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 UNIVERSITY OF ILLINOIS 
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BANK NOTES 
 
 THE CAUSE OP THE 
 
 Disappearance of Guineas , 
 
 and or THE 
 
 COURSE OF EXCHANGE 
 
 BEING 
 
 *4G*4IJV$T US , 
 
 WHILST THE 
 
 Balance of Trade is in our Favour: 
 
 WITH 
 
 PRACTICABLE MEANS SUGGESTED 
 
 TO ENABLE 
 
 % 
 
 The Bank of England to resume its Payments in 
 Specie, without sustaining any Loss . 
 
 t( The Measures taken to keep Gold in the Country, have had the eflfeof 
 of giving a Premium for every Guinea that is taken out of it.” 
 
 O * 
 
 BY TV HOPKINS. 
 
 London, 
 
 PUBLISHED BY J. MURRAY, FLEET-STREET. 
 
 Price Four Shillings. 
 

 
 
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PREFACE. 
 
 The Writer of the following pages, feeling a 
 cumiderahle interest in the enquiry into the present 
 slate of our currency, has, for some time past, de¬ 
 voted a part of his leisure to an investigation of the 
 subject ; having committed his thoughts to writing, 
 hp is now induced to submit them to the public, and 
 whatever may be the manner in which they are 
 received, ^vhetker they .remain unnoticed in the bosom 
 of obscurity, or attract a portion of public atten¬ 
 tion , he will still retain the consolation, that his 
 
 * 
 
 - intention was good. His aim has been to exhibit 
 the principles which govern a national circulating 
 * medium—a balance of trade—and the rate of ex¬ 
 change with foreign countries—in as simple and un- 
 ambiguous a manner as possible. Believing that they 
 are subjects which will increase in interest, if in 
 the following remarks, an additional light is thrown 
 B upon them, he will be content—If they prove, in 
 any degree, instrumental in restoring the country to 
 that vigorous state, from which it is thought bank 
 notes have reduced it, he will exult in the recollec - 
 
 
 
 J ;■»-! 
 
 ±f 
 
IV 
 
 tion, that he has not written in vain.—The mighty 
 contest in which we are engaged, the greatness of 
 the prize contended for, call upon us to strain every 
 nerve to ensure success . 
 
 . • , * i 
 
 As no pretensions are made to infallibility, should 
 the writer s views be false, and his arguments erro¬ 
 neous, the style is not likely to dazzle or fascinate 
 the reader, if he has succeeded in making himself 
 understood, it is all that he aimed at—truth alone, 
 as far as he knows his oivn mind, being his object — 
 Long tables and calculations, have been avoided, that 
 the mind may be left at liberty to examine the prin¬ 
 ciples attempted to be laid down. The reasonings 
 upon the state of our commerce, do not include the 
 exports and imports for the year 1810 , the accounts 
 not having been compleated — Indeed, in the opinion 
 of the writer, we stand more in need of correct prin¬ 
 ciples, than minute returns of exports and imports 
 —that the latter are only essential, in our present 
 enquiries, as means to enable us to arrive at a know¬ 
 ledge of the former . 
 
 Salford., Manchester, 
 
 Dec . 18 , 1810 . 
 

 BANK NOTES, &c. 
 
 On a subject of such extensive importance as the 
 present, it might be expected that party politics 
 would have no effect—but experience has proved* 
 that when men have been long attached to a party, 
 they have not only imbibed its peculiar principles, 
 but also, the same manner of viewing a question, 
 the same habits of thinking and reasoning, and, by 
 constantly defending particular maxims and mea¬ 
 sures, they at last get into such a state, that they 
 act almost mechanically in their accustomed line, 
 
 « 
 
 t , is only by considering the effect, which such 
 bit has upon the mind, that we can account 
 for the uniformity of conduct observable in a sect 
 or party ; and it is for want of giving due weight 
 to the operation of this principle, that we are so 
 ready to charge those whose opinions are different 
 to our own, with being debased by that odious vice 
 hypocrisy. 
 
 B 
 
1 
 
 \ 
 
 Perhaps, there are few of us whose minds are 
 not thus tinctured, in a greater or less degree : 
 whatever we have an attachment to, we naturally 
 wish to be right, and we commonly muster up all 
 our ingenuity, to persuade ourselves that it is so ; 
 all that the most impartial can do, is to endeavour 
 to be upon their guard against such a bias, and ri¬ 
 gorously to examine every argument advanced for 
 or against the question. 
 
 / 
 
 With such feelings and views, a writer of infe¬ 
 rior abilities, may be enabled to throw an additional 
 light on an intricate question, merely from the cir¬ 
 cumstance of conducting his enquiries with caution 
 and candour. 
 
 We shall find, that measures of national policy, 
 are generally both spoken and written upon with 
 an uncommon degree of partiality, and that, in pro¬ 
 portion to the magnitude and intended permanency 
 of the measure. This being the case generally^jve 
 need not be surprised that the bank note system 
 nas been violently attacked, nor at its having 
 many enthusiastic admirers and defenders ; as it is 
 universally admitted, that its consequences are of 
 the most extensive nature, affecting materially the 
 
 well-being of society at large, and that it claims 
 
 % 
 
 and merits the attention of all in an eminent de- 
 
3 
 
 gree. Many have come forward, at different pe¬ 
 riods, as its advocates and eulogists, but none with 
 more zeal than a Right Honourable Baronet ; and, 
 from the manner in which his pamphlet has been 
 li lied by its admirers, it appears that he is consi¬ 
 dered its most able defender. 
 
 * 
 
 But, that we may have as clear a conception of 
 this important subject as we can get, let us consi¬ 
 der some of the different points separately, carry¬ 
 ing with us as much impartiality possible, and 
 then make our comparisons and draw our conclu¬ 
 sions ; if we can but go on coolly and deliberately* 
 we shall, notwithstanding the intricacy of the sub¬ 
 ject, succeed in obtaining a tolerably correct view 
 of it. 
 
 The committee appointed by the House of Com¬ 
 mons, to enquire into the causes of the present N 
 high price of bullion, have, in their report recently 
 published, given it as their opinion, that the high 
 p|PN?*of bullion, as well as the unfavourable rate 
 of exchange, is to be attributed to the excessive 
 quantity of bank notes in circulation, and that 
 making the Bank of England liable to pay their 
 notes in specie, wcfuld have the effect of diminish¬ 
 ing that excess ; they therefore recommend, that 
 
4 
 
 the Bank Restriction Bill should be repealed at the 
 end of two years. 
 
 The defenders of the bank note system, contend 
 that the bullion committee are in error—that the 
 issue of notes has no connection whatever with the 
 rate of exchange with other countries, and has not 
 caused the high price of bullion, but attribute both 
 those circumstances to the present state of trade. 
 
 According to these writers, cc the balance of 
 (t trade is so much against us, that it is taking 
 ec away our gold to pay the difference between 
 what we buy and what we sell; the former 
 “ being so much greater than the latter, that all, 
 “ or nearly all, our gold money has been sent 
 “ away, for that purpose, and yet has been in- 
 “ sufficient, as is proved by the course of ex- 
 cc change being against us.”—This is attributed to 
 various causes, the extent of whose operation it is 
 difficult correctly to ascertain ; but that we may 
 properly estimate this argument, we will proceed 
 to enquire into the nature and operation of a 
 Balance of Trade. 
 
 j 
 
Balance of Trade . 
 
 I \, ^ * • 
 
 It is evident, that superficial and very erroneous 
 notions have been, and are at present, entertained 
 on this subject. To prove this, it is only, neces¬ 
 sary to state what ii is, and then the fallacy of 
 the statements received throughout Europe will be 
 admitted. A favourable balance of trade is, when 
 one nation sells to another more goods than it buys 
 in return, and it is always supposed , that the amount 
 of the difference is received in the precious metals ; 
 it would therefore follow, that what one nation 
 
 i 
 
 gains another must lose. 
 
 But if we look at the accounts of the different 
 governments qn the continent, we shall fi id that 
 they boast of a considerable gain. Indeed, this 
 is carried so far, that it would require ten times 
 the present annual produce o the mines, to jus¬ 
 tify their lowest estimate. It is not intended by 
 this, to insinuate that a favourable balance does 
 not exist, on the contrary, it may be proved, that 
 
0 
 
 England has enjoyed it for a long time. Rat our 
 object is, to ascertain whether we can derive an^ 
 benefit from it, except under particular circum¬ 
 stances. 
 
 As it is at present contended, by some persons, 
 that the balance is against us, we will trace the ef¬ 
 fect* of such a circumstance upon a nation. Ad- 
 mitting then, for the sake of argument, that it is 
 against us, the first effect perceived, is a rise in 
 the price of bullion, it being wanted to pay the 
 difference between our exports and imports; the 
 rise in the price of bullion, causes those guineas 
 which are under the standard weight to be melted, 
 they bearing a higher price as bullion, than they 
 do while they continue in circulation as coin. Sup¬ 
 pose the balance to be against us, to the amount 
 of a million a year, and admitting our whole circu¬ 
 lating medium to have been, previously to such 
 an unfavourable balance of trade, twenty millions, 
 we shall find, that in a year we have been drained 
 of one-twentieth of our currency. But then the 
 nineteen millions which we have left, must be made 
 to perform all that the twenty millions did before, 
 every individual piece being of greater value, in 
 exact proportion to the diminution of the quan¬ 
 tity. Our metals being thus raised in value, the 
 probability is, that importations would be lessened. 
 

 7 
 
 as the overplus quantity is to be paid for, with an 
 article which is constantly increasing in value. 
 Here then, even allowing that our trade is in the 
 state described by the friends of bank notes, we 
 see, that were it not for those notes, the evil would 
 correct itself. 
 
 But as it is of much importance to have an ac- 
 
 t 
 
 curate knowledge of this subject, more especially 
 as it is so frequently confounded with the rate of 
 exchange, although they are in some cases distinct 
 from, and indeed, in direct opposition to each 
 other, it will, perhaps, be useful to take another 
 view of it, to examine it more in detail, and we 
 shall find, that an unfavourable balance of trade, 
 may even be mistaken for a benefit. 
 
 We have supposed, that England had twenty 
 millions of gold and silver for a currency ; we will 
 imagine, bread is sold for one penny per pound, 
 and that the average weekly wages of h labourer is 
 eight shillings.—England, under these circum¬ 
 stances, acquires a taste for the produce of an¬ 
 other country, which is indulged and carried to a 
 great extent ; for the sake of simplicity, we will 
 say it is for wine ; the balance of trade being even 
 before, this inordinate /age for drinking wine 
 turns it against us. so much as a million a year. 
 
 i 
 
8 
 
 Should the same course continue ten years, in that 
 time we should have lost one half of our circu¬ 
 lating medium, it being now reduced to ten mil¬ 
 lions ; but as no alteration is supposed to have 
 taken place in the country, excepting that of hav¬ 
 ing exchanged one half of our gold and silver for 
 a commodity which we could very well have done 
 without, and which we have consumed, the same 
 course of ploughing, sowing, and reaping would 
 go on, and the produce of the soil be brought to 
 market; manufacturers would produce in the 
 same way they did before, the weaver, the car¬ 
 penter, and the smith would continue their useful 
 labours ; nothing has undergone the least altera¬ 
 tion but money. They have now only one half of 
 their former quantity, with which to make their 
 different purchases ; but, as money is a mere me¬ 
 dium of exchange, they would now make that half 
 which they have left, perform all that the whole 
 twenty millions did formerly.—Our currency would 
 now be reduced to ten millious, and consequently 
 have so much raised the value of each piece, that 
 two pounds of bread would be procurable for a 
 penny, being one half the nominal price it was, 
 prior to the reduction of the quantity of money. 
 Now, as cheap provision is thought by some to 
 be an unmixed good, here we have, according to 
 the vulgar notion, cheap food as a consequence of 
 
 i 
 
9 
 
 an unfavourable trade ; this is, however, a delu¬ 
 sion, which could not last any considerable length 
 of time ; the same cause must necessarily reduce 
 the price of labour ; the labourer, it is true, might 
 find that the rise in the value of money, would 
 affect provisions rather earlier than his wages, and 
 that would be so far an advantage to him ; but 
 every thing would ultimately come down to the 
 proper price, according to the reduced quantity of 
 money. 
 
 It has been supposed, for the purpose of shew¬ 
 ing that provisions may be lowered in price, with¬ 
 out benefit accruing to any portion of the com - 
 munity, that the money of a nation can be reduced 
 to one half its accustomed quantity ; but we now 
 come, to examine the improbability of such a 
 circumstance taking place, by any state of trade, 
 while the coin is left to find its own natural value. 
 
 We have made a supposition, for the sake of 
 
 having an illustrative case, that a nation of wine 
 
 growers or wine makers, has received a million a 
 
 year of our gold id exchange for their wine ; we 
 
 will assume that they had, prior to the commen- 
 
 ** 1 / 
 
 cing of this trade, a currency of gold and silver to 
 
 the amount of 20 millions, and as ten years of 
 • c 
 
10 
 
 trade has brought them an additional sum of ten 
 millions, they now have a currency of 30 millions, 
 and as we suppose no increase of employment for 
 this extra sum, it must have been lowered in value, 
 equal to the increase in quantity, or each indi¬ 
 vidual piece of about two thirds its former worth ; 
 under these circumstances, the wine would cost 
 a greater sum every successive year ; say, that at 
 the commencement of the trade, when each nation 
 had 20 millions of specie, the wine sold for a shil¬ 
 ling a bottle in the country which produced it ; 
 but as their money is now reduced in value one 
 third, on account of its increased quantity, the 
 bottle of wine will sell for one shilling and six- » 
 pence, that sum being equal at present to one 
 shilling ten years ago. 
 
 Now, let us enquire, under what circumstances 
 we are called upon to pay this additional quantity 
 of the precious metals ; we have already seen, that 
 our currency has been reduced from 20 to 10 mil¬ 
 lions, and consequently, that each separate piece 
 had become twice its former value ; therefore, the 
 one shilling and sixpence which we have now to 
 pay for the bottle of wine, is equal to three times 
 the price we paid for it at the commencement of 
 the trade, then one eighth of a labourer’s weekly 
 
11 
 
 wages was the sum we had to pay for it, naw it 
 will require three eighths to purchase it* 
 
 Here we find a natural corrective of an unfavor¬ 
 able state of trade ; but there are other modes in 
 which nations are enabled, not to say invited, or 
 impelled, to bring their trade to a state of equi¬ 
 librium. In the case of the wine makers, we have 
 seen in what manner their money became depre¬ 
 ciated, and their wine raised in price; but the ad¬ 
 vance would not be confined to wine, every other 
 commodity with them would be equally raised by 
 the same cause, the necessaries of life would be 
 as much affected as any other articles. Agreeably 
 to these principles, corn, which with them for¬ 
 merly sold for 10 l. now costs 15/. whilst with us. 
 it has fallen from 10/. to 51. here a favourable op¬ 
 portunity presents itself to begin a new trade, by 
 purchasing this corn and taking it to the wine 
 makers, and it would most certainly have the ef¬ 
 fect of bringing back our money, while it con¬ 
 tinued so lucrative to the individual traders. It 
 must be instantly seen, that this trade in corn 
 would commence earlier than we have stated, it 
 was only represented to have been delayed, until 
 200 per cent might be gained by it, (the freight, 
 &c. being sunk in all the calculations) to exhibit 
 
12 
 
 it in a clear light, all we want to establish is, that 
 no nation can have a considerable balance of trade 
 in its favour, for a long time ; and even when the 
 means, which we have here pointed out, fail 
 in establishing an equilibrium, it will be shewn 
 hereafter, that no nation can continue to reap a 
 profit from a favourable trade, for an indefinite 
 time. If we are desirous of having a continual 
 influx of the precious metals, some means must be 
 devised to keep them out of the home market, and 
 to prevent them from increasing the quantity of 
 our currency ; if this is not done, a stop will soon 
 be put to our favourable balance. The trade of 
 England has, from time to time, brought her an 
 immense quantity, but they were never accumula¬ 
 ted in the country, they have been generally sent 
 away as subsidies to some of the continental powers, 
 from whence the favourable operation of trade 
 drew them, to be again employed in the same 
 manner. 
 
 There is, indeed, one way in which a nation 
 might be enabled to accumulate more than their 
 proportion of the precious metals, even in the 
 shape of money. That way, however, does not 
 depend upon themselves, but upon the surround¬ 
 ing nations. If their neighbours should be weak 
 
13 
 
 enough to supply, or more than supply, the place 
 of the money which had been drawn from them by 
 trade, with something else as a substitute, instead 
 of suffering it to be lessened in quantity, then, 
 indeed, it might go on draining them, until they 
 had not a piece of gold left ; this, however, brings 
 us to a consideration of the nature and effects of 
 an issue of bank notes. 
 
Bank Notes. 
 
 
 
 i Nipiij 
 
 A s paper does not require a voyage to America, 
 nor the labour and expence of working a mine to 
 procure it, it is not very surprising that when once 
 used as a substitute for money, it should be carried 
 to so great an excess, as almost wholly to supplant 
 the metals ; this appears to have been its career 
 in nearly every nation that has had recourse to it ; 
 intending only to make use of it, as a remedy for 
 a present evil, they soon found that it was far 
 easier to introduce, than to get rid of it, when it 
 had been introduced : the emission of a small 
 quantity of notes, led the way to an excessive 
 issue, until they at last sunk under their own 
 weight; that this has been the general fate of 
 paper, as a substitute for money, the history of 
 many modern states will sufficiently prove, and 
 that it is its natural tendency, a few considerations 
 will clearly shew. 
 
 \ 
 
 It is not attempted to be maintained, that no 
 circumstances will justify an issue of paper, and 
 
15 
 
 even making that paper legal money ; but, we 
 may truly say, that it is a desperate expedient, re¬ 
 quiring more fortitude to eradicate the evils it oc¬ 
 casions, than commonly falls to the lot of govern¬ 
 ments ; the necessity should be of the most im¬ 
 perious kind, before recourse is had to such a 
 measure. 
 
 / 
 
 Such as being attacked by a powerful enemy, 
 whom you are incapable of resisting, and therefore 
 require the assistance of another nation—here it 
 might and would be good policy, to send away a 
 great part of your metallic money to purchase as¬ 
 sistance, and you would be justified in issuing 
 paper, to an extent that would nearly fill the va¬ 
 cuity, because, a great part of your specie leaving 
 the country, would so materially affect the nature 
 of all contracts, that much confusion and distress 
 would ensue ; whereas, by a moderate issue of 
 paper to supply the place of the metals, you would 
 be enabled to preserve the spirit as well as the let¬ 
 ter of all engagements, while, by keeping the 
 paper within a proper limit, you may gradually 
 recover the metals which had been sent away; 
 this, to a manufacturing and commercial nation, 
 would be the more easy, as they have the ready 
 means of drawing back their specie. But the great 
 difficulty is, in regulating the issue so as to keep the 
 
16 
 
 quantity of currency a little below what is required 
 by the country, and this is what has not been suf¬ 
 ficiently attended to, by those who have had the 
 controul placed in their hands; the convenience 
 of the moment generally operating stronger upon 
 their minds, than the dread of the more distant 
 but certain evil of an excessive issue.—Yet, it is 
 clear, that a wise and firm government might 
 adopt such an expedient, and gradually recover 
 from the exhausted state, the paper being taken 
 out of circulation as the gold flowed back into the 
 country. But it is equally certain, that very few 
 would have sufficient firmness to do it with a steady 
 persevering detrrmination ; it ought never to be 
 had recourse to but for a temporary purpose.—A 
 paper issue is a.convulsive effort, which leaves be¬ 
 hind it a national weakness, from which, by wis¬ 
 dom and fortitude, it may be recovered, but it 
 requires a great exertion of those virtues to accom¬ 
 plish it. 
 
 / 
 
 Having thus laid down the principles, upon 
 which alone a paper money ought to be issued, let 
 us proceed to examine, how far those principles 
 have been adhered to, by the makers of bank notes 
 in this country. 
 
 Bank notes were first circulated in England by 
 
17 
 
 a company of merchants, who were incorporated 
 by William III. shortly after the famous revolu¬ 
 tion, which placed that monarch on the throne, 
 and although the amount was comparatively small 
 at that period, and for a considerable time after, 
 yet then, small as was their quantity, they must 
 have had the effect of keeping gold out of the 
 country ;—for if we suppose trade to have in¬ 
 creased, and consequently required a greater cir¬ 
 culating medium, they did the negative injury of 
 supplying that demand with paper, which, but for 
 that supply, would have brought gold and silver in 
 sufficient quantity to answer every purpose; it 
 being the very nature of trade to supply itself with 
 a currency, and nothing but glutting it with paper, 
 can prevent it from drawing the precious metals 
 to the place where it is carried on. Thus capital 
 cities, and large commercial and manufacturing 
 towns, will always have a greater proportion of the 
 currency of a country, than the lesser provincial 
 towns, and those, more than the villages, accord¬ 
 ing to the relative number and amount of purchases 
 made. So that, even at the first issue of notes by 
 the bank of England, if trade had increased, gold 
 was thereby prevented from flowing into the coun¬ 
 try ; and if we suppose that it had not increased, 
 then as the currency had been augmented, without 
 
 there being any additional employment for it, a 
 
 & 
 
18 
 
 part of it would leave the country, and as we know 
 that part would not be bank notes, it follows, that 
 a portion of our gold would be banished and its 
 place supplied with paper. Allowing this to be 
 true at the first emission, it will equally apply to 
 every successive issue ; and if the possession of an 
 abundance of gold and silver is to be considered a 
 good , the circulation of bank notes, though con¬ 
 vertible into cash at the pleasure of the holder, is 
 an evil. 
 
 This evil, however, although it is one of no 
 trivial nature, was not felt by an individual in any 
 material degree. The farmer, when he took his 
 corn to market, received payment in bank notes, 
 and as his landlord was content to have his rent 
 paid in the same kind of money, a general confi¬ 
 dence in the bank was established ; they gave caslr 
 for their notes, to any person who was desirous of 
 having it, and while things went on in this way, 
 the nation might be considered weaker, (as there 
 was less gold and silver in the country than there 
 ought to be, its riches and its trade considered) 
 but each felt, that as an individual, he was not par¬ 
 ticularly affected ; paper was as useful to him as 
 gold, and they were therefore taken indiscriminately; 
 but when once a bank was established, and its 
 notes circulated, it occurred to the merchant and 
 
19 
 
 the manufacturer, that, instead of spending years 
 of anxiety in assiduously attending to their old 
 regular professions, in order to accumulate an in¬ 
 dependency, it would be a much readier way to 
 become bankers, and issue their promissory notes ; 
 and when the public had accepted them as, or 
 rather, instead of money, the accommodation 
 which they could give the speculator, soon made 
 banking a flourishing trade—they increased ra¬ 
 pidly in number, and the circulation of their notes 
 was forced by the most artificial means, adding 
 greatly to the evil already produced by bank of 
 England notes. 
 
 Thus we find the disease increasing in strength, 
 and spreading far and wide ;—exposing the whole 
 of the trade of the country to a shock without any 
 adequate necessity ;—the gold driven out of cir¬ 
 culation, and paper introduced into its place, the 
 value of which depended entirely upon public con¬ 
 fidence. Can this be wise ? can it be prudent ? 
 confidence may be unbounded, may continue so 
 for some time, but it is contrary to the nature - of 
 things, that it should remain long unshaken. The 
 general effect of unbounded confidence is, to pro¬ 
 duce a relaxation of that cautious attention, which 
 is essential to the prosperity, nay, almost to the 
 existence of trade.—And it were surely absurd, to 
 
 r 
 
20 
 
 contend that that which causes the trader to be less 
 circumspect in his engagements, to be more ad¬ 
 venturous in his speculations, should produce, at 
 the same time, a greater degree of confidence in 
 the minds of the community at large. Confidence, 
 like many other things, may be carried to a great 
 extent; but it may be laid down as a general rule, 
 that the more absolute the confidence, the more 
 liable is it to be suddenly destroyed,—this applies 
 with peculiar force to that which is reposed in per¬ 
 sons, whose claims to it there is no precise mode 
 of examining, yet who have a general confidence 
 reposed in them by the public. Such persons are 
 not subjected to any scrutiny : they make use of 
 what is called their credit, frequently to its utmost 
 extent, imagining that their capital has increased, 
 because they are entrusted to a great amount, they 
 frequently embark the whole property in trade, 
 when, any disastrous accident, any imprudent or 
 unfortunate speculation at once dissipates the de¬ 
 lusion, and the public awaking from their dream 
 of confidence are inclined to rush into the opposite 
 extreme, and are only deterred from acting up to 
 the dictates of general suspicion, by the impossi¬ 
 bility of taking trade immediately into new chan¬ 
 nels, they are therefore obliged to continue partly 
 in the same track ; but we find, that when public 
 confidence is once, touched, its effects are felt for a 
 
21 
 
 long time afterwards ; men whose property is in the 
 hands of others, endeavour to get it back as soon 
 as they can, and are very cautious how they again 
 part with it. 
 
 i 
 
 This was the way in which credit was affected 
 prior to the memorable stoppage of payment at the 
 bank of England, in the year 1797* The issuing 
 of notes had caused the gold to flow out ol the 
 country, and had collected an immense property 
 into the hands of the persons who issued them ; 
 with this, they, or at least some of them, made 
 very free, in speculating or trading in an adven¬ 
 turous manner, and an alarm prevailing at the same 
 time, respecting invasion, a more than ordinary de¬ 
 mand for gold took place, which proved that some 
 of the bankers were unable to pay their notes ; the 
 moment which gave birth to suspicion laid the train 
 for further exposure ;—those who had notes en¬ 
 deavoured to get gold and silver for them ; the 
 country banks, in general, had but a small quan¬ 
 tity, when compared to their notes in circulation ; 
 they, therefore, as well as the rest of the public, 
 applied to the bank of England, and it *oon be¬ 
 came evident that they also were unable to answer 
 the general and increasing demand ; it was then 
 that the effects of banishing the gold were felt— 
 it was then the nation stood appalled at the preci- 
 
22 
 
 pice, on which, apparently for the first time, it 
 saw itself placed ; it was, truly, a critical moment, 
 requiring an uncommon display of wisdom and for¬ 
 titude.—But, alas ! the event proved that they 
 were not to be found; or at least, not in those 
 whose influence prevailed at that period. There 
 were, indeed, many who had marked the increase 
 of bank notes with regret, and who hailed this de¬ 
 sire on the part of the people, to have gold in pre¬ 
 ference to paper, as an auspicious omen :—They 
 saw that the pernicious effects of the paper system 
 were felt, and were in hopes, that it was now dying 
 a natural death ; involving, it is true, thousands 
 in misery at its exit. Yet a consolatory reflec¬ 
 tion arose, out of even that circumstance, as it 
 was certain, that the longer it existed, the greater 
 must he the misery endured, when it scattered de¬ 
 struction around in its last convulsive pangs. 
 
 Not so reasoned those who had the management 
 of the important concerns of the nation ;—they 
 either had not the courage to let the paper sink to 
 that rank from which it ought never to have risen, 
 or they believed, that a future and better time 
 might be selected for the purpose;—they either 
 did not see the state into which they were plung¬ 
 ing their country, or they affected not to see it. 
 Views the most fallacious were taken of the sub- 
 
23 
 
 ject, supported by arguments^ so weak, that It is 
 surprising they stood a moment’s investigation, 
 Mr. Pitt, however, supported by a triumphant 
 majority, got an act of parliament to support and 
 perpetuate the paper, in a more odious shape than 
 it had yet appeared. Yes, it was Mr. Pitt and his 
 associates who, at that awful period, were found 
 wanting.—It was he who made bank notes, to all 
 practical purposes, a paper money, by the act called 
 the Bank Restriction Bill, 
 
 By this law, the Bank of England were pro¬ 
 tected, in their refusal to p3y their promissory notes; 
 and since that time, all the evils, which naturally 
 belong to a paper currency, have been increasing. 
 From that time, the bank paid one promissory 
 note with another promissory note—the second 
 with a third—in short, they have continued ever 
 since, to pay with renewed promises: and what is 
 more surprising is, that although their notes, which 
 they cannot be compelled to pay but with other 
 similar notes, have been made as near legal money 
 as is possible, without being actually so ; yet has 
 the bank been left at full, compleat, and uncon- 
 trouled liberty, to issue as great a quantity as they 
 in their discretion think fit. 
 
 Can any thing be more extraordinary than this 
 
24 
 
 —except, perhaps, the principle upon which it 
 has been lately asserted, from the best authority, 
 that the bank regulates its issue—namely, the 
 wants of persons possessing real bona fide pro¬ 
 perty. 
 
 But let us pause for a short time, to examine 
 the reasons, or rather the excuses, for passing the 
 Restriction Bill, much was said at the time about 
 the gold going out of the country—and nearly 
 every cause, except the real one, was assigned for 
 its disappearance. 
 
 The minister, however, asserted, and the bank 
 agreed, that payment in gold and silver must be 
 discontinued, or we should have no gold left.— 
 Was any thing so preposterous as this, ever said 
 before ?—So then, to keep the gold in the country, 
 we cease to make any use of it.—This, to be sure, 
 was a most brilliant thought! Our gold was to 
 be kept in the iron chests or strong cellars of the 
 bank, while our neighbours w T ere silly enough to 
 suffer theirs to be in common circulation. What 
 a profound knowledge of political economy was 
 here displayed ! ! It is difficult to avoid believing^ 
 that the persons who projected this measure, must 
 have seen its real tendency. Even Adam Smith, 
 who is so great an advocate for banks and bank 
 
25 
 
 notes, says, that the paper money sets the gold 
 and silver at liberty to go abroad, to be used as a 
 trading capital.—What would he have said to an 
 issue of paper for the purpose of keeping gold in 
 the country ? This able economist points out in a 
 clear manner, how a capital may be created to send 
 to other countries, for the purpose of purchasing 
 provisions, clothing, tools, &c. and this might be 
 in some degree excusable in a poor nation, which 
 had nothing else to send, and was in want of those 
 articles ;—but for a rich, manufacturing and com¬ 
 mercial people to do this, would be, besides leav¬ 
 ing themselves without their proper quantity of 
 gold and silver, sending their money to rival their 
 goods in a foreign maiket, and thus partially 
 checking the sale of their own products; however, 
 though it is evident that the ^ank Restriction Bill, 
 by encouraging the issuing of notes, must cause 
 the precious metals to leave the country ; yet this 
 bill was in reality passed, for the ostensible purpose 
 of keeping them in it. Well, let us see how it has 
 answered its professed purpose.—As soon as the 
 bank were authorised by law to refuse paying their 
 promissory notes, a greater number were issued 
 than before that event; the quantity being increased, 
 
 9 
 
 they were circulated at a greater distance, uhich. 
 gave a prospect of success to those unfortu¬ 
 nate beings, who have, at different times, ex- 
 
 £ 
 
26 
 
 plated the crime of forgery, with their lives : bank 
 of England notes were forged at different times, 
 and passed in those parts of the country distant 
 from London ;—the persons who took them were 
 losers to their amount, and not having any means 
 of distinguishing a real bank note from a forged 
 one, they were taken with hesitation and reluc¬ 
 tance, This proved favourable to the issuers of 
 country notes, each of these being confined to a 
 small district, the opportunity for successfully 
 forging them was not so great ; the consequence 
 has been, that country bank notes were preferred 
 to those belonging to the bank of England, 
 throughout a considerable part of the country. 
 Indeed, it has been lately stated, that to such an 
 extent has the issuing of country bank notes been 
 carried, that they at present amount to the enor¬ 
 mous sum of thirty millions, the bank of England 
 
 having only about twenty millions in circulation. 
 
 / 
 
 Well, then, this is what experience shews to be 
 the result of the Bank Restriction Bill, in thirteen 
 years after its passing, the quantity of notes in 
 circulation amounts to fifty millions, and mi¬ 
 nisters declared, no very long time since, that 
 they who have ninety millions passing through 
 their hands in a year, could not get gold enough 
 to enable them to send a small army to the north 
 
27 
 
 of Germany !!! Whilst individuals feel an interest 
 in giving a pi ice above that fixed by law for 
 guineas, for tire purpose of sending them to our 
 enemies on the continent— yes : the measures taken 
 to keep gold in the country , have had the effect of 
 giving a premium for every guinea that is taken out 
 of it !!! It is notorious, that the bank have not 
 been able to collect any great quantity of gold, 
 and were they to be now compelled to pay their 
 promissory notes in coin, they would do it at the 
 loss of at least fifteen per cent, and every year ap¬ 
 pears to make the case worse—indeed, while there 
 is such a profit to be made, by either melting or 
 exporting it, there will always be found Christians 
 enough to set the law at defiance, and no person 
 will suspect a Jew of being deterred by any scru¬ 
 ples of conscience. And yet, after all this, there 
 are persons who say. that the Bank Restriction 
 Bill was a wise and wholesome measure—who can 
 see no injury resulting from it—and who wish it 
 to continue in existence, that our gold may not 
 be taken away !! I 
 
 Having thus seen how far the measure of 1797 
 has kept the gold m the country, we will proceed 
 to examine, in a summary way, whether our cur¬ 
 rency is not lowered in value in consequence of 
 the abundance of bank notes. 
 
28 
 
 We have already clearly ascertained, that in¬ 
 creasing the quantity of the circulating medium, 
 diminishes its value ; we have, also, had it admits 
 ted, that there are 50 millions of bank notes in 
 circulation—yet some have pretended to maintain, 
 that they are not depreciated. The manner in 
 which they endeavour to prove this is singularly 
 weak.—They say, that bank notes to the amount 
 of 105/. will procure as much corn, in the market, 
 as 100 guineas, and consequently, they are not de¬ 
 preciated. Now, admitting that this statement is 
 correct—that you would not be able to get more 
 corn for 105/. in guineas, than in notes—what 
 does it prove ?—but that the guineas are depre¬ 
 ciated as well as the notes. The complaint is not 
 merely that the notes are depreciated—but that the 
 currency—every part of the whole circulating me¬ 
 dium, , is lowered in value; the note, the guinea, 
 the shilling, and the penny, while they are consi¬ 
 dered a part of the currency, are all depreciated ; 
 therefore, this triumphant proof amounts to this, 
 that one part of the currency is not depreciated, 
 because—what ? — why, because it is not more so 
 than another part ! And this is the reply to those 
 who contend that the currency is debased, by the 
 issue of 50 millions of paper. The fact is, the 
 comparison which is made between the 105/, in 
 notes and the 100 guineas, does not apply to the 
 
29 
 
 case ; the guineas, where there are any left in cir¬ 
 culation, are linked to the notes by the strong 
 chain of the law, and as the notes are increased in 
 quantity, the guinea, while a part of the circulat¬ 
 ing medium, will be debased with them ; this, 
 however, will increase the inducement to melt or 
 export them, which will certainly be done, until 
 guineas entirely disappear from circulation ; or else 
 the practice of selling them, for more than their 
 legal price, will become so universal, that it will 
 be impossible to punish those who are guilty of it. 
 Then notes alone will be depreciated—-then it will 
 be so evident, that every child will know it—-but 
 the depreciation of the whole currency is not less 
 real at present. Every proof which the case ad¬ 
 mits of, can be clearly made to apply to our state 
 —the rise of bullion—the advanced price of every 
 article of necessity—the rate of exchange with fo¬ 
 reign countries—and by a calculation of the ne¬ 
 cessary result of so great an issue of notes. 
 
 .. • < * if 
 
 : \ t : 
 
 f 
 
Balance of Trade in our Favour. 
 
 As the high price of bullion and the unfavour- 
 able course of exchange, may be produced by an¬ 
 other cause* namely* the balance of trade being 
 against us, the admirers and supporters of paper* 
 rather than acknowledge the baneful effects of 
 their favourite system* have not scrupled to de- 
 clai e* that the balance of trade is against us !— 
 Yes, those men who have told us* that our trade 
 was going on in so prosperous and beneficial a way* 
 now* all at once, declare that the balance is against 
 ns ! In the city of London* in that place where it 
 has been so often boasted* that we had the trade 
 of the world !—where it has been frequently as¬ 
 serted, that the extension of our trade, more than 
 compensated us for the victories of France !—Yes* 
 in that same place* is our boasted trade now declared 
 to be a losing one ! Is it come to this at last ? We 
 
 o 
 
 hug ourselves upon our good fortune—we exult- 
 
31 
 
 ingly tell the world, that in the last thirteen years, 
 our exports have increased from 30 to 50 millions 
 a year—and yet, the balance is against us !!! Sure¬ 
 ly, the defenders of paper are much embarrassed to 
 find arguments to support their cause, or they 
 would never have made so humiliating a confes¬ 
 sion. What! after having for years sighed and 
 struggled, and struggled and sighed for trade ; af¬ 
 ter telling one another that all we wanted was more 
 trade ! more trade !—Must we at last acknow¬ 
 ledge, that, now when we have more than we ever 
 had, it is taking our money from us, and convey¬ 
 ing it to Bonaparte, who, poor unfortunate wretch, 
 is almost without trade of any kind ?—If all this is 
 true, who will be so great an enemy to his country, 
 as to wish for a further extension of trade ?—We 
 send away 20 millions worth more of goods now, 
 than we did in 1797 * and yet, trade is taking our 
 money from us! 
 
 But here let us pause and look about us, and 
 see whether it is not possible to defend these trad¬ 
 ers, against the attack which they have made upon 
 themselves. By the custom house returns, it ap¬ 
 pears that in 1792 , previous to the commencement 
 of the revolutionary war, our exports were nearly 
 25 millions, and our imports nearly £0 millions. 
 
/ 
 
 32 
 
 1797 * exports 29 millions, imports 21 millions. 
 
 I8O9, exports 50 millions, imports 36 millions. 
 
 Now, although these returns cannot be depended 
 upon, as giving the exact value of the exports and 
 imports, yet, as they have a uniform mode of mak¬ 
 ing them, we may see the proportion which one 
 bears to the other.—According to these returns, 
 there was in 1792, a balance of about five millions in 
 our favor ; —in 1797, it was eight millions ; and in 
 the year IS 09 , it was so much as fourteen millions, 
 I repeat, that these accounts cannot be relied upon, 
 as giving the exact value of the articles;—yet 
 there are few persons who will venture to deny 
 that we had a real balance of trade in our favour 
 in 179^5 when the custom house returns made it 
 five millions : if that was not the case, we should 
 have been unable to subsidize to the extent which 
 we have, since that period ; indeed, it must be 
 very apparent, that, had not the balance of trade 
 been in our favor, constantly and regularly from 
 that time, we could not have sent such immense 
 sums to the continent. 
 
 Now, as we had a favourable trade, when our 
 returns gave us only a balance of five millions, it 
 would be very strange if it was in reality a losing 
 one, when returns, made out in the same manner, 
 say that the balance in our favour is fourteen mil- 
 
33 
 
 lions. But, as the custom house returns do not 
 serve their purpose, a variety of causes are pointed 
 out, tending to disprove their truth, and establish 
 the fact of the balance being against us. The 
 principal appears to be, the decrees issued by Bona¬ 
 parte, and our orders in council.—There are many 
 subordinate ones named, but as these are the prin¬ 
 cipal, we will bestow some attention upon them. 
 But here again I repeat, why may we not appeal 
 to the accounts of the quantity of goods sent off? 
 when there are such accounts regularly kept, they 
 appear to me to be decisive of the case :—but this 
 being felt, it is urged, that although they are 
 shipped off, they are not sold.—Indeed ! and are 
 we expected to believe, that our mercantile men 
 are such blockheads, as to continue sending out 
 immense quantities of goods, if they could not 
 sell them ?—We have been told the same thing 
 for many years past.—One port after another has 
 been closed against us, and decree after decree 
 promulgated—yet goods have been, and continue 
 to be sent off, in as great quantities as ever they 
 were. And are we to believe, that the merchant 
 does this at a loss, that he sends his goods out 
 without any rational prospect ot selling them ? 
 We may safely leave that consideration to those 
 
 who are personally interested. 
 
 * 
 
34 
 
 But, “The continent of Europe does not con¬ 
 sume as much foreign produce now, as it formerly 
 did."—This may be safely admitted, and yet our 
 trade with it have increased. Until very lately, 
 many of the powers on the continent had colonies 
 of their own, and from those they were amply 
 supplied : this was particularly the case with West 
 India produce. But now, whatever portion they 
 receive, comes from us, so that, although they 
 may not consume so much as they were formerly 
 accustomed to do, yet as they supplied themselves 
 before, and receive their diminished supply from 
 us at present, our trade with them may be, nay, it 
 is certain, that in West India produce it is, greater 
 now than it was in 1792 —and it is notorious, 
 that the quantity of cotton manufactured goods 
 exported last year, was unusually great.—Why 
 then, with these reasons for believing that our 
 export trade is In a flourishing state, should we 
 think, in opposition to the custom house re¬ 
 turns, that the balance is not in our favour ? Be¬ 
 sides, the measures taken to prevent the admis¬ 
 sion of British goods to the Continent, have the 
 effect of diminishing our importation of Conti¬ 
 nental articles ; that this is the case, is clearly in¬ 
 dicated by the price of those articles.—The price 
 being high, causes a less quantity to be consumed, 
 and holds out encouragement to those who may be 
 
35 
 
 inclined to provide us with a substitute of our own 
 production. It is thus, that the high price of 
 Swedish iron, encourages a search for the best 
 veins of our own island, and induces many to use 
 native iron for different purposes, although it may 
 not be quite so good.—The timber and tallow of 
 the North of Europe becoming dear, makes us fly 
 to Canada for timber, because we can get it cheap¬ 
 er ; as a substitute for tallow, our fisheries supply 
 us with oil.—Indeed, as soon as any of the articles 
 which we get from the Continent, become dear, 
 we can immediately supply ourselves from another 
 source, which, of course, lessens importation from 
 Europe. But colonial produce, although not ne¬ 
 cessary to human existence, has been so long en¬ 
 joyed by the inhabitants of the European Conti¬ 
 nent. that thev cannot divest themselves of their 
 strong attachment to it, and it will be purchased, 
 though at very high prices ; sugar and coffee, in 
 particular, must be in great request—and this has 
 induced many to endeavour to provide substitutes 
 for those articles, but hitherto all attempts have 
 failed. In short, Great Britain, by having the 
 command of the sea, by being in possession of 
 nearly all the colonies that have belonged to Eu¬ 
 rope, and by having an enemy to contend with, 
 whose people are willing to purchase the produce 
 of those colonies, at almost any price—Great Bri- 
 
36 
 
 tain, I say, is so favourably circumstanced to com¬ 
 mand a trade, that it would be truly astonishing if 
 the balance were not in her favour. When, in 
 addition to these considerations, we take into the 
 account the ingenuity, the skill and industry of her 
 inhabitants, and their great capital, we shall be 
 ready to agree with our custom house returns, so 
 far as to say, that the balance of trade must be in 
 our favour. Indeed, that would be not only ge¬ 
 nerally admitted, but loudly and exultingly asserted, 
 by those very persons who now deny it, were it not 
 that two facts stare them in the face, and feel¬ 
 ing themselves obliged to assign some cause for 
 them, and either unable or unwilling to attribute 
 them to anv other, have endeavoured to make it 
 appear, that the balance of trade was against us. 
 These facts, namely, the high price of bullion and 
 the unfavourable rate of exchange, we will endea¬ 
 vour to trace to their source, and see if we cannot 
 discover some other completely adequate cause. 
 
 
PRICE OF BULLION 
 
 And course of Exchange. 
 
 SO* 
 
 We have already proved that increasing the 
 quantity of money, when there was no greater 
 number of purchases to be made, would only have 
 the effect of diminishing its value. 
 
 i 
 
 We have also seen, that England has a paper 
 circulation of fifty millions, and that land, labour, 
 provisions, &c. have accordingly risen in price ; 
 under such circumstances, bullion being a market¬ 
 able article, which when sold, is paid for in the 
 depreciated currency, must rise in price, as well 
 
 as every other commodity ; or, to speak more 
 
 - 
 
 correctly, will sell for a greater quantity of the 
 current money, because that money is of less value. 
 —thus, say a pound weight of sterling gold was 
 worth 4ft/ 14.9. 6d. before the excessive issue of 
 paper, but in consequence of that issue, it requires 
 56/. of the present money to purchase the same 
 
38 
 
 quantity—in this way does bullion rise in price, 
 when the balance of trade has nothing to do with 
 itj and were another fifty millions of paper to be 
 thrown into circulation, while trade continued in 
 its present state, the market price of bullion must 
 be proportionately raised. 
 
 Having shewn the cause of the rise in bullion, 
 let us proceed to trace the manner in which the 
 gold coin, is driven out of- the country, by bank 
 notes, while the balance of trade is decidedly in 
 our favor :—to do this, w r e will suppose that we 
 had, a short time since, twenty millions of gold 
 and silver for a circulating medium, and that our 
 trade increased so much, as to require another 
 fifteen to be added to it ; but instead of leaving to 
 the operation of trade, the task of collecting from 
 the rest of the world this additional quantity, we 
 issued paper to the amount of fifty millions, we 
 should then have a mixed currency of metals and 
 paper, to the amount of seventy millions, our 
 wants at the same time only requiring thirty-five. 
 Here the increase in quantity, according to the 
 principles already laid down, would decrease the 
 value fifty per cent—or, a guinea, while forming 
 a part of the currency, would only procure one 
 half the quantity of goods it formerly did. 
 
39 
 
 Under these circumstances, a bill is drawn at 
 Hamburgh, payable in London for 1000/. and 
 offered for sale in the Hamburgh market:—the 
 merchant who buys this bill, is desirous of making 
 a purchase in London, and wants it for that pur¬ 
 pose ; we will say, that he wishes to buy bullion, 
 he considers how much of that article the bill will 
 procure, and gives a greater or less price accord¬ 
 ingly. In the supposition which we have made, 
 it will be perceived, that from the depreciation of 
 the currency, bullion must have risen fifty per 
 cent. ; and therefore the bill will only be able to 
 buy as much as one for 500/. would before the 
 depreciation. The merchant will, therefore, only 
 give that sum for it ; the nominal amount of the 
 bill is, comparatively, of no moment, the only 
 point is, how much of any article it will pur¬ 
 chase. 
 
 But if a person in England had collected 4/7 
 guineas, and smuggled them to Hamburgh, the 
 holder of the bill would willingly exchange it for 
 those guineas, so that, according to the case 
 which we have here taken, by collecting 477 
 guineas, and conveying them to a foreign market, 
 a bill may be purchased which will procure 1000/. 
 of the current money of the country. 
 
I 
 
 40 
 
 We will presently proceed to ascertain, why 
 English bills are not more lowered in value, in 
 foreign markets, when the real state of our cur¬ 
 rency is so near that which we have supposed ;— 
 but we have seen, how the metallic money may 
 leave a nation, although the balance of trade may 
 have nothing to do with it. We will, however, 
 first examine the nature of bills of exchange, and 
 the principle upon which they are drawn. 
 
 The trading part of every commercial nation, 
 have tables, of the relative value of current money, 
 
 - in all the different countries to which their deal¬ 
 ings extend, founded upon the quantity and fine¬ 
 ness of metal in the coin, and, when a bill of 
 exchange is drawn, the sum is generally expressed 
 in the current coin of the place in which it is to be 
 paid. 
 
 An American, for instance, has a claim upon a 
 London merchant, to the amount of 1000 dollars ; 
 upon looking at his table he finds that 215/. 12s. 6d . 
 in English money, is equal to 1000 dollars, and 
 he accordingly draws a bill to that amount ; this 
 bill will sell for a greater or less quantity of dollars 
 in the American market, according to the tempo¬ 
 rary rise or fall in the value of the currency, in 
 which it is to be paid ; should English money be 
 
 i 
 
 J 
 
41 
 
 lessened in quantity and increased in value, the 
 American bill rises in its price ; but should its in¬ 
 crease have caused it to be depreciated, the bill is 
 thereby proportionably lowered ; for, we must keep 
 in mind, that although the amount is expressed in 
 money, yet its real value is determined by the 
 goods which it will purchase. Suppose the bill 
 for 215/. 12s. 6d. to be offered for sale at New 
 
 York, and that there is a merchant who has 1000 
 
 * 
 
 dollars, with which he is desirous of purchasing 
 goods in England ; if the bill will procure as many 
 goods as the dollars would when taken there, 
 then the exchange is said to be at par, and the 
 1000 dollars are the value of the bill : if it will 
 procure more, it bears a premium, or sells for 
 more than 1000 dollars, and then the course of 
 exchange is said to be against America and in fa¬ 
 vour of England ; but if it will not procure an 
 equal quantity of goods, then it is at a discount, 
 and the exchange is against us. 
 
 * , K 
 
 * 
 
 What is here supposed, relative to America, will 
 equally apply to any other nation. A bill of ex¬ 
 change is at a greater or less price, according to 
 the number of bills drawn, and the value of the 
 currency in which it is to be paid. 
 
 It has been already shewn, from the official aC~ 
 
 6 
 
42 
 
 counts of the exports and imports, that we had a 
 balance of trade in our favour of 14 millions, in 
 the year 1809; and, it is stated in the same do¬ 
 cuments, that with Europe alone it amounted to 
 seven millions. We have seen, that, from an ex¬ 
 amination of the peculiar state of our foreign con¬ 
 nections, there was a great probability of the cus¬ 
 tom house returns being correct. We have, also, 
 traced the disappearance of gold coin, and the un¬ 
 favourable course of exchange to one cause, name¬ 
 ly, the depreciated state of our currency. The 
 readers attention is particularly requested, whilst 
 we attempt to ascertain how the balance is disposed 
 of, which it is contended we have in our favour.— 
 In doing this, we shall lay down a general principle, 
 which will, perhaps enable us to reconcile the re¬ 
 gular returns of the custom house, with the actual 
 state of things, and render it quite unnecessary, for 
 the future, to have recourse to a thousand absurd 
 conjectures and false statements; for the purpose 
 of refuting plain facts, such as official returns of 
 exports and imports; we shall, at the same time, 
 see that bank notes are our only bane, that they 
 oblige us to sacrifice the advantages arising from a 
 most prosperous state of trade.—We must keep in 
 mind, that a balance of trade is the result of the 
 operation of buying and selling, and if we sell more 
 than we buy, we may, with the strictest propriety 
 
43 
 
 say* that there is a balance in our favour; and though 
 we have other evils to contend with, which our 
 trade cannot overcome, yet it diminishes them to 
 a cdnsiderable extent; the inconvenience which is 
 felt, ought to be attributed to the real cause, that 
 we may be able to appreciate every thing correctly. 
 
 In order to shew that the balance of trade is in 
 our favour, notwithstanding the course of ex¬ 
 change, with the Continent of Europe, is known 
 to be so much against us as 15 or 16 per cent, we 
 will take our former supposition, that we have a 
 currency amounting to 70 millions, when 35 is our 
 natural quantity ; where it was shewn, that a bill 
 drawn upon the Continent, payable in England, of 
 1000/. would only sell for 500/. and of course, the 
 rate of exchange 50 per cent against us, and were 
 there no other cause operating to alter it, 500/. 
 would be the value of the bill.—But we now come, 
 to have a view of the seven millions which trade 
 has placed at our disposal : it is generally thought, 
 that wherever a balance exists, it must be brought 
 to the country in the precious metdls, and indeed, 
 that is its first effect, that is the first direction 
 which it takes; but it will be perceived, from what 
 has been said, respecting the increase of the pre¬ 
 cious metals lowering their value, that this, if con¬ 
 tinued, would reduce their price.—With double 
 
44 
 
 our natural quantity of currency, we have seen 
 that bullion must be at 7l. 15s. gd . instead of 
 3/. 17s. 10 \d. per ounce; but this influx from 
 other countries making it cheaper, the merchant, 
 instead of importing more bullion, would purchase 
 bills upon England, until they were raised in price ; 
 in this manner would the seven millions be dis¬ 
 posed of, alternately buying bills or importing bul¬ 
 lion, until the former is raised in the foreign and 
 the latter reduced in the home market; the price 
 of both would be ultimately fixed at that point, 
 where the expenditure of the whole seven millions 
 placed them, and when once arrived at that, the 
 whole of the sum would be regularly sunk in the 
 purchase of bills.—If the continent Was open to 
 the admission of our goods, it is very probable 
 that the balance in our favor would be so great, 
 as compleatly to counteract the effect of the bank 
 notes, on the course of exchange, provided the 
 notes be not further increased. 
 
 Our exports to the continent in lSOQ were 
 nearly 27 millions, and our imports 20 ; the bills 
 which would be drawn for our imports, to the 
 amount of 20 millions, were supposed to be at a 
 discount of fifty per cent, we have then only to 
 calculate the effect, which the 7 millions must 
 have, when brought into the foreign market to 
 
\ 
 
 45 
 
 purchase them ; it should be recollected, in making 
 any such calculation, that the goods exported and 
 imported, are rated at the prices current in the 
 home market; if we allow ten per cent for profit* 
 freightage, &c. there will, in reality be only 18 
 millions drawn for, on account of imports ; ma¬ 
 king the same allowance for the exports, we shall 
 have to draw bills on the continent to the amount 
 of nearly 30 millions ; and supposing the foreign 
 trader to have a share of this profit, it will remain 
 probable, that the British merchant has two thirds 
 at least; as we know that British capital is generally 
 employed both in our exports and imports. Thus 
 we see, that the balance of trade, instead of being 
 brought into the country, is expended in correcting 
 the rate of exchange, which is rendered unfavourable 
 by an excess of paper,—diminish that excess suffi¬ 
 ciently, and trade will cause gold to flow to us in 
 abundance. 
 
 It is rather difficult, to state the exact amount of 
 the depreciation of our currency ; the issue of pa¬ 
 per, in most of the European states, has made 
 currency cheap and bullion dear; and even where 
 the price of paper is not kept up by law, still, by 
 forming a part of the currency, although at one 
 half or a quarter of its nominal value, it increases 
 the whole amount, and assists in the general de- 
 
46 
 
 preciation of money—and when money is generally 
 depreciated, it is difficult to find a standard where¬ 
 by to compare our own currency. It is evident, 
 from what has been said of the state of our trade, 
 that were bank notes to be withdrawn from circu¬ 
 lation, our currency would yet be depreciated by 
 the influx of the metals, but the quantity of gold, 
 thus drawn into this country, would affect, to a 
 certain extent, the whole of the continental cir¬ 
 culation. Admitting that our custom house re¬ 
 turns are correct, or nearly so, it will be a mode¬ 
 rate computation to state, that our currency is de¬ 
 preciated, below the rest of Europe in general, 30 
 per cent. ; that 15 per cent, of this, is caused. Jpy 
 the tendency which our trade has to make the pre¬ 
 cious metals plentiful, and the depreciation of the 
 other 15 per cent, is caused by an excess of bank 
 notes, above what our flourishing trade requires. 
 There are a number of facts to justify the opinion, 
 that it is more depreciated than even 30 per cent, 
 but as these in part apply to the rest of Europe, 
 as well as to ourselves, we need not go into them 
 at length ; it will, however, be worth while to 
 glance at them, as it may assist us in forming a 
 more general view. 
 
 There is no better mode of determining the value 
 of money, than by the quantity of land, labour 
 
r 
 
 47 
 
 and provisions, a given quantity will purchase. 
 When the discovery of the American mines made 
 gold and silver more plentiful, than they had pre- 
 
 t * " y f 
 
 viously been, money became of less value ; that is, 
 it would not procure so great a quantity of any ar¬ 
 ticle, such as land or labour, and as the metals ac¬ 
 cumulated in Europe, they gradually sunk in va¬ 
 lue. If the supply from America continued greater 
 than the consumption of Europe, there would then 
 be no difficulty in the matter, it would be ac¬ 
 counted for by the increase of quantity.—But, 
 upon a little examination, we shall find, that not¬ 
 withstanding the gold mines yield less now, than 
 they did when money was more valuable, yet the 
 fact is clear, that all over Europe the current mo¬ 
 ney is depreciated, and it may be accounted for by 
 the following considerations. 
 
 Of late, paper has been made to perform a great 
 part of what gold and silver formerly did, so that, 
 if the metals have not been increased, we have 
 found a substitute, which has, and that to a great 
 amount, not only in England, but in most other 
 states ; it is probable, that in Europe there is as 
 much paper circulated as gold and silver, and if 
 we suppose the amount of the precious metals to 
 be only two thirds of what it was formerly, still. 
 
48 
 
 upon that supposition, the circulating medium of 
 Europe will be greatly increased. 
 
 The extensive establishment of banks, also 
 
 < 
 
 tends to economise the use of money, as the trader 
 is not under the necessity of keeping as large a 
 stock in hand ; before banks became so universal, 
 a great part of the money of a country lay inactive*, 
 but now through their agency, it is nearly all kept 
 in a state of active employment. These two causes 
 operate more strongly in depreciating money, than 
 the trifling diminution in the produce of the mines 
 of America, does in raising its value. 
 
 We have heard much said of late, respecting 
 the scarcity of money in Europe ; it should be 
 recollected, that the term scarcity is relative, and 
 it may be the fact, that money is difficult to be 
 procured, that is, such money as the inhabitants 
 noil) wish to have, and such alone as they appear 
 inclined to take, namely, gold and silver. This 
 is, however, the natural result of the different is¬ 
 sues of paper money.—The multiplying such a 
 representative or substitute, had the effect of rais¬ 
 ing the prices of every article, and when things 
 have thus increased in nominal value, an incon¬ 
 venience is sure to be felt, when the paper is sud¬ 
 denly withdrawn from circulation ; or, which is 
 

 49 
 
 nearly the same, when it is materially and suddenly 
 depreciated : this appears to be the condition of a 
 great part of Europe, at present, and such must 
 be the termination of an excess in a paper circula* 
 tion, when it is left to take its own course. 
 
 As for what has been said respecting armies 
 absorbing the metals, and mankind being more 
 inclined to hoard them than hitherto they have 
 been, on account of the political state of Europe, 
 it is scarcely worth while to reply to such argu¬ 
 ments ; they might have been advanced with some 
 degree of plausibility, when the whole continent 
 was in arms ; and appeared convulsed from one 
 end to the other ; but now, when it has obtained 
 something like repose, when not a tythe of the 
 exertion is made, to contend that the money is 
 taken for the use of the armies, and that indivi¬ 
 duals are more than ever inclined to hoard it, is 
 such a line of argument, as may be left to any 
 reader, without a single comment. 
 
 It has, also, been stated, that the difficulties 
 
 which attend bill transactions on the Continent, 
 
 are so great, that their circulation is much impeded, 
 
 and an argument is attempted to be founded on 
 
 that circumstance ; which goes to this extent, that 
 
 we have bills payable on the continent, but that 
 
 H 
 
50 
 
 such bills will not be taken in payment, for any 
 article which we have purchased, and, consequently 
 we are under the necessity of sending out the pre¬ 
 cious metals for that purpose. This argument, 
 when examined, will prove as weak as any other 
 which has been brought forward, by bank note 
 advocates : What ! are we expected to believe, 
 that our merchants send goods and draw bills for 
 payment, and that the goods arrive at the place of 
 destination, and the bills do not ? or are we re¬ 
 quired to believe, that all mercantile transactions 
 between the different parts of the continent are 
 destroyed ? what must we think of those, whose 
 assertions amount to this—-that if I had a bill of 
 5000 /. drawn on a respectable house in Ham¬ 
 burgh, and offered it in payment for goods at 
 Amsterdam or Gottenburgh, this would not be 
 taken, but that I must provide bullion to make 
 my purchases, and this too, not arising from want 
 of respectability, in any of the parties ; but merely 
 from the difficulty of negociating bills !! 
 
 We have often heard of individual egotism being 
 carried so far, as to make a man think, that what 
 affected him, must affect all the rest of the world ; 
 but we see, that there may be national egotism, 
 of as absurd a nature as that of the individual.— 
 So then, because our intercourse with the conti- 
 
51 
 
 nent is deranged, or partially interrupted, we are, 
 it seems, told that there are no longer any bill 
 transactions between Gottenburgh, Dantzig, Ham* 
 burgh, Amsterdam, Leipsig, Frankfort, 8cc. that 
 France, Italy, Austria, Saxony, Holland, Den¬ 
 mark, Sweden and Russia, cease to exchange their 
 respective productions. If the argument does not 
 go so far, it is worth nothing. If bills payable in 
 those different places, are common in mercantile 
 transactions, we can pay them as well as others. 
 The fact is, that, of all the various things which 
 are transmitted from one country to another, bills 
 of exchange are the best capable of eluding res¬ 
 trictive laws ; they are governed by principles 
 peculiarly their own, in short, they simply amount 
 to transferring a claim, from an individual residing 
 in one country, to a person residing in another, 
 who can more conveniently obtain payment 
 than the first claimant; and as credit, or the re¬ 
 putation of discharging all just claims, is of such 
 essential consequence in the mercantile world, that 
 consideration supercedes the necessity of compul¬ 
 sory laws. Even admitting that the regular re¬ 
 turn of bills is somewhat retarded, this might ac¬ 
 count for a trifling alteration in the exchange for a 
 short time, such as a month, but would he wholly 
 incapable of producing the effects at present felt 
 and complained of. There is one fact, however, 
 
52 
 
 which is conclusive on this subject, namely, the 
 price of foreign bills in the English market—if 
 there was any considerable difficulty in getting 
 those bills paid, they would not bear the high price 
 which they do at present. 
 
 There is one remark, (for it cannot be called an 
 argument) connected with the subject, which it 
 may not be amiss to notics ; it is, that the precious 
 metals are difficult to be procured, and can only 
 be had at a great expence : now that is the very 
 reason why they are the fittest substances to be 
 used as money; should gold become as plentiful as 
 iron, it would be thereby rendered unfit for its 
 present use ; it would still be valuable as a metal, 
 on account of its beauty, ductility, and not being 
 liable to oxydate or rust ; but it is its scarcity, 
 which renders it the best medium of universal ex¬ 
 change. The power of making money to an un¬ 
 limited extent, is too great to be entrusted to any 
 human being ; and wherever it has been attempted, 
 it has, after causing much misery, recoiled upon 
 itself. 
 
 These advocates for paper, like Goldsmith’s 
 schoolmaster, return again to the charge, and ap¬ 
 parently forgetful that they have been contending 
 that bank notes are preferable to guineas, and that 
 
✓ 
 
 53 
 
 the French decrees and the orders in council have 
 taken away our gold, now assert, that by the issue 
 of paper, it has been taken out of circulation, and 
 has materially assisted us in carrying on a pro¬ 
 longed and expensive war. If this was really the 
 case, we should have sufficient reason to be alarmed 
 at the prospect which it presented to us, of the 
 
 termination of our present contest ; if the last 
 
 % 
 
 guinea is to decide the struggle, we ought to pre¬ 
 pare our minds for submission, as it is notorious 
 that we have very few left. Those who bring 
 forward this argument, surely do not see its ten¬ 
 dency ; what is it but saying, that in the course 
 of the contest in which we have been engaged, we 
 have exhausted the necessary means of carrying it 
 on, without having gained our object, and, of 
 course, if we still persevere, it must be with di¬ 
 minished resources, and, consequently, less chance 
 of ultimate success ; while, at the same time, our 
 enemy is amply supplied with this needful article. 
 Bonaparte will, no doubt, cause such arguments 
 to be reprinted, and, at the same time, assure the 
 inhabitants of the continent, who arc panting for 
 peace, that even Englishmen acknowledge, that 
 their means of carrying on the war are nearly ex¬ 
 hausted, that he has only to continue his present 
 system, which will finally oblige Great Britain to 
 submit to a peace dictated by himself. The argu- 
 

 54 
 
 inent certainly leads to that conclusion, and there¬ 
 fore, every lover of his country must wish it to be 
 unfounded—let those who conceive that the war 
 has taken away our gold, account for it remaining 
 with our enemy, who certainly had greater armies 
 to pay in distant countries, than we either had, 
 or at present have ; if supporting large armies in 
 foreign parts drains a nation of its specie, why has 
 
 not France been left without any remaining portion, 
 
 / 
 
 by the long and gigantic struggle she ' :s made ? 
 —the reason is, she has nothing resembling our 
 small bank notes : When specie is sent from 
 France to pay her armies, banks do not supply its 
 place with paper, much less do they issue it to an 
 extent sufficient to banish the metals. That armies 
 employed in distant parts must be supplied with 
 gold or silver, is undoubtedly true ; but we know, 
 that the money does not remain in the places where 
 it has been expended, but gradually spreads itself 
 over the surrounding countries, and the most ac¬ 
 tive and industrious trading people, obtain the 
 greatest share, except they are already stocked 
 with a currency of some sort; so that even if we 
 concede that our money has been expended in 
 carrying on the war, the objection to bank notes 
 becomes stronger, as they prevent its return by 
 the operation of trade. 
 
55 
 
 When the French republicans issued a paper 
 money to excess, they banished gold and silver, 
 most effectually, but since they have been without 
 paper, all the wars in which the republican, and 
 imperial governments have been engaged, have 
 not had the effect of causing gold and silver to 
 disappear from circulation, and had we not per¬ 
 mitted and encouraged the circulation of our 
 bankers paper, instead of, and in the place of 
 money, our wars could not have drained us of it ; 
 therefore we come to this conclusion, that bank 
 notes and not war has caused our gold specie to 
 leave the country, and are the barriers which op¬ 
 pose and prevent its return. 
 
 We hare laid down, at the commencement of 
 our observations, what was conceived to be the 
 only principle upon which a paper money ought to 
 be issued, and we have seen, in opposition to this, 
 Mr. Pitt advised bank notes to be circulated, for 
 the purpose of keeping the gold in the country.— 
 We have learned the success of that notable ex¬ 
 pedient, and also seen, that bank notes have de¬ 
 preciated our currency, and turned the course of 
 exchange against us to a great extent; and we 
 have made it appear, that our trade yields us a very 
 considerable annual balance, but that bank notes 
 prevent us from making so profitable a use of it, 
 
56 
 
 as we might otherwise do, hut that it keeps bullion 
 comparatively cheap, and prevents the course of 
 exchange being greatly against us—in short, in all 
 that we have seen of the effects of our bank note 
 system, it is attended with nothing but injurious 
 consequences ;—yet the quantity is increasing, and 
 is likely to continue so, unless strong measures be 
 taken to prevent it ; for it is the interest of those 
 who at present possess the power, and that appears 
 to be capable of warping the mind in a strange 
 manner : to be assured of this, it is only necessary 
 to look at the principle, by which it is avowed the 
 bank regulates their issue of notes, namely, the 
 wants of those possessing real bona fide property. 
 Ought we to be surprised at any thing, however 
 injurious, when our currency is regulated by such 
 a standard ? Our astonishment ceases at the ac¬ 
 commodation afforded to individuals by country 
 bankers, when it is asserted of the Bank of Eng¬ 
 land, that they have thought themselves justified 
 in discounting to any extent, when the parties had 
 real property —and that they did not cease to ac¬ 
 commodate bankers and others, until they sus¬ 
 pected that they (the bankers, &c.) had no real 
 property l truly, a very wise determination !—As 
 mere bankers, you are prudent and cautious—you 
 will not lend your paper, unless you have a very 
 good prospect of being repaid.—All this is very 
 
57 
 
 well, as far as regards your own private welfare— 
 but when we look at its effects upon the nation at 
 large, we are amazed at the ignorance displayed, 
 of even the elementary principles of a currency. 
 
 According to this doctrine, for every man who 
 has an acre of land, or a house, or a ship, or in 
 short, any real property, they are to make notes 
 and lend them to him.—It has been calculated, 
 that there is in England, 1000 millions of real 
 property, such as land, houses, furniture, tools, 
 clothing, &c. now, according to this new principle, 
 the bank of England, and their worthy assistants 
 the country bankers, w T ould be justified in issuing 
 1000 millions of paper ; or, if they did not think 
 it prudent to accommodate to the full extent of the 
 property, 500 millions might be advanced, and 
 the note makers take great credit to themselves 
 for their moderation.—We then should, according 
 to the modern notion of men of mercantile expe¬ 
 rience, be an extremely rich nation ! This is to 
 be sure a fine ! a very fine ! a most admirable dis¬ 
 covery ! This is the easiest way of getting rich 
 that ever was heard of, and we may congratulate 
 ourselves that the discovery was made in England, 
 —Who will now despair of the discovery of the 
 philosopher’s stone, or of perpetual motion, when 
 we have found out the way to get rich, by printr 
 
 i 
 
58 
 
 ing a few pieces of paper and lending them to 
 each other. 
 
 > 
 
 The money of a nation is not the representative 
 of its property, but an instrument to facilitate the 
 exchanges of that property ; and even a part of 
 those exchanges are carried on, without any real 
 money being used ; as in the case of tradesmen 
 who have dealings with each other, and only pay 
 the annual balance in money : thus, two trades¬ 
 men might have dealings together, to the amount 
 of 1000/. a year, and the sum to be paid at the 
 winding up the year’s account, not more than 10 
 or 20/. Money, then, appears to be in its opera¬ 
 tion, confined to making those exchanges which 
 are immediately paid for, and discharging the 
 balances of credit accounts ; and it therefore fol¬ 
 lows, that the quantity of money ought never to 
 be increased, unless there were a greater number 
 of sales ; the money only representing the property 
 which is sold in a given time. But say the bank, 
 we will issue our notes to any one who has real 
 property.—Well then, we say, that sales are not 
 brisk, that there are not an increase of exchanges 
 made ; Mr. Merchant, senior, has goods which he 
 cannot sell, you accommodate him with notes ; 
 Mr Merchant, junior, is in the same situation, and 
 must also have notes ; in short, the trading part 
 
59 
 
 of the world do no more than they formerly did, 
 in the way of baying and selling, and therefore 
 you advance them more money to buy and sell 
 with ! Is it not palpably clear, that you increase 
 the evil you intend to remedy ? Adding to the 
 quantity of a mere medium of exchange, can never 
 beneficially increase the quantity of exchanges or 
 
 purchases.—You must increase the articles neces- 
 
 \ 
 
 sary to make those exchanges—there are two many 
 of some, and too few of others, and the wisest 
 way would be, to let those who are producing any 
 one article in too great a quantity, feel the neces¬ 
 sity of ceasing to produce to the same extent ; or, 
 if they are accommodated with advances of money, 
 let it be a part of that which is already in exis¬ 
 tence, and not think of creating new money, when 
 there is no increase of employment for the old. 
 The effects of this error, when put into practice, 
 are more extensive than at first sight they appear; 
 and when accompanied by others, which also have 
 arisen from practical men , are sufficient to account 
 for the inconveniences experienced by the mer¬ 
 cantile world, without supposing, in opposition to 
 the custom house returns, that our trade has 
 diminished, or that the balance is against us. 
 
 / 
 
Dank Notes ancl National Debt. 
 
 A s bank notes do nothing bat injury to a nation, 
 we very naturally ask ourselves, why such a system 
 was ever introduced ? and even when it was in¬ 
 troduced, why not forsaken as soon as its injurious 
 effects were felt ? It is probable, that when first 
 had recourse to, it was only intended to be made 
 use of as a temporary expedient ; but when once 
 fastened upon the nation, like a leech, it stuck, 
 and no minister has yet had the courage to pluck 
 it off. Even now, when its baneful consequences 
 are so sensibly felt, we have not the fortitude to 
 take the proper means to effect a cure; the medi¬ 
 cines are not palatable, and the necessary regimen 
 appears so frightful, that we endeavour to hide it 
 
 i 
 
 from ourselves, and go on year after year, suffer¬ 
 ing the disease to increase in virulence ; before we 
 get rid of it we have much to endure, ancl the 
 longer it is permitted to exist, the greater the 
 misery it will occasion. 
 
61 
 
 Some writers have contended, that promissory 
 notes are the offspring of the nation's debt—that 
 the latter necessarily produces the former. I ra¬ 
 ther think, that their connection will prove to be 
 accidental. The funding, or borrowing system, 
 might have been carried to as great an extent as it 
 is at present in England, without the aid of a single 
 bank note, or any other paper substitute for mo¬ 
 ney. The policy of the practice of a government 
 borrowing from a part of its subjects, or a nation 
 from a portion of itself, is very questionable ; it 
 probably originated in timidity—in a fear of offend¬ 
 ing the great mass of the people, by laying on a 
 tax, to enable them to make whatever exertion 
 might be deemed requisite. That it could not 
 arise from inability on the part of the nation, is 
 sufficiently proved by the money being advanced 
 in the shape of a loan ;—if ihe war, which requires 
 such sums, be just and expedient, the amount 
 should be furnished at once by the people ;—if it 
 is not so, the money ought not to be procured by 
 any means. 
 
 When William III. borrowed one million, the 
 nation could have furnished him with the same 
 sum in taxes ; let them be laid upon property, and 
 those who had much, would have to contribute 
 largely, whilst those possessing less would pay their 
 
 i 
 
62 
 
 proportion : some might be obliged to retrench 
 their expenditure, but so long as the people could 
 afford to part with that sum, and yet go on pros¬ 
 perous!;, it might as well be taken in one shape as 
 another ; for when furnished by way of loan, it 
 still is taken from the community. If we sa^ ( it is 
 advanced by mercantile men.—then there is so 
 much capital taken out of trade ; if from hoarded 
 heaps—these heaps might be reached by taxation, 
 or at least, so much might be absorned by a tax, 
 as would induce the owner of the hoarded heap, 
 to employ it in its place ; in either case, the same 
 quantity of money would remain in the hands of 
 the public at large. If then, the principal which 
 was furnished by loan, could have been obtained 
 as effectually by taxation, by what mode of reason¬ 
 ing can it be made to appear, that it required bank 
 notes, to enable the government to pay the inte¬ 
 rest ? It is admitted, that there would be addi¬ 
 tional employment for the money of the country, 
 but that, as has already been shewn, would draw 
 a supply from surrounding nations. 
 
 Bank notes are not the natural or necessary off¬ 
 spring of the nation’s or national debt, but of that 
 comparatively small sum, which the Bank of Eng¬ 
 land has lent to government. The indulgence ex¬ 
 tended to the Bank, in consequence of the trifling 
 
63 
 
 sums with which they have, at various times, ac¬ 
 commodated the government, has done, incompa¬ 
 rably, more real injury to the nation, than the 
 hundreds of millions which have been borrowed 
 from the rest of the public. 
 
 Mr. Cobbett, (to whom the public is much in¬ 
 debted, for the valuable information which he has re¬ 
 cently brought forward, as well as for the able man¬ 
 ner in which he has generally treated the subject,) 
 appears to have been led into the erroneous opinion, 
 that bank notes are inseparably united with the 
 stocks, by Mr. Paine, who certainly did not under¬ 
 stand the subject;—he thought he saw a similarity 
 in the paper money of France and America, and 
 the bank notes of England, and wished to make 
 them essentially the same ; whereas, they are radi¬ 
 cally different. In England, the owners of property 
 rather than pay taxes, consent to mortgage that 
 property, and government are the agents, who col¬ 
 lect and pay the interest ;—and this practice of 
 mortgaging, may possibly continue, until the 
 whole of the property in the country, is trans¬ 
 ferred from the present possessors to the mortga¬ 
 gees ; or, what we commonly call stockholders : 
 in all this, there would only be a change of pro¬ 
 prietorship of the land, &c. and the state of the 
 currency might have nothing to do with it. 
 
64 
 
 0 i 
 
 But the governments of France and America* 
 acted as if they thought, that they could increase 
 the amount of the currency to an unlimited extent, 
 without diminishing its value.—Experience soon 
 shewed their error ; and as they, did not attempt 
 to withdraw their paper from circulation, it sunk 
 until it became valueless, the holder being de¬ 
 frauded of the amount. Our banks are partly in 
 the situation the governments of those two na¬ 
 tions were, as far as respects the issue of paper.— 
 There is, however, this important difference—the 
 banks have a great mass of real property, where¬ 
 with to pay their notes, and are responsible to the 
 full amount of their private property, with the ex¬ 
 ception of the Bank of England, and there is no 
 doubt, but that with proper precaution, that esta¬ 
 blishment will be enabled to pay every note in 
 gold and silver—whilst France and America had 
 carried taxation to its utmost limit, before they 
 issued their paper, and were in reality in a state of 
 bankruptcy. 
 
Remedies Suggested . 
 
 e have now had a clear view of the evil, and 
 seen that its introduction was unnecessary ; that 
 it does not afford us the least assistance, but on 
 the contrary, it is paralysing the energies of the 
 country, saping the foundation of public security, 
 and threatens, if suffered to continue, to immerse 
 in misery the whole mass of society, by destroying 
 private confidence.—Much, however, as we may 
 regret, that a remedy has not been applied before 
 the disease attained such a height, it is more par¬ 
 ticularly our duty, to endeavour to devise means 
 of getting rid of it, in the mildest form possible ; 
 it is not to be expected, that this can be accom¬ 
 plished without some individual sufferings, yet, 
 we should recollect, that we have only a choice of 
 evils, and when that is the case, all that human 
 prudence can do is to select the least. 
 
 The bullion committee have recommended, that 
 
 K 
 
66 
 
 Jthe Bank of England should be made again liable 
 to be compelled to pay their notes in cash, and 
 that two years be allowed them to prepare for it. 
 —Now, although this would ultimately correct 
 the evil to a certain extent, yet it would not be 
 effected so gradually, as it might by other means; 
 there can scarcely be a doubt, that the Bank of 
 England would make every preparation for the 
 fixed period ; but would country bankers have the 
 same prudence, or would not many of them rather 
 increase their issue, in proportion to the diminution 
 of Bank of England notes ? From the conduct of 
 a great part of them, since the passing of the 
 Restriction Act, we are not justifiable in trusting 
 to their prudence; it is probable, that upon their 
 being liable to arrest, for not paying gold and 
 silver for their notes, failures would be instantane¬ 
 ous and extensive, as it is not in the nature of 
 things that gold could be immediately procured to 
 pay all the notes,—and would not this be urged at 
 the expiration of the two years, as a sufficient 
 reason for fixing a more distant period ; and that 
 ultimately altered for another, still more distant, 
 ad infinitum ? The original cause of that law was, 
 the people began to suspect the bank notes, and 
 this was greatly increased by the failure of some 
 country bankers, and should it be repealed at the 
 end of two years, without sufficient preparation 
 
67 
 
 having been made for it, the failures of country 
 banks must be greater than in 1797 : And it is 
 not too much to presume, that the misery which 
 would stare the country in the face, would over¬ 
 come the fortitude of government, and the Res¬ 
 triction Act be suffered to continue in force. 
 
 If ever that injurious law is repealed, it will 
 behove the legislature itself to make some previous 
 preparations, what the nature of those should be, 
 it is not so easy to determine ; there are none but 
 what are attended with difficulties, and open to 
 many objections; indeed, in such a case it is not 
 to be expected, that the road will be even and 
 pleasant. 
 
 Gold will not remain in the country in sufficient 
 quantity, until bank notes are lessened ; therefore, 
 the first object to be attained, is a reduction of 
 their amount, and that cannot be compleatly ef¬ 
 fected, but by a direct interference of the govern¬ 
 ment ; and as*the importance of the subject is so 
 generally felt, let us indulge a hope, that they 
 will take the earliest opportunity of endeavouring 
 to provide an adequate remedy. It will, assuredly, 
 be a work of time, to bring the currency into a 
 wholesome state ; but it is indispensibly necessary, 
 that the task should be speedily undertaken. 
 

 as 
 
 In the first place, it might be prudent to increase 
 the stamp duty, on promissory notes payable or* 
 demand ; and the longest time fixed, that an in¬ 
 dividual note should remain in circulation, on pain 
 of forfeiture on the part of the holder ; the reissuing 
 such notes to be liable to a penalty. Having, by 
 such means as these, diminished the profits arising 
 from forcing paper into circulation, bankers might 
 be compelled to take out an annual license, for 
 issuing notes, payable on demand, and be obliged 
 to make a monthly return, of the amount of their 
 notes in circulation, distinguishing the small from 
 the larger ones ; this, by furnishing correct infor¬ 
 mation, would shew what further steps ought to 
 be taken, to effect a greater reduction ; if neces¬ 
 sary, the number of licenses might be limited, and 
 the utmost amount permitted to be issued, ex¬ 
 pressed in each license. 
 
 i 
 
 When, by such preparatory measures, the quan¬ 
 tity of notes in circulation was diminished, and 
 the price of bullion sufficiently reduced, as well as 
 the course of exchange turned in our favour, then 
 the Bank Restriction Act might, after a short 
 notice, be repealed.—Then might the bank pur¬ 
 chase bullion, and have guineas coined without 
 sustaining any loss, or being apprehensive that 
 they would be taken out of the country ;—fresh 
 
I 
 
 ' '69 
 
 supplies of gold and silver, (as has been shewn 
 from the state of our trade) would flow in, from 
 various parts of the world—the price of provisions 
 would be lowered, with which the poorer classes 
 would be pleased, and we should have all the ad¬ 
 vantages resulting from the possession of an abun¬ 
 dance of the precious metals ;—Our military ope¬ 
 rations would not be crippled abroad, from the 
 want of gold; and should it be necessary to subsi¬ 
 dize an ally, the ready means might be found to 
 do it ;—our national consequence would be in¬ 
 creased, and the public mind relieved from the 
 tormenting apprehension, of a general loss of pri¬ 
 vate confidence ;—then might we shew the world, 
 that we were equally prepared for war or peace, and 
 destroy at once the vague hope which our enemies 
 are known to entertain of beating us, by derang¬ 
 ing our finances, and destroying our credit. 
 
 And why should not all this be done ? Why 
 should we not place ourselves upon this proud and 
 commanding eminence, from whence we might 
 look, with conscious superiority, upon the rest of 
 the World ? * • f 
 
 We will examine some of the objections urged 
 against the destruction of the bank note system.— 
 “ Mercantile men,” say they, “ would be exceed- 
 
p 
 
 70 
 
 #• 
 
 ngly embarrassed, by the want of accommodating- 
 discounts.” To this I reply, that the ease with 
 which discounts have been obtained, has induced 
 the adventurer to plunge into trade, in a rash and 
 inconsiderate manner; the consequence has been, 
 that nearly every market is glutted with goods, 
 and the competition become so great among the 
 sellers, that the value of the articles is much re¬ 
 duced ; and the fair and prudent trader, finding 
 that he cannot get a moderate profit, has retired 
 from the struggle, and left trade in the hands of 
 speculators. 
 
 Those who have no property of their own,— 
 those who have nothing to lose, do the most 
 business ; and as such can only exist by constant 
 sales, the necessity of selling, whatever may be 
 the state of the market, soon destroys every source 
 of profit; when, no longer able to go on, a 
 bankruptcy ensues. Ought we to regret, that 
 trade is taken from such hands, and given to the 
 capitalist, who will manage it with prudence and 
 circumspection ?—Until that is done, trade will 
 partake more of the spirit of gambling, than the 
 honourable exchange of the commodities of diffe¬ 
 rent climates and soils.—So far from considering 
 the lessening of discounts an evil, it will be a great 
 
71 
 
 and extensive benefit, by bringing trade into a 
 more secure and a more profitable state. 
 
 The other objections principally relate to the 
 altered value (of money affecting contracts; and 
 these may be comprised in the three following, 
 namely, the dividends to the public creditor—the 
 fixed pay of the army and navy—and the con¬ 
 tracts of individuals with each other, as in the 
 
 case of leases, annuities, &e. 
 
 ✓ 
 
 With respect to the first, the nation is, at pre¬ 
 sent, bound to pay a certain sum to the owners of 
 the property, known by the name of stock, or the 
 public funds ; this sum is of a given value—that 
 is to say, is capable of purchasing a certain quan¬ 
 tity of provisions, paying a certain rent, support- 
 ing a number of servants, &c., in short, the in¬ 
 terest received for stock, enables the receivers to 
 live in a particular style or manner.—Now, should 
 the proposed alteration in the value of money take 
 place, the national creditor will have no reason to 
 complain, if he retains the means of keeping up 
 his established mode of living. Suppose, that one 
 creditor receives 1000/. per year ; well, the alter¬ 
 ation in the value of money, makes 800/. equal to 
 what 1000/. was before, consequently, if he re¬ 
 ceives 800/., it is, in reality, the same value which 
 
n 
 
 he had heretofore : he ought to be the more readily 
 reconciled to this, when he recollects, that his in¬ 
 come is by this measure rendered more secure. In 
 all great national objects, the interest of the few 
 is made to give place to that of the many :—but 
 here we have the whole benefited, and the few, 
 who, upon the first glance, appeared to be injured, 
 not in the smallest degree affected. It is perfectly 
 consistent with the principles of equity, that the 
 dividends should be lessened, in the same propor¬ 
 tion that money is raised in value. 
 
 Some persons are apprehensive, that it would 
 not be practicable to bring down the pay of the 
 army and navy, so as to accommodate it to the 
 altered value of money.—-If it should be necessary 
 to make any alteration in their pay, (which is what 
 I am not aware of) there is no doubt, but that, 
 forming a part of a general regulation, it would 
 be acquiesed in—with respect to contracts between 
 individuals, when we take into consideration the 
 time which would be necessary to effect the pro¬ 
 posed alteration, say two or three years, a law might 
 be made, altering the letter of all contracts, en¬ 
 tered into between individuals, within a certain 
 limited time. Thus, suppose the proposed altera* 
 tion to be completed in 1812 , then say, that 
 leases, annuities, &c. bearing date on or before 
 
the year I 8 O 9 , should for every 100/. substitute 
 £0/. such a law, with proper exceptions, might be 
 passed without more inconvenience, than attends 
 what is commonly called an insolvent act, or an 
 act to liberate imprisoned debtors ;—it would not 
 affect recent debts, consequently, the connexions 
 of trade would not be materially disturbed. 
 
 After all the objections that may be advanced 
 are duly weighed, we have to recollect, that we 
 
 have arrived at a state which cannot last, and we 
 
 * 
 
 have now only the choice of anticipating what 
 must occur in a more unpleasant manner, at no 
 distant period; when, by that anticipation, we 
 may make the alteration in a mild and compara¬ 
 tively harmless manner ;—or, we may permit the 
 bank note system to take its own course, and 
 effect its own cure, by a final and tremendous 
 crash of credit of every description. 
 
 When the affairs of either nations or individuals 
 become deranged, by accident or imprudence, the 
 wisest and most honourable course is, at once to 
 look the difficulty in the face—to turn aside from 
 the view of it, to endeavour to hide it from our¬ 
 selves, is at once cowardice and folly ; the pro¬ 
 crastination of a single day, makes the case so 
 fnuch worse ; if you endeavour to fly from difficul- 
 
74 
 
 ties, they will pursue you, and your suffefriqgs will 
 be incomparably greater, than if you had boldly en¬ 
 countered them. When attacked by disease, the 
 man who should refuse to take a restoring medicine, 
 because it was rather nauseous to the taste, would 
 betray so much weakness, that he would perish 
 almost without being regreted by any one. And 
 what ought to be said of a nation, which having it 
 in its power to infuse new vigour into itself ; called 
 upon by a thousand circumstances, in the most 
 imperious manner, to restore itself to a state of 
 political health, yet, clings to the disease which is 
 sapping its very vitals ; the nation so acting, would 
 merit the contempt of the world—-and would be 
 pointed at by the future historian, as exhibiting a 
 striking instance of that folly, which all others 
 should avoid ; would become a kind of beacon, to 
 warn succeeding ages of the dangers resulting 
 
 from national apathy, or political cowardice. 
 
 ^ / 
 
 * 
 
 FINIS\ 
 
 
 M. Wardle, printer, Manchester. 
 

 
 PI Hit h {‘963 
 
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