THE UNIVERSITY 
 
 OF ILLINOIS 
 
 LIBRARY 
 
 332 
 B875 
 
 V/8
 
 2p- 
 61 ft 
 
 
 
 
 :• ; :■■■■ 
 
 ■ 

 
 
 LETTER 
 
 TO THE 
 
 RIGHT HONOURABLE THE 
 
 EARL OF LIVERPOOL, 
 
 First Lord of the Treasury, ic. &c. &c. 
 
 ON HIE 
 
 IMPOSSIBILITY 
 
 OF A 
 
 SPEEDY RETURN 
 
 TO A 
 
 4£oVO ttumncg* 
 
 BY CHARLES LYNE, ESQ. 
 
 LONDON: 
 
 PRINTED FOR J. M. RICHARDSON, 23, CORNHILL, 
 
 OPPOSITE THE ROYAL EXCHANGE; AND 
 
 J. HATCHARD, PICCADILLY. 
 
 1*1!)
 
 W. MarchaiU, Printer, Ingram-court, Londoifc
 
 A LETTER, 
 
 8sc. 8$c 
 
 My Lord, 
 THE great importance of the ques- 
 tion now at issue, whether the Paper- 
 Money-System of this country is to be 
 persevered in, or discontinued, is a suffi- 
 cient excuse for the observations of any 
 individual: nay indeed it would rather 
 be inexcusable to withhold sentiments 
 which may be conceived useful on such 
 an important occasion, in which the 
 welfare of the community is so much 
 involved : — it is this impression that 
 a 2
 
 induces me to submit to your Lordship's 
 more enlightened understanding the fol- 
 lowing observations ; with the view, and 
 in the hope, that they may, in some 
 degree, tend to elucidate a question, 
 which, though of the most vital conse- 
 quence, it is evident, is by the public 
 but imperfectly understood. 
 
 That the great and essential bearings 
 of this subject have not been sufficiently 
 developed, is evident, from the variety 
 of adverse opinions so tenaciously ad- 
 vocated on both sides ; whereas, every 
 additional light that can farther be 
 thrown upon it may, it is presumed, 
 lead to its better comprehension, and 
 to a consequent nearer approach of 
 sentiment in those who are to decide ; 
 while it is now become also equally 
 requisite, that the public at large should 
 have a more comprehensive view of the
 
 expediency of what is ultimately to be 
 determined upon. 
 
 The former discussions of this question, 
 especially in the year 1810, by the legisla- 
 ture, and by numerous individuals, suffi- 
 ciently evinced at the time, that the senti- 
 ments and opinions of those who then 
 spoke and wrote on the subject were 
 by no means mature, nor so clear and con- 
 clusive, as to carry conviction either to 
 the minds of those who thought different- 
 ly, or to those whose opinions were yet 
 to be formed ; and, as circumstances es- 
 sentially applicable to the question have 
 since occurred, which in many points 
 completely confute erroneous opinions 
 that were at that period, and are still 
 strongly contended for ; while a variety 
 of new and important matter now offers 
 a developement of bearings that were 
 not, on the former occasion, even in the
 
 contemplation of those who then dis- 
 cussed the subject, it appears on these 
 grounds the more requisite, that those 
 who have now turned their thoughts to 
 the question, should diffuse the new 
 lights which so materially affect it. 
 
 It is to be presumed that no person, 
 who is at all acquainted with the 
 financial state and expenditure of the 
 United Kingdom for the last twenty-five 
 years will contend, that she could have 
 made the efforts, or have obtained the ob- 
 ject she has, (the pacification of Europe,) 
 without the charge of an immense ex- 
 penditure ; or, that such expenditure 
 could have been incurred, without our 
 Paper-Money-System; hence it will be 
 admitted, that our present enormous 
 debt could not consequently have been 
 contracted without our paper-money ; 
 on this point, it is presumed, all are
 
 agreed. This enormous debt then being 
 contracted by the means of paper-money, 
 it is conceived by many, that it is ex- 
 pedient we should return to a metallic 
 currency; and without investigating the 
 practicability of such a system, or the 
 consequent result, they strongly contend 
 for its adoption ; and that, on the fasci- 
 nating delusion, that by so doing, we 
 should not only reduce the price of all 
 necessaries of life and of luxuries, and 
 consequently emerge from a state of 
 comparative difficulty to one of ease and 
 affluence ; but that we should place the 
 stability of the country on a more solid 
 and permanent foundation ; as if that 
 was at all dependent on its being pos- 
 sessed of thirty or forty millions of 
 bullion more or less. Now it does ap- 
 pear evident, in the first place, that it 
 is not possible, in the present augmented 
 state of increased traffic and increased
 
 8 
 
 debt of the country, (requiring a con- 
 sequent increase of circulating medium,) 
 to acquire such a quantity of bullion as 
 will enable us to return to a metallic 
 currency ; and secondly, that if, under 
 such circumstances, the attempt was 
 to be made, every individual in the coun- 
 try, rich and poor, land-owner, stock- 
 holder, manufacturer, mechanic, and 
 labourer, would suffer most dreadfully 
 by the experiment ; and after all it 
 will be seen, that it can only be a 
 fruitless attempt. 
 
 With the good faith and immeasurable 
 resources of this country, it has not been 
 a difficult task to contract an enormous 
 debt by virtue of our paper-money sup- 
 ported by the Bank Restriction-Act ; but, 
 it is not possible, under existing circum- 
 stances, to pay in specie the interest of 
 this paper-money-created debt ; nor is it
 
 possible to acquire, under these existing 
 circumstances (hereinafter enumerated), 
 an adequate quantity of gold bullion for 
 the common purposes of circulation. It 
 must be kept in mind, that our paper- 
 money circulation is not confined to 
 Bank of England notes ; — these form the 
 smallest proportion of the currency, or 
 circulating medium of the United King- 
 dom ; whereas, if by the discontinuance 
 of the Bank Restriction-Act, we invalidate 
 the legality, and lessen the confidence in 
 that paper, which is so essentially solid 
 by its debt from government, it is not to 
 be conceived that the confidence in the 
 country bank notes and the Irish notes, 
 (for which there is no security to the 
 public,) is to remain unimpaired ; if then, 
 as must be calculated upon, the confi- 
 dence of the public be shaken, it is not 
 the amount only of the Bank of England 
 notes that is to be provided for by a metallic
 
 10 
 
 currency, but it is for the country bankers 
 and Irish notes also; for the country must 
 be provided with a currency commensurate 
 to what is now in circulation; or otherwise, 
 the traffic, agricultural, commercial, and 
 every other, must be curtailed, and with it 
 the means of every individual ; and hence, 
 the consequent reduction of the revenue. 
 
 It may be conceived by those who are 
 advocates for the discontinuance of the 
 restriction, that the government have 
 only to sacrifice something in paying an 
 additional price to obtain a sufficiency 
 of gold ; or it may be conceived, that 
 the public will, for the most part, be 
 satisfied, as hitherto, with paper-money ; 
 in respect to the former it will be found, 
 that no additional price will command 
 a sufficient supply of gold bullion ; 
 and as to the public being satisfied to 
 take paper-money when they have the
 
 11 
 
 option of gold, that must altogether de- 
 pend on future contingencies ; and those 
 of various kinds, which can neither be 
 defined, nor even taken into any tangible 
 sort of calculation for the present. — 
 Bank of England notes have, in virtue of 
 the Restriction- Act, stood unimpaired the 
 test of very severe trials, and they have 
 served every lawful purpose, to the ge- 
 neral benefit of the whole community ; 
 but, if the Restriction-Act be withdrawn, 
 the nature and validity of these notes 
 become at once changed. 
 
 But suppose, for the sake of argument, 
 that the confidence of the public was not 
 to be diminished, as to the solidity of 
 the bank-notes, especially as long as we 
 continue in peace ; it becomes neverthe- 
 less necessary to consider, while the public 
 have the option of calling for gold or for 
 notes, what are the causes that will occa- 
 sion them to call for and prefer the former ;
 
 12 
 
 a war, or even a strong rumour of war, 
 never fails to cause an alarm, and that 
 alarm will always be found to have a 
 considerable influence in withdrawing 
 gold coin from circulation ; and as 
 its disappearance becomes manifest, so 
 much the more does it become looked 
 for, — hence a rise in the price of bullion, 
 and from that arises the unlawful melting 
 of coin into bullion ; and if to this be 
 added the probable unfavourable turn in 
 our exchanges, thence follows the other 
 drain of unlawful export of the gold 
 coin : — but these contemplated drains of 
 gold arise from political causes, — there 
 are other causes which are equally power- 
 ful, and in the course of nature are 
 likely to occur over and over again, and 
 probably at more early periods ; — a bad 
 harvest, for instance, causes an almost 
 immediate balance of payments against 
 England ; which, in its usual rapid pro- 
 gress, will in a very short time outstep
 
 IS 
 
 any balance of payments arising from 
 our progressive exports, and cause conse- 
 quently an almost immediate depression 
 of our exchanges, and hence a never- 
 failing drain of our gold coin. 
 
 The funds and the financial state of al- 
 most every country in Europe are now be- 
 come an important vent for the investment 
 of English property; it is well known, that 
 they stand, almost all, in need of great 
 pecuniary aid ; and that a great propor- 
 tion of that aid will necessarily be ob- 
 tained from England ; it will be had 
 from hence by the great disparity of in- 
 terest of money obtainable here with 
 that offered by investment in foreign 
 funds : hence therefore, another certain 
 and progressive drain of English capital, 
 which will most likely go on increasing, as 
 individuals go on gaining additional confi- 
 dence in the stability of foreign govern- 
 ments, more especially in respect to France;
 
 14 
 
 to this must be added the very considerable 
 expenditure on the Continent by English 
 emigrants ; and it will appear, that these 
 two objects, with the amount of the im- 
 ports, will more than counterbalance the 
 amount of our exports : — from this must 
 follow a continued unfavourable state of 
 our exchanges, causing consequently the 
 occasional export of gold coin. 
 
 These are all causes why we must look 
 to an almost certain though occasional 
 export, and consequent decrease of gold ; 
 whereas, by the discontinuance of the 
 Restriction-Act, and a consequent return 
 to a metallic currency, we should stand 
 in need of an immense import and in- 
 crease of gold ; it becomes necessary 
 therefore, to examine how far, under the 
 present existing circumstances, it be pos- 
 sible to obtain such a quantity of bullion 
 (gold bullion, be it understood, as here- 
 after explained) as will supply the place
 
 15 
 
 of the paper money (Bank of England, 
 country bankers', and Irish notes) now 
 forming the circulating medium of the 
 United Kingdom. — To draw a fair esti- 
 mate of this difficulty, (it may be said, 
 indeed, of this impossibility), it will be 
 right to come to some estimate of the 
 notes now in circulation : — taking there- 
 fore the Bank of England notes at the 
 
 sum of .£25,000,000 
 
 And the country bankers' 
 notes in England, Scot- 
 land, and Ireland, at . . ^40,000,000 
 
 They together form an ag- . 
 
 J h 8 <• ,£65,000,000 
 
 gregate sum of 
 
 It is to the whole of this paper-money 
 circulation of the United Kingdom that 
 we must look, and not to the Bank of 
 England notes only : no person at all 
 conversant in matters of this kind will
 
 16 
 
 it is presumed, for a moment admit the 
 propriety of curtailing the circulating 
 medium of the country ; — the agricul- 
 tural distress in the year 1816, occasioned, 
 in a very great degree by a diminution of 
 the circulation of country bankers' notes, 
 is quite sufficient to show the dreadful 
 consequences that are to be expected in 
 the event of a general diminution of the 
 circulating medium of the United King- 
 dom ; which diminution would inevitably 
 tend to the utter ruin of many, and to a 
 general reduction of the profit, and to the 
 impoverishment of the means of every 
 individual ; consequently, to the utter 
 impossibility of collecting any thing near 
 the present amount of taxes. — It is then 
 to the ,£65,000,000, that we are to look 
 as the circulating medium of the United 
 Kingdom ; and taking into consideration 
 the causes aforementioned, which occa- 
 sion, and must continue to occasion, a
 
 17 
 
 demand for gold in preference to notes, 
 it becomes proper to examine how this 
 sum of .£65,000,000 of gold, or indeed 
 any thing near it, can be obtained to sup- 
 ply the place of the paper-money. — Gold 
 is mentioned to the exclusion of silver, as 
 speaking of the coin of the country, be- 
 cause, by a late act of Parliament, gold 
 coin, iftheRestriction-Act be discontinued, 
 will become the only legal tender for 
 payments beyond the sum of forty shil- 
 lings, to which it has been thought pro- 
 per to limit the payment of silver; and 
 because also, the standard is fixed only in 
 reference to gold, not to silver; gold is 
 therefore the metal that we are to look 
 to for supplying the place of Bank of 
 England and of country bankers' notes; 
 and how a sufficient quantity of that 
 metal is to be obtained under existing 
 circumstances, becomes the question 
 for consideration. 
 
 B
 
 18 
 
 That the Bank of England may or may 
 not be prepared for the resumption of gold 
 payments, as far as it may be called upon 
 for its own notes, is not the object of this 
 Letter to discuss : it would be hard indeed, 
 if by the calling in of a great portion of 
 bank-notes, it could not be so prepared ; 
 but because the Bank be presumed to be 
 so prepared, is that a sufficient motive for 
 the discontinuance of the Restriction-Act ? 
 What is to become of all the other part 
 of the circulating medium of the king- 
 dom ? for the Bank of England notes, it 
 must be recollected, form the smallest 
 proportion ; nor is the will, the welfare, 
 or interest of the Bank of England to be 
 taken solely in view, as a guide of what 
 can or ought to be done ; no more than, 
 because the Bank of England can stand 
 the withdrawing of the restriction, is it 
 to be effectuated, and all the other great 
 interests of the public be lost sight of. 
 
 ■
 
 19 
 
 The public must have a circulating 
 medium commensurate to its wants in 
 the present increased state of debt, of re- 
 venue, and of general traffic ; it is there- 
 fore requisite to look to a supply of gold 
 far beyond what may be necessary merely 
 to enable the Bank of England to resume 
 cash-payments ; and how to obtain that 
 large supply, and to continue it in circu- 
 lation when obtained, is the question 
 for examination: — to proceed to this, 
 it will be necessary to have in view the 
 financial state and the financial wants of 
 other countries, as well as our own ; in- 
 asmuch as those countries are all requir- 
 ing and acquiring additions of gold and 
 silver for their wants of increased circu- 
 lating medium. 
 
 It must be in the knowledge of 
 every person, that as the traffic, the ex- 
 penditure, and the debt of a country in- 
 b 2
 
 20 
 
 crease, so must its circulating medium ; 
 and that the late long and expensive war 
 has considerably increased the expendi- 
 ture and debts of every country engaged 
 in it; and that these augmentations of 
 expenditure and of debts have therefore 
 increased the circulating medium of every 
 power in Europe : — it will be further in the 
 knowledge of the public, that the many 
 attempts at circulating an undepreciated 
 paper-money have failed in every part 
 of the world, England alone excepted ; in 
 some parts the attempts have failed in toto, 
 the paper-money becoming of no value 
 at all ; — in others, it has passed, and now 
 passes, at considerable rates of discount, 
 more or less, according to circumstances ; 
 in Russia, Spain, and Portugal, the dis- 
 counts are at this moment very conside- 
 rable ; this then is the state of most all 
 the continental powers, with an increased 
 circulating medium, requiring an increas-
 
 21 
 
 ed quantity of gold and silver : and as 
 they have a positive and absolute need of 
 these precious metals, inasmuch as they 
 do not possess an undepreciated paper- 
 currency to supply the place of gold and 
 silver coin, so it follows, that they must 
 and will pay a high price, and make a 
 great sacrifice to obtain them ; — this so far 
 shows the competition, the powerful com- 
 petition, we have to contend with for an 
 article for which in fact we have no real 
 call; nor have we ever stood in so little 
 need of it for purposes of circulation, 
 since the commencement of our paper- 
 money. 
 
 Now it does happen also, that while 
 the demand is so unusually great for a 
 general increased circulating medium, 
 there is also an increased demand for it, for 
 consumption of another kind, for domes- 
 tic purposes ; and if enquiry be made
 
 into that particular, it will be found that 
 this consumption is by no means in- 
 considerable. 
 
 The next consideration will refer to 
 the supply, and it so happens, that while 
 there is such an increased general demand 
 and consumption, there is a much smaller 
 supply than when the demand was not 
 near so large as it now is ; and moreover, 
 that the diminished supply from the 
 mines in South America has been for 
 many years subject to embarrassments 
 which are now increased; this diminished 
 supply being also now subject to impe- 
 diments which formerly did not exist, 
 occasioned by the war in South Ame- 
 rica, which has not only the appearance 
 of long continuance, but may possibly 
 be carried to such a length, as for a time 
 to put an almost complete stop to any 
 importation from thence; and yet under 
 
 z
 
 23 
 
 all these circumstances of increased de- 
 mand, with a diminished and uncertain 
 supply, we are willing to persuade our- 
 selves, that we stand in great want of this 
 article, of which, in fact, we never had so 
 little need ; and are even eager to carry 
 this imaginary want so far, as wantonly 
 to take away the main prop and validity 
 of our most excellent substitute, an un- 
 impaired paper-currency, which has stood 
 the test of all our difficulties ; so that in 
 creating this imaginary want into a real 
 one, we may, in that case, make the wel- 
 fare of the country eventually depend on 
 an unusually great supply of gold, which 
 in fact is not to be had, and without 
 which, experience has shown that the 
 wisdom of our Restrictive-Act has ena- 
 bled us to do so well ; not only to enable 
 us to carry into execution all our own 
 purposes, foreign and domestic, political 
 and commercial, but also to assist the
 
 24 
 
 principal continental powers to carry into 
 execution their extensive operations and 
 expenditure ; and now after all our pe- 
 cuniary difficulties are surmounted, we 
 are to be told, that if we do not return to 
 a metallic-currency, " some dreadful ca- 
 lamity is inevitable;" surely we are not 
 to suppose, that such is the serious con- 
 viction of any well-informed man : — Sup- 
 pose it were possible to obtain forty or 
 fifty millions of gold for circulation, and 
 that by some accident the whole of it 
 was to be sunk into the sea, are we to be 
 told that the country was ruined ? or 
 even that its resources were to be consi- 
 dered as materially impaired ? it is not 
 to be believed that such a sentiment can 
 be seriously entertained. 
 
 It is, doubtless, rather difficult to per- 
 suade theorists that bank-notes are as 
 good for purposes of circulation as gold 
 

 
 25 
 
 coin ; even after the long experience they 
 have had ; and that experience too ob- 
 tained in time of great difficulties : but 
 the very idea of gold against paper-money 
 is really so very prepossessing to unin- 
 formed minds, that we ought not to be 
 astonished at many being misled : — the 
 public are moreover taught to believe, that 
 if we had no paper-money, and that gold 
 was consequently to be the currency, we 
 should get more for our money than we 
 now do : — so we probably should ; but let 
 them recollect also, that we should by that 
 change of system have much less money 
 to expend ; for if our circulating-medium 
 was now to return to gold, that circulating- 
 medium must be extremely reduced ; and 
 that reduction would necessarily lessen the 
 means of every individual; and let them 
 further recollect, that the lessening of in- 
 dividual means will lessen the means and 
 revenue of government. Hence the re-
 
 26 
 
 duction of dividends to the stock-holder; 
 while also the lower the price of articles, 
 the produce of the land, &c. &c. the less 
 rent to the land-holder ; the less hire to 
 the labourer ; and consequently the less 
 the means become to the stock-holder, 
 the land-owner, and the labourer, the 
 less they will have to lay out with the 
 manufacturer and mechanic. — Thus then 
 the means of all classes will be impove- 
 rished ; so that this alluring improvement 
 from paper-money to gold, would after 
 all prove a mere deception ; while the 
 consequences of the experiment would 
 no doubt prove fatal to all parties. — 
 Then again if the question be consider- 
 ed in a political point of view, as to the 
 pre-eminent station which Great Britain 
 holds in the rank of nations, no person 
 will ever contend that our paper-money 
 system has not very materially tended to 
 increase the resources of the country; 
 
 fa** rr-
 
 27 
 
 and consequently to have largely con- 
 tributed to her high rank. — Hence, if 
 this source of means be trenched upon 
 and rendered less available, that charac- 
 ter and strength will diminish in the same 
 ratio;— and hence also, a greater pro- 
 bability of being involved in war, while 
 the means of carrying it to a successful 
 issue would be materially impaired. 
 
 Admitting then the indisputable facts 
 already stated, — 
 
 That the increased expenditure and 
 consequent increased debts of 
 the principal powers of Europe 
 necessarily require a proportion- 
 ate increase of circulating me- 
 dium : 
 
 That the great depreciation of the 
 paper-money of foreign powers 
 must of necessity lead to a
 
 great sacrifice on their parts for 
 the obtainment of bullion : 
 
 That the progressive and consi- 
 derable investment of English 
 capital in foreign funds, with 
 the great farther British expend 
 diture on the Continent by 
 English residents and visitors, 
 must, together with the imports 
 from thence, create an unfa- 
 vorable balance of payments 
 against this country : 
 
 That such unfavorable balance of 
 payments must create a conse- 
 quent unfavorable state in our 
 foreign exchanges, and 
 
 That an unfavorable state of the 
 exchanges causes an export of 
 bullion and coin ; and farther, 

 
 29 
 
 though by no means the least 
 material consideration on this 
 important question, 
 
 That, while all the continental powers 
 are requiring considerable quan- 
 tities of bullion for additions to 
 their gold and silver circulation, 
 the mines producing these metals 
 are in a state of diminished and 
 uncertain production; and that 
 now in particular, by the in- 
 surrection in the Spanish colo- 
 nies, and by the state of the 
 mines, the supplies from thence 
 are become still less productive, 
 and more precarious than ever : 
 
 is it then, and at this moment too, 
 with all these obstacles, wise to discon- 
 tinue our chief prop to our paper-money 
 system, and render it less available? and 

 
 30 
 
 in this time of peace and comparative 
 state of ease, to persuade ourselves that 
 we cannot go on without a return to a 
 specie-circulation ? Surely those who so 
 earnestly advocate this measure cannot 
 be serious ; or, otherwise, they cannot 
 have sufficiently considered the subject. 
 
 It may not be amiss to remind those 
 who are now considering this question, that 
 Russia, Spain, and Portugal, have, at 
 this moment, a very considerable paper- 
 money circulation, all passing at very 
 considerable rates of discount. The pa- 
 per-money of Russia amounts to no less 
 a sum than <£ 40,000,000 sterling, and is 
 now at a discount of about 70 per cent. 
 The amounts of those of Spain and Por- 
 tugal are not known, but the discount of 
 the former is about 75 per cent, and 
 of the latter about 16 per cent. .The go- 
 vernment of Russia, seeing the necessity 

 
 31 
 
 of rescuing if possible her paper-money 
 from absolute annihilation, has very wisely 
 endeavoured for some time past to ame- 
 liorate it by the encouragement which it 
 affords to all importers of bullion, in 
 coining it for them free of all expense 
 whatever ; this encouragement, with an 
 expectation of a consequent diminution 
 in the discount of the paper-money, ne- 
 cessarily producing an amendment in her 
 foreign exchanges, has caused an im- 
 mense influx of silver ; and the new 
 coinage, that was issued in the course of 
 the year 1817> amounted to no less a sum 
 than .£8,000,000 sterling, — the Royal 
 Mint at St. Petersburgh still continuing 
 in full employ, and all this for account 
 of individuals. The State, in the attain- 
 ment of this object, being at the only 
 comparatively small expense of coining 
 the bullion which is brought to it by in- 
 dividuals, foreigners and natives.
 
 32 
 
 Another circumstance worthy of notice 
 is, that the Royal Mint at Rio de Janerio 
 is occupied in stamping all the Spanish 
 dollars it can acquire into Brazil coin, 
 with an addition of no less than 20 per 
 cent, to their standard value ; this for the 
 purpose of increasing their circulating 
 medium. 
 
 These may be considered as two im- 
 portant specimens of the competition 
 we have to contend with ; and as we 
 have confined ourselves to gold by fixing 
 our standard to that scarce article, and 
 by the limitation of silver payments to 
 forty shillings, the greater must be our 
 difficulty on that score also ; it is not the 
 object of this to discuss how far it may 
 have been politic so to have confined 
 ourselves; no more indeed than it is to 
 discuss that of the discontinuance of the
 
 S3 
 
 practice of coining for individuals as 
 formerly. 
 
 The absurdity which has been so re- 
 peatedly advanced, that an increase or 
 decrease in the issue of Bank of England 
 notes affects the state of our foreign ex- 
 changes, will it is presumed be no 
 longer entertained, since those who have 
 been of that opinion, need only refer 
 to the comparative rates of exchange 
 with the cotemporary Bank issues, from 
 the time of the restriction to the present 
 moment, in which the} r will find abun- 
 dant proof to subvert what they had 
 so confidently conceived ; but whence 
 such jealousy as to an increased issue of 
 Bank of England notes in particular ? 
 Are they, as being more secure by the 
 debt from government, the more ob- 
 noxious ? For it is observable that 
 while such jealousy is entertained against
 
 34 
 
 the issue of Bank of England notes, 
 none is ever advanced against an in- 
 creased issue of country notes, although 
 they are to a much greater amount, and 
 for them the public have no security ; 
 on the contrary, not long since, there 
 was a general complaint that there was 
 not enough of the latter in circulation, 
 and the agricultural interest was cer- 
 tainly suffering much from the want of 
 them. How can it be then, that while 
 one sort of notes, the most important in 
 amount and the least secure, is so much 
 wanted, and does so much good, that the 
 others, the least in amount and the most 
 secure, are considered to do so much 
 harm ? It will require more than human 
 wisdom to make such a case intelligible. 
 — And again, it seems to be conceived, 
 that the Directors of the Bank of Eng- 
 land can increase their issues at plea- 
 sure ; whereas, while a diminution of its 
 
 
 ■
 
 35 
 
 issues does in fact depend on the Direc- 
 tors, by a discontinuance of an accom- 
 modation to government and to the pub- 
 lic, it does not depend on them to in- 
 crease their issues : for unless government 
 or the public apply for accommodation, 
 the Directors have it not in their power 
 to augment their circulation. 
 
 Setting aside for the present all the 
 obstacles which are dependent on our 
 relations, commercial and political, with 
 foreign countries, and those too, as to 
 investment and expenditure of English 
 capital abroad, together with the dimi- 
 nished supply of, and increased general 
 demand for, gold and silver ; obstacles 
 which, in this statement, are nevertheless 
 deemed insurmountable to a return to a 
 metallic currency ; and proceeding with- 
 out these considerations to investigate 
 into the probable practical result of 
 c2 
 

 
 36 
 
 what must naturally be expected to take 
 place in the actual internal state of the 
 country, on a presumed discontinuance 
 of the Bank Restriction-Act from the 5th 
 of next July ; and this, under a pre- 
 sumed conviction, that as far as regards 
 the Bank of England notes, the Bank is 
 fully prepared to return to cash- pay- 
 ments ; the first practical material opera- 
 tion on this presumed change of system 
 will be occasioned on the part of the 
 country bankers; not arising, be it 
 observed, from any predilection or mat- 
 ter of convenience that they themselves 
 will feel for coin in preference to Bank 
 of England notes, but proceeding from 
 jwsitive necessity. 
 
 Every country bank issuing for circu- 
 lation its own notes, must constantly 
 hold a certain proportionate sum of 
 Bank of England notes, being the only
 
 37 
 
 legal tender it can offer in exchange for 
 its own local notes ; these proportions 
 of Bank of England notes so respec- 
 tively held, are to a larger or smaller 
 amount according to circumstances, de- 
 pending in part on the respective 
 amounts of their own issues, on the con- 
 fidence of the public in their respectabi- 
 lity, and on the apprehension of the 
 holders of country notes in distant parts 
 from the metropolis of taking forged 
 Bank of England notes, which they have 
 not the means of verifying on the spot. 
 The aggregate amount of the country 
 bankers' notes is presumed to be about 
 £40,000,000, and the average por- 
 tion of Bank of England notes held 
 by them may be estimated at about 
 <£5,000,000 ; in the event therefore 
 of a discontinuance of the Bank 
 Restriction-Act, this last-mentioned sum 
 of Bank of England notes must neces-
 
 38 
 
 sarily be immediately returned to the 
 Bank to be exchanged for coin ; and 
 thus this first positive practical operation 
 of exchange of notes for coin is to be 
 reckoned upon, as taking place immedi- 
 ately on the first opening of cash pay- 
 ments. The second operation of cash 
 payments will almost immediately follow 
 by the payment of the July dividends. 
 
 The removal from the Bank into distant 
 parts of the country of the .£5,000,000 
 in coin to the country bankers, is quite 
 sufficient to cause a general sensation 
 and degree of alarm ; such indeed, it is pre- 
 sumed, as would occasion a demand for a 
 considerable portion of the July dividends 
 now amounting to nearly ,£10,000,000 
 to be paid in gold; and it is by no means 
 improbable, that in the eventual state of 
 public feeling at the moment, occasioned 
 partly by the call of specie for the
 
 39 
 
 country bankers, and by the intemperate 
 discussion that may be presumed upon 
 as preceding the discontinuance of the 
 Restriction-Act, that one half at least of 
 these dividends would be called for in 
 specie ; and thus these two immediate 
 demands would amount to nearly 
 .£10,000,000. In addition to these very 
 considerable calls for specie-payments on 
 the resumption of cash issues, it will be 
 but prudent to count upon others, namely, 
 commercial acceptances to foreign bills 
 of exchange, and the payment of sub- 
 sequent dividends, which, though not 
 coming immediately for any very large 
 amounts, would notwithstanding be pro- 
 gressive, and continued to the complete 
 exhaustion of the whole of whatever the 
 Bank may have been enabled to accu- 
 mulate ; and let it always be had in mind, 
 that these demands must, for the reasons 
 already stated, be chiefly for gold coin.
 
 40 
 
 These important demands then for 
 coin in exchange for Bank of England 
 notes, must, in the proportion that they be 
 satisfied, drive the notes in general, Bank 
 of England, and country, out of circula- 
 tion ; and in the same ratio, that coin be- 
 comes more liked than notes, so, in that 
 proportion, will the Bank notes become in 
 less estimation ; and if Bank of England 
 notes, for which the public have security, 
 grow out of fashion, or become in 
 the view of the public, of less estima- 
 tion, is it to be presumed, that the 
 countr}- bankers' notes, for which the 
 public have no security, are to maintain 
 their estimation ? If the former become 
 in any manner depreciated, the latter must 
 also, and in a much greater degree. 
 
 It is a notorious fact, and one which 
 is universally admitted by those who are 
 well acquainted with the circulation of
 
 41 
 
 country notes, that if the inhabitants in 
 distant parts from the metropolis were not 
 so apprehensive of forgeries in the Bank 
 of England notes, without having the 
 means of discerning the bad from the good 
 on the spot, the country notes would never 
 have-attained the amount of circulation 
 to which they are now got ; the moment 
 therefore that the public in those dis- 
 tant parts have the option of receiving 
 coin in lieu of notes, can there be a 
 doubt as to the choice they will make ? 
 Hence, therefore, a greater demand for 
 coin, and a consequent diminution of 
 notes, which must eventually become of 
 less use; thus then, as notes grow out of 
 use, must a substitute be found, and 
 that substitute, in the event of a discon- 
 tinuance of the Restriction-Act, must be 
 gold ; and from whence is this additional 
 quantity of gold to be obtained ? If it 
 cannot be obtained, the circulating me-
 
 dium must be reduced ; and hence the 
 reduction and impoverishment of the 
 means of every individual in the king- 
 dom ; and with it, the consequent im- 
 possibility of collecting the present 
 amount of taxes, with the consequent 
 impossibility of keeping up our present 
 establishment, and of continuing the pay- 
 ment of the interest of the public debt. 
 
 If the facts and conclusions which 
 are herein stated be correct ; or indeed, 
 if they be nearly so, it follows, that it is 
 absolutely impracticable to return now or 
 soon to a metallic system of currency ; 
 and that if it were practicable, it would be 
 impolitic, inasmuch as, by the system 
 of our paper-money, we possess an unde- 
 preciated currency of our own, without 
 depending on the supply of an article of 
 foreign produce, while we have at the 
 same time, by making a proper use of it, 

 
 45 
 
 the means of drawing therefrom an ad- 
 vantage for the public in sharing the 
 profit with those who issue the paper- 
 money for circulation ; and our stock 
 and import of bullion might then be 
 more beneficially employed by allowing 
 its free export, to counteract the occa- 
 sional unfavourable state in our foreign 
 exchanges to which we must eventually 
 be exposed. 
 
 Should these views and sentiments 
 coincide with the more enlightened un- 
 derstanding of those who will have to 
 decide the question, is it not presumable 
 that they may find it expedient to make 
 the Restriction-Act co-existent with the 
 Bank charter, and in so doing, to secure 
 for the public a farther proportion of the 
 advantages that will be derivable from 
 such measure ? and farther, to take into 
 consideration how far some new law may
 
 44 
 
 be expedient for the regulation of the 
 country notes, so as, on the one hand, to 
 render them more secure for the public, 
 by proportionate investments in the funds, 
 to be placed in the hands of public trus- 
 tees ? and, on the other, to obtain for the 
 public, either by tax or otherwise, a more 
 adequate proportion of the immense ad- 
 vantages which the country bankers are 
 now deriving? Thus might this import- 
 ant question be set at rest, consistent 
 with the security and the advantage of 
 the public at large ; while this proposed 
 improvement would at the same time, 
 become popular, as it became better un- 
 derstood ; more especially if the addi- 
 tional advantages to be drawn from it 
 for the public were to be applied to the 
 reduction or the repeal of some objec- 
 tionable tax. 
 
 The most powerful and the most opu-
 
 45 
 
 lent countries have severally used their 
 utmost endeavours to establish an unde- 
 preciated paper-money currency ; France 
 and the United States of North Ame- 
 rica have failed in toto ; Russia, Spain, 
 and Portugal, have failed in certain de- 
 grees ; the paper-money of these latter 
 countries passing at enormous rates of 
 open discount, more or less according 
 to circumstances ; England alone has 
 succeeded in the attainment of this 
 great desideratum ; and now it ap- 
 pears, that no inconsiderable part of 
 the community, under the influence of 
 an erroneous understanding of the ques- 
 tion, are desirous of its annihilation ; 
 and, if not firmly resisted by the wis- 
 dom of the legislature, we shall have 
 to deplore the baneful catastrophe of 
 .this most useful and advantageous 
 substitute.
 
 46 
 
 The intimate connection between this 
 important subject and the duties of the 
 high office which are so ably discharged 
 by your Lordship, will, I hope, be consi- 
 dered a sufficient excuse for the present 
 intrusion upon your Lordship's valuable 
 time and attention. 
 
 I am, My Lord, 
 with great respect, 
 Your Lordship's 
 most obedient and 
 
 most humble servant, 
 CHARLES LYNE. 
 
 Devonshire-Place, 
 January 30th, 1819- 
 
 Marchant, Printer, 
 Ingram Court. London.