in prices now spoken of, was not a trifling advance, 
 maintained for one or two years, and then ending. We speak of 
 an alteration in prices enduring for twenty years, changing during 
 that time the character of money, and reaching to such an extent 
 as to alter money in value one-half. Whilst the government 
 saw nothing in a depreciated money, but a greater facility to raise 
 supplies for the war, the people were making their contracts in 
 that depreciated money ; and were committing their property 
 upon it. The government itself, imposed heavy taxes in this 
 money, contracted enormous debts, and advanced the pay and 
 pensions of all those to whom the public resources through the 
 channels of government are given, in order to make them corres- 
 pond with the advance of prices, and lowered value of money. 
 W^hen money of a different value therefore, was, from whatever 
 cause, introduced and established permanently by law, ought not 
 regard to have been had to those contracts ? Could a metal 
 standard be with justice re-established, without regard to the 
 value of the money wltich it supplanted ; and with regard to 
 nothing but the ancient value which that standard had borne, 
 a fourth part of a century before ? If it were necessary to re- 
 establish money of an old value, then ought all contracts to have 
 been converted from one sum to another, according to the different 
 value of the money in which they were made, and that in which 
 they were required to be discharged. It would signify but little, to 
 the essential character of this question, in what manner the depreci- 
 ation of money was effected, how restored, or by what name called. 
 Call it a higher value of commodities, and not a lower value of 
 money ; a higher monicd price of commodities, and not a lower price of 
 money ; not a depreciation of money : if wc can listen to these 
 absurd distinctions; still these were the operations of the govern- 
 ment ; their effects were, first by advancing prices, and then by 
 reducing them, to make the monied standard an instrument of 
 
 L
 
 fraud ; to transfer by that means men's property, from one man tcr 
 another, throughout society, unjustly, unintentionally, and in » 
 manner against which no individual prudence could guard ; and 
 to such an extent as to occasion that whole mass of national cala- 
 mity now witnessed. It was the duty of government to provide 
 against this mass of ruin and fraud ; to protect the rights 
 of property amidst these changes, and to indemnify those who 
 have thus sujBPered wrongfully from them ; and above all, to make 
 their own taxes and payments conform to the alterations which 
 they have made in their real value. It is not the attempting to 
 draw unfounded distinctions, that is to stand in the place of sub- 
 stantial justice; and to afford a cover, under which one half of 
 society is to be plundered for the benefit of the other. 
 
 It is thus that the case stands, even according to the argument of 
 Mr. Blake, for this is taking his own statement ; except in calling 
 that, depreciation of money, which he calls, an advance of prices. 
 By an act of the government, the monied standard of the country 
 was changed. The old standard, by its character not subject to 
 fall greatly in value ; 'which had continued of nearly an equal 
 value, for a century and a half, and on which men could there- 
 fore rely with safety in their contracts, was withdrawn, and an- 
 other substituted, capable of debasement, privately or accidentally, 
 and possessing no means or principle of regulating or adjusting, 
 its own value. The old standard was withdrawn. It was kept 
 for two and twenty years from the use of the people. They could 
 have no recourse to it. The substituted measure became de- 
 based, if that term be preferred to the word depreciated ; and that 
 by measures of the government, which had established it : and 
 which possessed no means or power, to lower permanently, the 
 value of the standard which they removed. It passed still under 
 the same name, as the old standard. The money possessed the 
 same denomination ; but it possessed a different value, and gave 
 a different measure. "No other standard than this existing for 
 two and twenty years ; its altered value being as far as was pos- 
 sible concealed ; all the contracts of that long time were made in 
 it. All land was leased out in that money, to the unsuspecting 
 farmer. At the end of twenty-two years, the government discon- 
 tinues its career of depreci3,tion, takes up the old standard again, 
 imposes it by law upon the country ; and Under the same name as
 
 15 
 
 tTiat of the debased measure, requires that all contracts made in 
 the one description of money shall be discharged in the other. 
 But is not this, then, plain and direct cheat, and fraud, and 
 abuse, when men's property is confiscated through such means as 
 these? If it be not, those terms can never be justly applied. 
 Is it not that kind of action, " the wilful doing whereof,'" as Mr. 
 Locke observes, " can be imputed to nothing but great folly, or 
 *' great dishonesty ?"" It is not perhaps matei'ial, to determine 
 which. The magnitude of the evil renders that but a worthless 
 inquiry. But this remains certain, that no man can honestly 
 avail himself of the power which the government has thus put 
 into his hands, by *' making the same words stand sometimes for 
 " one thing, and sometimes for anothei'," of seizing his tenants 
 or his neighbour's property ; of taking two bushels, or two 
 pounds, when his contract was but "for one ; and of doing this on 
 no better ground, than because the government, by an act without 
 a parallel, and which in addition to the ruin which it has spread 
 throughout society, has affixed a disgrace on the national cha- 
 racter, such as it has never been before stained with, has altered 
 the meaning of the terms in which his contract was formed. 
 
 Those who have established by law, under such circumstances 
 as these, the metal standard of the ancient value, and those who 
 support that measure, have professed to regulate their proceedings 
 by a regard to faith and justice ; and have not scrupled to contrast 
 those proceedings, with what they consider the disgraceful mea- 
 sures which have been adopted in former times with regard to 
 the coin. But they have mistaken the nature of those former 
 measures. The character of this country is not to be charged 
 with any unjust, or fraudulent alteration in its monied standard, 
 from the earliest times to the present ; except during one short 
 and disgraceful period, which began with Henry the Sth, and 
 ended with his immediate successors ; and excepting again in our 
 own times, and in the instances now examined. Except in these 
 instances, no material alterations in our monied standard, have 
 been effected, unless in cases when the quantity of metal con- 
 tained in the coin was made to give way, not to purposes ol 
 fraud, but to the rights of property, and the interests of substan 
 tial justice. The short table at page (»2, exhibits the only 
 permanent alterations in the standard which we have ever made.
 
 •ye 
 
 They were confined, as will be seen, to about the space of two 
 centuries, beginning with Edward the 3rd, and ending with Eli- 
 zabeth ; ending in fact with that influx of the precious metals 
 from America, which took away the necessity of any further re- 
 duction of the standard. The old metal standard which, at the 
 commencement of this period, was a silver standard of Is. 8d. an 
 ounce; and in which 1/6. Troy of silver was coined into twenty 
 shillings, was gradually reduced in those two centuries to 5s. an 
 ounce, and to lib. Troy being coined into 60s. The shilling of 
 Elizabeth contained therefore no more than one-third of the 
 quantity of silver, which had been contained in the shilling of 
 Edward the 3rd. But if we refer to the price of wheat, during these 
 reductions, we shall see at once, the grounds of that necessity, and 
 policy as well as justice, by which these reductions were dictated. 
 The price of wheat was 10s. »r 12s. a quarter, at the commence- 
 ment of these reductions ; and continued to be no higher than 
 10s. at their close. But if the shilling of Elizabeth had been 
 coined after the rate of Is. 8d. an ounce ; if the shilling of that 
 time had been of the old magnitude, and had contained three 
 times its actual arnount of silver ; then no more than one-third 
 of the number of shillings which were actually given, would 
 have paid for wheat. Wheat would have been in fact, 3s. 4rf, 
 a quarter instead of 10?. There would have been seen a 
 regular, gradual, progressive fall in prices, and a similar 
 advance in the value of money during two centuries, in which 
 wheat must have fallen from 10s. to 3s. 4;d. a quarter. The re- 
 ductions of the standard, prevented this fall of prices, and did 
 no more than prevent it. The standard was not reduced there- 
 fore, for unjust purposes, but to prevent injustice ; not to render 
 the value of money variable, but to prevent its variations. The 
 value of the materials of which the standard was composed, be- 
 came greater in consequence of their scarcity ; and as the material 
 became of greater value, a lesser quantity was used, in order to 
 preserve the money itself of an equal value. The value of the 
 precious metals increased during this whole period, in this coun- 
 try and in all Europe, in consequence of an inadequate supply ; 
 and of a perpetually increasing demand ; and the alterations in 
 the coin were alterations which adjusted the value of the standard 
 to the altered value of the materials of which it was composed..
 
 77 
 
 If these reductions had not been made ; if those who effected 
 them, had considered themselves as bound to sacrifice the rights 
 of individuals, and the interests of the country to a blind adher- 
 ence to a particular standard ; what would have been the condi- 
 tion of the country during this period ? No debt could have been 
 safely contracted ; no lease entered into, no rent-charge of any 
 description granted, without injustice and ruin, to one of the 
 parties concerned. The rising industry, neither of this nor of 
 any country, could have sustained itself against such a state of 
 things. The reduction of the standard therefore, from 
 time to time, or rather its adjustment, was a necessary measure, 
 in order to prevent it from becoming an instrument of fraud and 
 wrong ; and to enable the people to commit with safety their in- 
 terests upon it. The character of this country is not subject to 
 the reproach of any unjust debasement, or alteration in its 
 standard, either from ignorance, or preconcerted injustice, 
 before the present day ; except indeed, in the short and dis- 
 graceful period when Henry the 8th, in the alterations which he 
 effected in his coin ; which he debased, both by reducing its 
 value, and advancing it, afforded the only example which our 
 history presents, of those double debasements of the standard, 
 which, in contempt of all principles of faith and justice^ and with 
 a total disregard of all the rights and value of property, have 
 been effected in our own times. 
 
 To return, then, to the question as resting on the statements of 
 Mr. Blake ; for it would be of secondary importance as far as 
 the rights of individuals are concerned, to say, that the govern- 
 ment did not itself degrade and debase the value of the new 
 money ; that the Hank did not degrade its value ; or that if it 
 were degraded by the government, it was done in a circuitous 
 manner. If we were to grant all this ; yet if the government 
 abstracted the old standard, if they left the people without any 
 means of adjusting the new standard which they gave them ; 
 then, though this new standard had become debased by the act 
 of the people themselves ; or through the country bankers, or by 
 whatever means; still being debased, being the only standard to 
 which the people could have recourse ; being that in which their 
 contracts were made ; it was that in which they could alone 
 be justly executed. It is this precise case which is stated by sir
 
 78 
 
 James Stuart, and which he exemplifies by a reference to a sup- 
 posed debasement of the weights and measures of the nation taking 
 place whilst the standard weights and measures were locked up in 
 the Exchequer. He does not assume a case where the government 
 had debased the standard weights and measures. He assumes that 
 these measures had been reduced by the people themselves ; in ab- 
 sence of a regulating standard : and then he asks, would it not 
 be horrid injustice, when you bring out the full-sized standard 
 again, not to rectify according to it, the contracts which landlords 
 and tenants had made in the debased measures .'' Observe what 
 this writer says, when he speaks of restoring a lessened value of 
 money, which money had become lowered in value, not by any 
 measure of government, but entirely by wearing and clipping of 
 the coin, " Injustice and in common sense, the raising of the 
 " standard of the coin, ought never to be allowed to benefit any 
 " person, but those who have been unjustly sufferers by the de- 
 *' basement of it ; nor ought it ever to be prejudicial to any per- 
 " son, but to such as by the debasement have been unjustly 
 " gainers. In every contract, where neither of the parties can 
 *^ produce any palpable loss sustained by the former debasement 
 " of the standard, the alteration ought to have no manner of 
 " effect. All debts of whatever kind ought to be liable to a fair 
 *' conversion, as much as those contracted in guilders, florins, 
 " livres, &c., when they come to be paid in pounds sterling. 
 *' The old and the new standards are not the same, because they 
 " carry the same denominations of value, any more than a 
 " piastre is a pound, because they both begin with the same 
 " letter." 
 
 But depreciation, it is contended, was never complete. In the 
 worst of times, and during the lowest value of money, there still 
 existed an act of parliament, by which men were given to under- 
 stand, that at some future and uncertain day, money would be 
 again enhanced : and that they would then be called on to dis- 
 charge in money of the old standard, whatever contracts they 
 should make in the money of the existing and debased standard. 
 They now therefore, experience, it is said, no more than justice, 
 when they find their property seized, in virtue of, and in con- 
 formity to, this act of parliament. This argument, without any 
 foundation in sense or justice, serves with many other such, to
 
 79 
 
 tover the commission of wrong which it is determined not to i'e-» 
 dress. No doubt a man is bound by a law, although he should 
 not know of its existence, or meaning. But then the law must 
 be one which is capable of being understood. It must be one 
 which the makers of it themselves understood. It is in that 
 sense in which a law is understood generally in the country, and 
 by those who made it, that any man is bound to understand it, 
 and to know of its existence, and it is in that sense only in which 
 he can justly be made to suffer by it. That act of parliament, 
 the weighty import of which was, that at the return of peace, all 
 the debts and taxes contracted and imposed during the wax*, should 
 be discharged in money of a double value, was not believed nor 
 intended by those who formed it, to possess any such meaning. 
 What they meant was, to secure the return to a standard of a 
 more steady character than that in use ; but not to one of a dif- 
 ferent value. It was denied that the standard which that act 
 provided for the abandonment of, at a distant date, was of a 
 lower value than that to which it proposed to return. The very 
 existence of an act of parliament to return to the gold standard 
 at a distant day, is a conclusive proof, that it could not have been 
 understood in that sense, in which it is now said that it was 
 justly binding. Could an act possibly have had existence, pro- 
 viding openly and in explicit terms, that at a distant and uncer- 
 tain day, all debts should be discharged in money of a higher 
 value than the one then in use .'' Laws are to be executed in the 
 construction they bear in the common sense and meaning of 
 mankind ; and contracts to be discharged according to the inten- 
 tion of those who made them. The meaning of the ruined farmer 
 when he signed his lease, was not, as is absurdly contended, to 
 pay for rent, so many ounces of gold, within six months after 
 the peace. His meaning was, to pay the value of a certain por- 
 tion of the produce of the estate ; and to reserve a certain other 
 portion for the labourer ; and another portion for himself His 
 agreement had this meaning ; and it was the duty of government, 
 if a government have any duty, and is competent to its discharge, 
 to guarantee in this sense, its execution. It was expressed in 
 money ; because he relied on the value of money continuing the 
 same; and that the same amount of money, would express in future 
 years, the same portion of farm produce, as at the date of his
 
 80 
 
 base. Is not this unhappy man then, plainly defrauded, when 
 this lease is construed, so as legally to require from him, the 
 value of nearly the whole produce of the land, and to leave no- 
 thing for the labourer or for himself: and is this to be justified 
 by telling him, of a certain number of pennyweights of gold which 
 a pound now represents ; but which it did not represent at the 
 date of his lease, and of an act of parliament, of the existence of 
 which he knew nothing, whether it was known or not to the 
 other contracting party ; and the meaning of which act was at 
 one time known to no man, although its meaning now turns out 
 to be, that it is just and legal to confiscate his property ; and 
 with his that of every man, who trusting to the equity of law, 
 and the faith of contracts, had embarked, in this mis-governed 
 country, his property in the cultivation of the earth ? 
 
 Mr. Blake's peculiar system is, that that advance of prices 
 which accompanied the Restriction act ; the lessened and depre- 
 ciated value of the restriction money ; the debasement in other 
 words of the paper standard ; had its origin in measures flowing 
 only indirectly from the Restriction act itself. It is not, how- 
 ever, to be forgotten, in discussing the justice of that opinion, 
 even if it were correct, which it is in no degree, that the govern- 
 ment when it changed the standard from metal to paper, became 
 responsible for the prevention of the debasement of the paper 
 money ; or for redressing the injustice worked by it. And 
 neglecting that duty, and suffering the new standard to become 
 debased ; it was still more the duty of government, not to have 
 substituted privately, a higher standard for the lower standard, 
 without corresponding measures for rectifying contracts. 
 
 Every man whose property has been invaded, who has been 
 ruined or defrauded by these proceedings ; is entitled to charge 
 that wrong on the government, and has a claim on that government 
 for the means of redress; if any claim for the redress of extensive, im- 
 politic, and ruinous injustice, between man and man, and between 
 the nation and its servants and dependents, can ever exist. The 
 government are as greatly responsible for the monstrous in- 
 justice, worked in a society like ours, by these alterations in the 
 monied standard by whatever process effected ; as though they 
 had in one instance secretly abstracted a portion of metal from 
 the coin ; and in the second instance, had secretly increased
 
 81 
 
 Its value for the purpose of fraudulently increasing the taxes, 
 ^Vid drawing from the people under the same name, an increased 
 tribute of their productions and commoclltles. 
 '■"iBut this is isupposing that view of the question to be correct, 
 ifrhich would aswibe the high prices of the Restriction, not to a 
 dlrculation of money, excessive and more than in proportion to lis 
 Exigencies, flowing directly from the Restriction act itself; but to 
 6er'tain incidental measured, which, operating on the peculiar cha- 
 racter of the restriction m6ney, caused those unexampled high 
 prices, which that money gave. It will be admitted imlversally, 
 that this state of prices arose from sbriie Cause which coincided 
 with it in point of time ; and which is not now in action. This 
 dsiuse, according to Mr. Blake, is to be found in the expenditure 
 6f the government during the war. By this expenditure were 
 all prices in his system advanced ; and having so advanced, 
 they necessarily fell again, when this expenditure ceased. The 
 transition, therefore, from war to peace, or from a state of war 
 expenditure to the expenditure of our present establishments, it 
 Is, that has brought prices back to their original level. Now first, 
 if it were the expenditure of government, which raised prices 
 from the level of 1792 ; that expenditure having not been brought 
 hack to the level of 1792, would have now maintained a higher 
 scale of price than the present. The expenditure of government 
 during the war, was derived from two sources ; one was, its annual 
 receipt of taxes, and the other was money which it annually bor- 
 rowed. Of these the taxes, unfortunately for the country, still 
 remain ; and being collected in mdney of a higher value, than 
 was the money of the War, cause. In consequence, a consumption 
 6f the annual produce of land and labour, amongst the unproduc- 
 tive class to whom they are paid, to a much greater extent than 
 during any period of the war. The taxes, according to this sys- 
 tem, ought to have a greater effect on prices now, than at that 
 time. The effect of taxation on prices therefore, Mr. Blake, 
 Seeing that the taxes still remain, and act with greater efficacy 
 than ever, on all interests, and in all directions, except in sup- 
 porting prices, appears to abandon, or to speak of It In an extremely 
 cautious, and somewhat equivocal manner. But that part ot the 
 annual expenditure which was supported by means of loans, 
 ceased with the war. Prices fell at the same time. Overlooking 
 '■ • M
 
 82 
 
 therefore, that material circumstance, that prices advanced again 
 within three or four years after the war, and have now a second 
 time fallen ; this writer maintains, that in the effect of these 
 loans, is to be found the source of the high prices of the war. 
 If this opinion be correct, a nation engaging in war, and sup- 
 porting it by the joint resources of loans and taxes, will be able ta 
 make one of these support the other ; will be able by moans of 
 loans, to cause that advance of prices, which, though not capable 
 of being caused by taxation, is yet necessary to its imposition en 
 an extended scale. It is a kind of negative operation, which is 
 ascribed in this system to the Restriction act. That r.ct is made 
 to balance the effect of an expenditure on the part of government 
 abroad. This expenditure, it is said, would cause a drain of 
 money, and thus would counteract the eOcacy of loans in ad- 
 vancing prices ; but the restriction on payments in cash, pre- 
 vented this drain. This, then, being the system now proposed. 
 Its author has taken care to lay its foundation as broad at least 
 as his materials would admit. He finds by Dr. Hamilton, 
 that from 1793, to 1815, both years inclusive, the sura of 
 nearly 509 millions of sterling money, was borrowed by govern- 
 ment ; and then explains, in what manner he considers, that the 
 expenditure of this money acting as the conversion of capital inta 
 revenue, and by the consumption of goods without reproduction, 
 would cause a demand for goods and an increase in prices to the 
 full extent of those which we experienced. *' During the pro- 
 " gress of the war, 509 millions sterling were in this way de- 
 " voted to the purchase of commodities intended for consumption, 
 " instead of being devoted to reproduction. And I ask whether 
 " it be necessary to resort to depreciation in order to account for 
 " the high prices which such a market for consumption must 
 *' have occasioned." But this 509 millions, it is proper to ex- 
 plain, was neither sterling money, nor was it expended in this 
 manner. It did not possess much more than one-half of the 
 power over commodities and consumption, which sterling money 
 would, even according to this writer, have possessed ; and in the 
 next place, whether sterling money or not, it was not, as regards 
 the sum of 509 millions, thus expended. I have not Dr. Hamilton's 
 work at hand ; but I think it would have been found there ; for 
 it appears from official returns, that of the money borrowed
 
 83 
 
 between 1793, and 1815, nearly 200 millions, viz. 192 millions 
 was paid over to the commissioners of the sinking fund, and by 
 them applied to the discharge of other debts. So far, therefore, 
 it was not " devoted to the purchase of commodities, intended for 
 *' consumption ;"" it occasioned no "market for consumption," it 
 was neither paid as Mr. Blake, supposes, to the troops, nor to the 
 admiralty, nor the ordnance : it converted no capital into revenue; 
 but was a mere transfer of capital from one set of persons to an- 
 other ; both desirous to employ these funds as capital, and not 
 in unproductive consumption. Our estimate, therefore, of the 
 extent of commodities thus consumed without reproduction and 
 destroyed, whether affecting prices or not, must be reduced 
 from that quantity which would be represented by 509 millions 
 of sterling money, to that which would be commanded by about 
 300 millions of depreciated money. This fact, then, being put 
 right, let us examine this system somewhat further, " Five 
 *' hundred and nine millions, divided amongst the 23 years of 
 *' war, give an average expenditure of about 22 millions per 
 *' annum." Three hundred, or 320 millions therefore, so divided, 
 give about 13 or 14 millions for each year of the war ; which we 
 will take at 14 millions, and consider that as sterling money. It 
 is to the expenditure of this 14 annual millions then, and to the 
 market thus opened for consumption, that the high prices of the 
 war are to be ascribed ; the scale of those prices being after the 
 rate of 80s. or 90s, a quarter for wheat, with a proportionate in- 
 crease of wages ; and these prices being accompanied with great 
 general prosperity. Now it appears, that in the eight years of the 
 American war, an expenditure on the part of government sup- 
 ported by loans took place, to about the same annual amount, as 
 in the last war. The greatest part of the expenditure of the 
 last war was supplied by taxes. The taxes increased from 18 
 millions to 60 millions, without including the income duty of 
 
 14 millions. But the American war was almost entirely sup- 
 ported by this operation of expending borrowed money, which is 
 supposed to have so extraordinary a power on the prices of goods. 
 The taxes at the commencement of that war, produced more 
 than ten millions annually, and at its close they did not reach 
 
 15 millions ; they do not appear to have reached 13 millions, in 
 any year before the close of that wnr. But the money borrowed
 
 84 
 
 in that war was 100 millions, all in sterling money of full value, 
 which is after the rate of about 1^ millions yearly. The market 
 however for commodities, and for unproductive consumption thus 
 opened, was far from being accompanied with high prices or 
 prosperity. The state of the country may be seen, in the trifling 
 extent to which taxation could be then pushed ; as compared 
 with the taxes of the late war. Prices fell instead of advancing : 
 one peculiar and well-known feature which indicates their rate is 
 this ; that those who bought land with borrowed money, during 
 the loans and unproductive consumption of the American war, 
 established fortunes by the advance in land in the peace which 
 put an end to that expenditure ; whilst all those who so pur.^ 
 chased land in the late war, have been ruined by the fall of land 
 in the peace. So little reason then is there for the assertion, 
 that an expenditure supported by loans, is capable of raising 
 prices. But the American war, it will be said, was accompanied 
 with no Restriction act, That is granted ; and it was the late 
 Restriction act essentially and not incidentally, and not the loanr, 
 which raised prices. If the Restriction act had not increased the 
 amount of money in circulation, no degree of expenditure on the 
 part of government could have increased it ; and without that 
 increase, prices could in no degree have advanced. But let us 
 see the absurd station assigned to the Restriction act in this sys- 
 tem. That part of the expenditure of government which was 
 supplied by loans, it is said, raised prices : 80s. or 90s, 
 a quarter, became, we are to believe, no more than the natural 
 price of wheat, amidst the consumption of pommodities thus oc^ 
 casioned, The additional money thrown into circulation,, merely 
 supported these natural prices. The Restriction act did no piore 
 than protect this money in circulation, and counteract the effect 
 on prices of the foreign expeiiditure of government. That 
 foreign expenditure advanced the price of bullion, and would thus 
 have driven the increased amount of money from circulation, but 
 the Restriction act prevented it. But why are we to believe that 
 the high price of bullion, did not of necessity follow, like the high 
 price of all other commodities, from loans and internal expenditure ? 
 Is an internal expenditure or any other cause, which is capably 
 of advancing the price of commodities gensrrJly, not capable of 
 acting also on the price of bullion, considered as a commodity ?
 
 85 
 
 Can any thing so absurd be for a moment maintained, as that 
 that internal expenditure, which advanced the price of wheat ; 
 which is represented as having caused wages to advance to an 
 extent still greater than provisions ; and as operating on the 
 price not of those articles only, on which it was directly expended, 
 but on the prices of all commodities alike ; that such internal 
 expenditure must not of necessity equally operate on bullion ? 
 Whatever it was that raised the price of wheat, in the paper 
 money of the Restriction act, from 455. to 90s., must be admitted 
 to have been capable of raising bullion from 31. \7s. 10|d, to 51. 
 IS*. ; and that it must have raised bullion still higher, if its price 
 had not been kept down by the supplies thrown out from our cir- 
 culation. 
 
 "tVe are called on to ascribe the advance of bullion to an acci- 
 dental cause, and one not essential to the general advance of 
 prices. The prices of all commodities exccpting^ one alone;' were 
 advanced In conrenuence of one great and general cause ; thef price 
 01 that one particular commodity advanced also, but from a 'Cause 
 peculiar to itself, and this absurdity we are to agree to, in order to 
 avoid calling the advance of prices, by the terra depreciation of 
 money. But If we were to admit anything so preposterous, and were 
 to take this system In its full extent ; let us see to what further 
 conclusion It would lead. If the government then had embarked in 
 no foreign expenditure, there would have been then no advante of 
 bullion, nor any necessity for a Restriction act to support prices. 
 Let it be supposed then, that the government were now to com- 
 mence again a system of borrowing annually 14 millions, for the 
 purpose of defraying the annual charge of the dead weight, and 
 of the navy or ordnance ; or to render the comparison more com- 
 plete ; for the purpose of expending such 14" mlUibns, an- 
 nually on some object of unproductive Internal expense: such 
 as In the construction of arsenals or harbours, fortifications, or, if 
 we please, temples. And doing this, let us imagine that the 
 government embarked in no foreign expenditure ; and had re- 
 course to no restriction on payments In cash. This would be re- 
 placing us in that precise condition, to which this system ascribes 
 the high prices and prosperity of the war. The amount of loans 
 indeed differs ; but the sinking fund makes up for it. If to the 13 
 pr 14 millions proposed to be thus annually borrowed for internal
 
 86 
 
 expense, another 13 or 14 millions be borrowed for a sinking 
 fund, we shall then have re-established every one of those ingre- 
 dients of high prices and prosperity, the loss of which is said to 
 have plunged us in our present distress. But is it possible to 
 believe that by such means, prices could be advanced ; the price 
 of wheat to 80 or 90s., and of wages proportionably, and main- 
 tained for 10 or 20 years ; and if for 10 or 20, doubtless for 50 
 years. A system must be of necessity altogether false, which 
 can lead to such conclusion. 
 
 The manner in which this system of supporting an expendi- 
 ture by means of loans is supposed to operate, is by taking 
 capital which might otherwise be employed in producing goods, 
 and expending it in an unproductive manner, by which means 
 commodities would be lessened in quantity and prices supposed 
 to be advanced. Mr. Blake has shown from Adam Smith, how 
 it is that, as capital accumulates, the rate of profits diminishes. 
 But Smith has shown also, that with this accumulation of capi- 
 tal, wages advance ; and that whatever reduces capital, lessens the 
 wages of labour. But the state of things to be explained is one, 
 in which wages advanced with profits ; for Mr. Blake in one part 
 of his work, ascribes an increase in the price of agricultural produce 
 to a greater demand for it, arising out of a bettered condition of 
 the labourer. A diminution, or a lessened accumulation of capi- 
 tal, may account for higher profits on capital, but not for higher 
 wages, nor for increased prices, nor a condition of general prosperity. 
 A lessened quantity of goods might occasion a temporary advance 
 in monied prices ; but not an advance such as that indicated by 
 the price of wheat, and which continued for twenty years. Neither 
 could wages advance with such an advance in goods, nor could 
 that advance in goods be permanent. All diminution of the annual 
 produce of land and labour diminishes the revenue and consump- 
 tion of society at large ; it diminishes that fund so extraordinarily 
 large in this country, from which our labourers are'supplied with more 
 abundant commodities for their consumption, than are the labourers 
 of other countries. A system such as this examined, would find its 
 termination in the poverty it would produce. The American war, 
 and the loans which supported it, were terminated in that manner. 
 Make such a system sufficiently extensive. Increase 14 millions 
 jof annual loans to 20, 30, or 40 millions, and no surer founda-
 
 87 
 
 tion could be laid, for national impoveiishment, depopulatioir, 
 and decay. 
 
 The high prices and prosperity of the war, did not arise 
 from such a system as this, but existed in opposition to it. 
 High prices depend, as we shall see by Mr. Blake's own state- 
 nent, on other causes. " There is some ratio," he observes, 
 *' which ought to subsist between the total amount of the cur- 
 *' rency and the total value of the commodities to be circulated 
 " by it. If that ratio bo constant, the value of the currency 
 " must remain unaltered," (page 5). And further, " if the 
 ** circulation of commodities of 400 millions required a currency 
 " of 40 millions, and that this proportion of one-tenth was the 
 *' due level, estimating both currency and commodities in gold ; 
 *' then, if the value of commodities to be circulated increased to 
 '' 450 millions from natural causes, independent of depreciation. 
 *' I should say, the currency, in order to continue at its \q\^, 
 *' must be increased to 45 millions, or that the 40 millions must 
 *' be made to circulate with such increased rapidity, by banking 
 *' or other improvements as to perform the functions of 45 mil- 
 *' lions,"" (page 81). Let us assume, then, that we possessed in 
 1792, the 40 millions of money in circulation thus spoken of; and 
 that our annual commodities yielded to their praducers 400 millions, 
 after the rate of 45s. a quarter for wheat, and after the same ratio 
 for other commodities. A system of loans, and of expenditure, on 
 the part of government commences, and occasions a demand for 
 goods. Commodities, in consequence, rise in price, from 400 
 millions to 450 millions of price ; which is equal to an advance 
 of 12y per cent, or to 5s. a quarter on wheat. But, then, it 
 appears that this advance cannot take place, or if it take place, 
 cannot be maintained, without an additional 5 millions being 
 added to the circulation ; and no such addition can be made to 
 the circulation, except by means of a Restriction act. But we 
 know perfectly well, that if 5 millions could be added to the 
 circulation, prices must necessarily advance, either with or with- 
 out an expenditure on the part of government. Such expendi- 
 ture cannot advance prices, without an addition to the circula- 
 tion ; but an addition to the circulation would advance prices 
 without the expenditure. The 5 millions additional circulation 
 could not remain dormant. It would act in circulation with the
 
 88 
 
 40 millions, sink the value of the whole, and advance prices. 
 But the goods which produced in 1792, 400 millions of value irt 
 money, produced in 1814 towards 800 millions: as the quartef 
 of wheat which produced at the one period 4i5s., produced at thei 
 other 90*. ; and this alteration in prices could not have existed, 
 if the maxims just laid down from Mr. Blake be true, as to this 
 extent they undoubtedly are, without the 40 millions of money of 
 1792 being increased in 1814 to nearly 80 millions, or to some 
 ratio corresponding with the advance in prices ; or without an 
 additional celerity in the circulation of money, which brings us 
 to the same point. But if money doubled in c[uantity (or In the 
 celerity and efficacy of its circulation, in consequence of a change 
 in its character) ; and if with this, monied prices doubled, why 
 are we tp deny that the money was the cause of those advanced 
 prices, which cpuld not have subsisted without it ? I*or what 
 purpose, except that of throwing confusion round the real cha- 
 racter of this question, are we to seize on some incidental opera- 
 tion ; the only one, indeed, which we can find, that existed 
 during the high prices, and which does not now exist ; and then 
 to say, this it was that raised prices ; the additional money did 
 no more than support those prices? To maintain, on such 
 grounds, that money was not depreciated in value, is to revive 
 the old absurdity, contained in the resolution of the House of 
 Commons respecting the equality in value of the one pound note 
 and the guinea. The one pound note of 1814, would this system 
 say, would not, it is true, purchase so many comiiiodities as tfie 
 one pound note of 1792 ; but it was still of the same valUe 
 with respect to commodities. The commodities had risen : it 
 was not the one pound note which had fallen. The note was 
 of the same value as before : notes doubled in quantity, lessened 
 in their power, but remained of the same value. 
 
 That part, however, of the expenditure of government, which 
 was supplied during the war by annual loans, did in reality 
 advance prices in a very direct, though in a very different manner, 
 from that which has been just examined. If we take 40 millions 
 as the circulation of the country at the commencement of the 
 war, and assume that this amount could not be materially in- 
 creased without a Restriction act, no expenditure on the part of 
 government would have more than a very faint operation in ad-
 
 89 
 
 vancing prices. Whatever the demands or the consumption of 
 the government might be, it must be some part of this 40 mil- 
 lions, which they must employ in their purchases, and when 
 employed, the 40 millions would still remain the same in 
 amount, and capable of supporting no higher prices than before. 
 No conceivable degree of borrowing on the part of government, 
 of destructive debts, and abortive expenditure; whatever else 
 they might effect, could increase this 40 millions, materially affect 
 monied prices, or alter the relative value between money and 
 property. But if the government, when it went to market with 
 its increased demands for goods, carried thither a new creation 
 of money to pay for them ; and if, when that money was thrown 
 into the circulation, it was protected there by a Restriction act, 
 or, in other words, an act to prevent its being again withdrawn 
 from circulation, that operation would be calculated directly to 
 aflPect prices ; and this was, in fact, very materially the character 
 of these loans. The money was advanced, in the first instance, by 
 the Bank of England. The direct subscribers to the contract, 
 were themselves accommodated by the Bank with loans to the extent 
 of 70^. on every 1001. which they agreed to advance to the go- 
 vernment. The Bank did not lend the money directly to the 
 government, but they supplied it to those from whom the govern- 
 ment received it. These advances were made by the Bank in 
 additional issues of notes ; and the effect of each loan therefore 
 was, to force an additional tide of money into circulation through- 
 out the country. Each advance was repaid by the subscribers 
 to the Bank, but one loan succeeded another, until we came to 
 the end of the war ; and then the advances thus made were 
 finally repaid, and the notes withdrawn from circulation, pre- 
 cisely at the time when the Restriction act was made to ex- 
 pire. These advances did not at once occasion a proportionate 
 increase to the notes of the Bank of England. The Bank cir- 
 culation, in times of good credit, was principally confined to the 
 metropolis, and to the operations of the taxes ; but a powerful 
 impulse was given by every one of these loans, which filled the 
 channels of circulation with the paper of the private bankers, 
 throughout the country at large. Goods purchased in York- 
 shire or Staffordshire, were paid for in notes of the Bank 
 of England, to the agents of the sellers in London. But the 
 
 N
 
 90 
 
 Bank notes were not sent into Yorkshire or Staffoi-dshire. The 
 notes were retained in London, and formed the foundation on which 
 the country banker, on whose account they were deposited in 
 London, advanced his notes to the manufacturers for their 
 goods. These loans, therefore, caused an immediate addition 
 to the country circulation, as well as to that of the Bank of 
 England, and it was in this manner, and not by the destruction 
 of capital, that they advanced prices. 
 
 The destruction of capital by loans, was calculated to advance 
 in the manner which Mr. Blake has explained after Adam 
 Smith the profits of capital; but it was calculated to reduce 
 the wages of labour, and national wealth. But the extraordi- 
 nary phenomena presented by the state of this country during 
 the late war, were a lavish and ruinous expenditure on the part 
 of the government ; taxes and loans accumulated ; and all ac- 
 companied with a great and unexampled prosperity of the pro- 
 ductive classes ; high wages of labour, and high profits of 
 stock ; and an advance in real wealth, greater than the coun- 
 try had ever hefore made in so short a space of time. For this 
 combination of things, no consistent explanation can be given, 
 but by referring it to the well-known efiect on wealth and 
 productive industry, of that constantly increasing quantity of 
 money, which Mr. Blake's argument admits must have taken 
 place during this period ; and of that constantly diminishing 
 value of money ; the effects of which will be found to have been 
 well explained by Mr. Huskisson, in a speech on the state of 
 the circulation, made during the prosperity of 1818 ; in which 
 speech that gentleman descanted on the stimulus which had been 
 given to the industry, the arts, the wealth and prosperity of the 
 empire, by the extension of our paper circulation during the 
 Restriction act ; an operation similar, in his opinion, to that 
 which advanced the industry and prosperity of all Europe during 
 the depreciation of money which followed the discovery of Ame- 
 rica. And this second great depreciation of money in his opr- 
 nion imparted its effects collaterally to Europe, by the addition 
 to its circulation of 40 millions withdrawn from the metallie 
 circulation of this country ; advancing prices and stimulating 
 industry on the continent at large ; but again occasioning distress 
 and a fall of prices in Europe, when money came to be again
 
 91 
 
 withdrawn from thence to supply our raetalUc circulation.* 
 We find it admitted, that monied prices could not have ad- 
 vanced, during the war, without an increased quantity of money 
 proportionate to the increased monied value of commodities ; and 
 that this money could not have remained in circulation, without 
 the Restriction act, nor, as it follows,without producing the advance 
 in monied prices which accompanied its circulation. It is not, 
 however, easy to show the precise manner in which those two cor- 
 responded; nor has it ever been easy, or, indeed possible, to show 
 how, in an altered value of money, the altereii supply has corres- 
 ponded with the effect produced. All that has been ever yet done, 
 has been, to show the extent of the altered value of money, by the 
 rate of monied prices ; and to combine that with some known and 
 admitted source of an altered quantity of money. The peculiar 
 situation of our circulation during its depreciation, governed by 
 a public body, such as the Bank of England, which can have no 
 motive or desire for concealment on this head ; and the credit of 
 which has been placed on a more indisputable basis with every 
 inquiry which its conduct and situation has undergone, does 
 indeed afford very favourable means of examining the manner in 
 which depreciation was caused; how it corresponded with the altered 
 state of the country, and how it followed, and in what ratio, the 
 altered circulation. But we remain without the necessary in- 
 formation. No inquiry into the subject has yet been conducted 
 upon any consistent system, or with the necessary reference, at 
 once to the details of our peculiar system of circulation ; and to 
 the general principles by which the effects of money are governed. 
 Whoever examines the proceedings of the committees which sat 
 in 1819, will be at once sensible of the total want of system, of 
 the vague and incompetent manner in which their inquiries were 
 conducted. Those committees appear to have felt conscious that 
 they could make no use of correct information, and therefore 
 not to have desired to obtain it. With respect to the circulation 
 of the country bankers from time to time, which a systematic 
 and competent inquiry might accurately determine ; wc possess 
 nothing better than conjectures respecting it. AVc have the 
 nominal amount of Bank notes from time to time, but no other in- 
 
 * See speech of Mr. Huskisson, Isl May, 1818, in Hansard's Pari. 
 Debates, Vol. 38, p. 486.
 
 formation, except as far as is sufficient to show, that, from this alone 
 little can be known. How far and at what times the Bank circu- 
 lation was confined to the metropolis ; v/hat was the varying basis 
 on which it was from one time to another issued ; what portion 
 of bills of exchange were at different times withdrawn, to bring 
 out the notes of the Bank ; without this information and much 
 more, the mere amount of the circulation of the Bank, from 
 time to time, informs but little.* We commonly, also, leave out 
 of view the important consideration, that the old gold circulation 
 remained in conjunction with the additional paper in the early 
 part of the war, and a considerable portion of it until the 
 latter part. That circulation was only gradually displaced ; it 
 fell in value along with the paper with which it circulated ; and 
 much gold remained in the country until it was drawn out by 
 the high price to which gold rose in the last year of the war. 
 It would doubtless form the most dormant portion of the circula- 
 tion, but it would yet discharge a purpose, which would have 
 required paper-money, if the gold had not existed. According 
 to the estimate of Mr. Tooke, a very great part of the old gold 
 circulation, remained in the country throughout the whole period 
 of the war. The whole amount exported throughout the war is, 
 by him, estimated at no more than from 12 to 15 millions ; and of 
 necessity all that was not exported, remained. He draws this cal- 
 culation in part from some opinions or data of Mr. Huskisson*'s ; 
 but Mr. Huskisson himself, taking, no doubt, the same data into 
 view, took the amount exported during the war at 40 millions. 
 So vague are calculations respecting the nominal amount of the 
 circulation, and so little settled are the facts on which we have 
 to proceed, in attempting to show the correspondence between 
 the nominal amount of money and its actual value. The rapi- 
 dity also with which a money purely of paper, and not clogged 
 with the condition of payment in bullion, circulates ; and the 
 impi'ovements which the country bankers in the conduct of their 
 business, have founded on this description of money ; form a 
 feature of great importance, in estimating the effect on prices of 
 .any given quantity of money, 
 
 * The stamps on bills of exchange of a particular amount, in 1818, 
 appears to have been 16,138/. In 1821, the same stamps were 12,334^. 
 In 1818, no part of the larger amount of bills thus stamped was locked up 
 with the Baak. In 1821, a very considerable part of the smaller amount 
 
 ^as thus locked up.
 
 95 
 
 Mr. Blake, whose whole argument admits, that money must 
 correspond, either in its quantity or its velocity, with prices, thinks 
 that it was the failure of prices which caused in 1815 and 1816*, 
 the ruin of so many country bankers, and the consequent reduc- 
 tion of the country circulation. That opinion is partly correct, 
 though the real origin of this failure in prices is mistaken. 
 This period affords the only instance which can be found, 
 in which great failures amongst the country bankers were 
 accompanied with a positive reduction in the nominal amount 
 of the notes of the Bank of England ; then in the midst of 
 those preparations for gold payments, which Mr. Blake thinks 
 the Bank never made. It affords the only instance accord- 
 ingly, and fi'om this cause, in which great failures amongst 
 the country bankers, were accompanied with an advance in 
 the value of money, and a fall of prices. The reduction in 
 the Bank circulation then effected, was made in the face of a 
 great and a pressing demand for its increase- The effect of a 
 reduction so effected is not to be measured in any way by its 
 mere extent, because the circulation, to have kept it at its level 
 in value, ought then to have greatly risen. A reduction of the 
 notes of the Bank, in the midst of an increasing demand for 
 them, must be considered as a forced operation. This operation 
 preceded the proposed return to cash payments in 1814, 1815, 
 and 1816. It preceded again the cash payments of 1819 ; it 
 paralyzed, and reduced, and destroyed, in both periods, the general 
 circulation of the country, of which the Bank circulation formed 
 the centre and basis ; and this operation never took place during 
 the whole course of the measures under consideration, from 1797 
 downwards, except at these two periods, accompanied with a fall 
 of prices both of commodities and bullion. If the Bank of 
 England had not been then called on to pay its notes in gold, 
 or only to pay them in gold at 6/. or 7/. an ounce, there would 
 have been no material fall of prices at those times. There must 
 have been some shock at the peace, from the sudden change 
 in so many branches of industry ; but the Bank of England 
 would have supplied, as on former occasions, any reduction m 
 the circulation of the country bankers, and would thus have 
 protected and maintained prices, in spite of the lessened ex- 
 penditure of government. On the other hand, it is certain 
 also, that whatever might have been the relations, or the
 
 9* 
 
 system of government, whether at home or abroad, if our 
 paper money were required to be paid in gold at 3/. 17s. 
 10 ^d. an ounce, nothing could have prevented that reduction 
 of paper money and fall of prices, which accompanied the close 
 of the war ; and of this the operation at the close of 1818, 
 affords also proof, when prices again fell with the return of 
 money at SI. Us. 10|d., though no country bankers failed. 
 If a Restriction act were again now passed, either with or 
 without any complicated machinery, of increased expenditure 
 on the part of government ; within two years or one year, the 
 issuers of paper money would raise prices to the prices of the war ; 
 and if the gold standard were made to conform to those prices, 
 they would be rendered permanent. If under those circum- 
 stances, the merchants did not apply to the Bank for discount, 
 nor the government for advances, the Bank would purchase 
 Exchequer bills with their money ; and the country bankers, 
 if the traders and farmers did not apply for advances, would 
 make purchases themselves. With more or less celerity, but with 
 absolute certainty, the circulation would be filled with the quan- 
 tity of money, which the price of gold ultimately permitted to 
 remain in it. 
 
 " Prices began to fall,'"* Mr. Blake observes, " immediately 
 *' after the conclusion of the war." It was certainly at that 
 time that the Restriction act was made to end ; but prices 
 advanced again in two years from that time, when the Restric- 
 tion act was renewed. He considers that the Bank made no 
 preparation for cash payments. The advancing their notes to 
 the loan subscribers, and which were of course returnable at the 
 peace, was a preparation for cash payments. But the evidence 
 given to the committees of 1819, shows that the Bank directors 
 made anxious preparations for cash payments, by calling in their 
 advances to government for the purpose of reducing their circu- 
 lation, and by reducing that circulation amidst demands for its 
 increase. The deputy governor of the Bank stated expressly, 
 that the merchants applied for increased discounts ; as the notes 
 lent to government were repaid to the Bank ; but that the 
 efficacy of any given amount of Bank notes in circulation, 
 " would depend very greatly on the securities on which such 
 " advances were made ;"" and that notes advanced on discounts 
 ta the merchants, and returnable every two months, were of very
 
 different effect in circulation, from the same quantity if advanced 
 to government, or to the merchants, if on permanent security. 
 The Bank is prepared, as Mr. Blake observes, to advance to the 
 merchants, but the merchants do not apply. They cannot ap- 
 ply, according to the rules on which the Bank advances to mer- 
 chants, to such an extent as to cause any excessive issues of 
 notes. They do not possess, in sufficient abundance, those par- 
 ticular securities, Bills of exchange, on which alone the Bank 
 advances to the merchants : and further, every Bank-note which 
 is in circulation, through discount to the merchants, represents a 
 bill of exchange, taken from aiding the circulation, and deposited 
 with the Bank. " The Bank issues," Mr. Blake continues, 
 *' were, upon an average, constantly increasing* from 1813 to 
 ** 1819 ; and since that period, and since the resumption of cash 
 ** payments, there really does not appear to have been any mate- 
 " rial diminution of the circulating medium, as far, at least, as 
 *' the issues of the Bank of England form any criterion by which 
 ** to judge of the amount ; inasmuch as the quantity of coin and 
 *' Bank-notes together form a larger amount than when Mr. 
 " Peel's bill passed into a law." And, consistently with these 
 assertions, he maintains, that it is not the termination of the 
 Restriction act, or the measures necessarily accompanying it, 
 that have reduced prices, but that '* the great and mighty source 
 " of the distresses felt by all classes of producers has been, the 
 " transition that took place at the termination of the war. The 
 ** transition from an immense, unremitting, protracted, effectual 
 *' demand for almost every article of consumption, to a compara- 
 ** tive cessation of that demand."" From 1813 to 1814, the Bank 
 circulation increased. It then fell in 1815 and 1816. It 
 was again increased, and now again reduced. I have already 
 explained in what manner, as far as the mere nominal amount 
 of Bank-notes is concerned, that amount must be taken, to 
 have been reduced at the peace, and then increased; and lastly, 
 reduced again, and to what level. It has been shown also, that 
 
 * Speech of Mr. Horner, January 1816. " The average amount of the 
 *' Bank circulation was not, during the last year, more than between 25 
 * and 26 millions; whilst, two years ago, it had been nearer 29 millions, 
 " and had at one time «ven Brmoriirtwl to 31 millions."
 
 96 
 
 the government demand thus spoken of, and the termination of 
 it, exists still, except as far as it was supplied by loans ; and 
 how incompetent was the operation of loans to the effect ascribed 
 to it. But to prove conclusively, as it must be admitted to do, 
 that the prosperity of the war, and its high prices, were neither 
 occasioned by its taxes, nor its loans, nor the unproductive ex- 
 penditure of the government ; and that the present state of things, 
 has not been owing to the termination of those hitherto unheard 
 of sources of national prosperity and wealth ; let us here, first 
 giving Mr. Blake's description of the state of the country at 
 present, which he ascribes to the transition from war to peace, 
 set down more particularly some facts, the character of which 
 cannot be mistaken, exhibiting the state of the country in the year 
 1818, when that transition was of three years date; and when 
 nothing remained of the war or its operations that is not in ex- 
 istence now, the Restriction act alone excepted, which was then, 
 but which is not now, in operation. 
 
 This, then, is the present state of the country as thus de- 
 scribed, and imputed to the transition which took place in 1815: 
 " The distress that has pervaded all classes of producers since 
 *' the termination of the war, has been greater, perhaps, than 
 " ever was known before ; the manufacturers are said to be re- 
 " covering, and it may be so ; but I suspect the masters can 
 " only find a market by selling their goods at a very low rate of 
 " profit ; and the artizans can only find employment by working 
 " at a low rate of wages. — The state of the agriculturist is ca- 
 " lamitous beyond all former example. — Lessened production 
 " appears the natural and only remedy. — The inevitable conse- 
 " quence must be, a general fall in the nominal amount of the 
 *' whole landed rental of the kingdom. — In the course of the last 
 " six or seven years, farming capital has sunk to nearly half its 
 " former value, and the loss must be submitted to." This, then, 
 being the state of things, and the cause of it being ascribed to 
 the termination of the loans and expenditure of the war, let us 
 see the condition of the country three years after all those had 
 closed. 
 
 In the year 1818, the average price of wheat was 84^. Id. a, 
 quarter. This was a period, therefore, of prosper'ty for the 
 agriculturist ; and to prove that this price did not arise from 
 scarcity, but that it was attended with a condition equally
 
 97 
 
 prosperous for the manufacturer, it is sufficient to refer to the 
 evidence of Mr. Hodgson, a merchant of Liverpool, before 
 the agricultural committee of 1821, with respect to the great 
 towns of Liverpool, Manchester, Birmingham, Sheffield, and 
 Leeds. It there appears, from documents which that gentleman 
 had collected, and of the accuracy of which there can be no dispute, 
 that a great and universal reduction in the quantity of butcher's 
 meat consumed in every one of those towns (to which alone his 
 inquiries extended) had taken place in 1819, 1820, and 1821 ; 
 as compared, not with the consumption of the war, but with the 
 consumption of 1818, when meat was at its highest price. The 
 average reduction, in the whole of those towns, some of which 
 suffered more severely than others, amounted to more than 15 
 per cent. It was shown by returns of the number of hides ; 
 and as it is only amongst the lowest classes that distress could oc- 
 casion a lessened consumption of butcher's meat, the reduction 
 must have been much greater than 15 per cent amongst those 
 classes. With respect to the town of Birmingham in particular, 
 a petition, which was presented to parliament in 1821, describ- 
 ing a state of distress there existing, deplorable almost beyond 
 example, described that distress as forming a contrast with the 
 prosperity, not of the war, but of the year 1818. What can 
 afford a more decisive proof of the wretched condition of the 
 manufacturing classes at one time, than to find them consuming 
 lessened quantities of butcher's meat as the price of butcher's meat 
 fell; or of their prosperous condition at another time, when 
 their consumption was the highest, although the price was at its 
 highest rate ? That this prosperity reached to commerce is shown, 
 in the most decisive manner, by the evidence given to the com- 
 mittee on foreign trade in 1820, relating to shipping. The 
 number of transports thrown out of employment by the govern- 
 ment at the peace, was supposed (according to that system by 
 which each class of traders uniformly endeavour to account for 
 any change in its condition by some particular cause, and not by 
 any general operation) to have been the main cause of the ruinous 
 depression in the value of merchant ships which then took place. 
 In 1820, the committee of foreign trade, ask Mr. Tindall, a 
 ship-builder, if the distress then felt did not so originate ? But 
 bis answer is, that, in 1818, the value of ships had recovered 
 
 O
 
 98 
 
 from that depression ; and that there was enough employment for 
 all the transports, and for all other ships in 1818 at good freights. 
 Mr. Tooke, who also gave evidence before that committee, ap- 
 pears to have given a similar statement. " In 1818," says he, 
 " I had very great difficulty indeed in getting the requisite 
 " quantity of shipping." And being asked if that circumstance 
 occurred at any particular time, answers, " through the whole 
 " season of 1818." But, in 1819 and in 1820, ships were again 
 too numerous for commerce ; and then Mr. Tooke says, " he 
 " could have procured double the quantity of tonnage he desired." 
 Mr. Marryatt, in a speech in the House of Commons, also in 
 1820, gave an account which exemplifies this extraordinary 
 reverse, by a reference to the price of ships, and to the fall which 
 had taken place, not since the peace, but since 1818. " The 
 '* Sesostris," he says, " which cost, in 1818, 12,175/. was sold 
 " in 1820 for 6,300/.,*" and of such fall, he gives numerous other 
 instances, and considers them as no more than corresponding 
 with the general fall of shipping since 1818. There can be no 
 more decisive proof of the prosperity of commerce in 1818, or of 
 its subsequent reverse, than is here shown in the condition of 
 the mercantile navy. Commerce, manufactures, and agriculture, 
 all at this time flourished alike. They all existed in a condition 
 precisely the reverse of that which Mr. Blake describes justly as 
 their condition at this time ; but which condition he ascribes to 
 the peace of 1815. That the high prices of 1818, which enabled 
 the agricultural community to discharge their engagements, 
 were the consequence of no scarcity : that they were the prices of 
 abundance, and not of scarcity ; of a depreciated money, and 
 not of a scanty supply, is manifest from their being accompanied 
 with a general and great prosperity ; of which the condition of 
 the revenue, prosperous at that time beyond its most flourishing 
 condition at any other period, gives also decisive evidence. The 
 report of the finance committee of 1819 gives this statement of 
 th6 revenue in 1818 : *' It also appears, that the total revenue 
 *' of Great Britain, in the year 1818, exceeded the same revenue 
 « for the year 1817, by the sum of 1,705,510/. ; and that the total 
 " revenue of Ireland, for the year 1818, exceeded that for 1817, 
 " by the sum of 192,969/., making a total improvement of the 
 " revenue of the United Kingdom, as compared with 1817, of
 
 99 
 
 " 1,898,479/. ; but this comparison will be rendered still more 
 *' correct, and the result will be more favourable, if the sum of 
 *' 2,330,531/., being the amount of unappropriated war duties 
 ** received in 1817, be deducted from the revenue received in 
 *' that year ; and if the sum of 566,639/., the amount of un- 
 " appropriated war duties received in 1818, be also deducted 
 *' from the total revenue received in 1818. It will then appear, 
 " that an improvement to the amount of 3,662,371/. has actually 
 *' taken place in the permanent revenue of the United Kingdom 
 " in 1818, as compared with 1817." 
 
 Here, then, is a condition of the country, in the midst of 
 that period which has elapsed since the peace, which is at least 
 as prosperous as was any period of the war, and during which prices 
 were as high. It was accompanied with none of that destructive 
 operation, of converting capital into revenue, by the ruinous ex- 
 penditure of government, in spite of which it was, and not in 
 consequence of it, that this country flourished during the war ; 
 but it was accompanied with a value of money which corresponded 
 with that of the war, and by which the enormous expenditure 
 of the government, throughout its million channels, fed from the 
 resources and the burthens of the people, were moderated and 
 reduced. The command over the annual produce of the land 
 and labour of the country, which the taxes gave in that year to 
 the unproductive classes, was greatly less than that which the 
 same taxes now give them ; a like change was made in the 
 revenue of the unproductive classes of whatever kind. The 
 burthen on production was thus reduced, and brought back to 
 that scale in which it had been originally imposed ; and the 
 classes of producers relieved from unjust and intolerable burthens, 
 and set free from false constructions of legal contracts, felt at that 
 time none of that intense misery, in which they are since involved. 
 This condition of the country in 1818 cannot be examined with- 
 out its being found to afford demonstrative evidence, that the 
 present state of distress had not its origin in the transition from 
 war to peace, or in any circumstances necessarily connected with 
 the re-establishment of peace. It becomes most certain, that we 
 must look to other sources for the cause of that distress. What- 
 ever that cause has been, in the year 1818, it was removed ; and 
 that the depreciated value of money which at that period adjusted
 
 100 
 
 private contracts, as well as public burthens, by re-establishing 
 the standard they were formed in, arose out of the renewal of the 
 Restriction act in 1816, and its corresponding measures, appears 
 perfectly manifest. Difficult as it is to trace the operations of 
 money at any time, and to show in what manner the cause and 
 effect have precisely corresponded, we have yet, with respect to 
 this period, from 1816 to the present time, the particulars of 
 those operations, in part at least, very distinctly before us ; and 
 as they have been explained in the former part of these pages, 
 they must be considered as adequate and necessary causes of 
 those alterations in monied prices, and in the state of the coun- 
 try with which they have been accompanied. 
 
 The measures then adopted, consisted of a forced emission of 
 the paper money of the Bank of England, which must be taken 
 to have been to the extent of about seven millions ; and subse- 
 quently of that seven millions being again forcibly withdrawn ; 
 both operations followed by a corresponding increase, and a cor- 
 responding reduction of the paper of the country bankers and of 
 bills of exchange. 
 
 These facts, and the state of prices and of the country, con- 
 nected with them, appear to me to be perfectly conclusive also, 
 as to the causes of the depreciation and of the prosperity of the 
 war. 
 
 THE END. 
 
 T. C. Hansard, Printer, 
 Peterboro'-court, Fleet-street, London.
 
 M^^rit'^H^
 
 
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 UNIVERSITY OF ILUNOIb-UMD« 
 
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