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 THE UNIVERSITY 
 
 OF ILLINOIS 
 
 LIBRARY 
 
 V.7 
 
 

 
 m^S^fi^ti^: 

 
 AN 
 
 INVESTIGATION 
 
 INTO THE 
 
 PRINCIPLES AND CREDIT 
 
 OF THE 
 
 CIRCULATION 
 
 OF 
 
 PAPER MONEY, OR BANK NOTES, 
 
 IN 
 
 GRE^T MRIT^IJV: 
 
 As proteAed or enforced by legiflative Authority, under the Sufpcnfion of paying 
 
 them in Cafh ; in the Extent of fuch Pnper Money, the Refponfibility attached 
 
 - to ir, and its Effeifts upon Prices of Commodities, individual Income, 
 
 Agriculture, Manufactures, Commerce; and upon the 
 
 Courfe of Exchange with foreign Countries. 
 
 TOGETHER WITH 
 
 A DISCUSSION OF THE QUESTION, 
 
 Whether the rcftraining Law in favour of the Bank of England from paying 
 
 Notes in Money, ought or ought not to be continued as a 
 
 Meafure of the State ? 
 
 Br WILLIAM HOmSON, ES^ 
 
 LONDON: 
 
 PniNTED FOR JOHN STOCKDALE, PICCADILLY. 
 1S03. 
 
 Price One Shilling and Sixpence.
 
 S, GosNELi, Printer, 
 Little Queen Street, Holborn.
 
 AN 
 
 INVESTIGATION, 
 
 i HE forced circulation of paper money has 
 been experienced to extinguifh the paper credit 
 of moft nations ^?vhich have hitherto reforted to 
 it. America abandoned it : France, in fpite of 
 her domains, found the more authority was ufed 
 to enforce it, of the lefs value it became. Both 
 thefe nations have been obliged to drop it, after 
 the holders were deprived of a great part of their 
 property, and many of them ruined. Exceffive 
 paper has hitherto proved the tomb of national 
 credit to Government, at leaft the difappointment 
 of the individuals confiding in it, and the breach 
 of public confidence. It has no termination, but 
 in it own extindlion ; it advances from a pound 
 to a hundred, from a hundred to a thoufand, 
 from thoufands to millions, and finally to the 
 juncture in which the whole delufion vanifhes in 
 the expanfion of iis own magnitude. 
 
 A 2
 
 ( 4 ) 
 
 The prefent fituation of Great Britain affords 
 a new aera in the hiftory of public credit : it Ihews 
 the experience of every day furnifhes new events, 
 on which paft experience can give little or no 
 light. In a flate of profound peace without and 
 confidence within, to find the Britifli Legiflature 
 deliberating upon a forced circulation of paper in 
 place of money, is a fingular occurrence. Hitherto 
 recourfe to fiich a meafure has only attended the 
 fituation of fiates contending with defperate 
 revolutions within, or oppreffion from without. 
 The meafure has only been reforted to on violent 
 occafions, as the laft exertion or expiring effort 
 of a government, without refources to main- 
 tain itfelf, or confidence in the fubjedls. Why 
 filch a meafure, the ufual concomitant of ex- 
 treme diftrefs and defpair, fhould be reforted to 
 and perfevered in by the Legiflature of Great Bri- 
 tain, may perhaps be a matter of curious re- 
 fearch to many ; to trace the probable confe- 
 quences and effect of fiich a meafure upon the 
 community at large in fpcculation, may be amul- 
 ing perhaps to fpeculative minds. 
 
 Money is the reprefentation of all value in the 
 common acceptation of mankind. It is the fign 
 of acquired or accumulated wealth. It is the 
 meafure of pafi and future labour. It is the uni- 
 verfal accredited vehicle of property, and in 
 moft cafes of enjoyment. It is the fcale by 
 which the defirable objedls in life are diftributed 
 and efiimated, as well as the chief means by
 
 ( 5 ) 
 
 which they are obtained. It Is equally the inflru- 
 ment by wliich the acquu'er obtains poircffion, 
 and the motive for which the pofTeflbr yields pof- 
 leffion. It is meat, drink, and clothing, where 
 thefe neccliaiics cxift ; becaufe it procures them. 
 It is plcalure, becaufe it is the inducement of 
 a6\ion to thofe who minifter to plealure and 
 amufemenls. The excellency and influence of 
 money confilts in the power it directs over the 
 intentions and opinions of mankind. That power 
 fubfifts in the abftrat^: circumftance that no au- 
 thority can create or annihilate it at pleafure. 
 When the creation or deflrudion of it at the 
 pleafure of any power or authority commences, 
 the value of it muft ceafe, becaufe it then be- 
 -comes no longer the inftrument nor the mcafure 
 of volition. As fuch, the production or fabrication 
 of money affe6ls more or lefs every individual in 
 the fiate. Whether this univcrfally admitted fign 
 be the precious metals, as gold and filvcr, the 
 precious fiones or diamonds, fliells or paper, is 
 perfectly the fame, provided it is generally admit- 
 ted to be the fign or reprefentation of value. Any 
 of thele materials may equally ferve the purpofc, 
 and all of them in fome inflances hive been 
 adopted and ufed for money in various lituations 
 and circumftances. Whether the one, the other, 
 or any of them be fo ufed, they mud have the ef- 
 fential quality of imparting or bearing the value; 
 prany of them will be unequal to the end or pur-
 
 ( 6 ) 
 
 pofes of money. This value may be either Intriil- 
 fie or reputed. 
 
 Articles which are mod portable and durable, 
 carrying the eftimated value intrinfically with the 
 leaft variation, have in the mod general ufage 
 been preferred. For thefe reafons, wherever the 
 ufe of money has been beft known, gold and 
 lilver are metals which have always been chofen 
 in preference to any other fubilances. They are 
 fcarce in nature comparatively with other commo- 
 dities, and are only to be obtained by the appli- 
 cation or difpofition of induflry or labour, which 
 is the true Iburce of all value. They are durable, 
 and both their ilandard or comparative purity is 
 definable and eafily afcertained. They cannot be 
 contaminated or depreciated, but it is capable of 
 being perceived and dete6led. Neither can their 
 quantities be increafed or diminifhed at the plea- 
 fure of individuals, or even of political power. 
 An inexhauflible mine or fountain of money with- 
 out labour, would ceafe to retain any value. 
 Having thefe fixed and inherent qualities, their 
 prefence is univerfally admitted to be the eftima- 
 ted value, or to carry their value intrinfically. 
 
 They are therefore of the fame importance to 
 every pofiefTor, and become the univerfally ad- 
 mitted fign of money, of labour, or of value ; as 
 they are generally convertible into, or commutable 
 with labour, they are of the fame value. 
 
 Paper is an article of little or no intrinfic value, 
 but capable of bearing any value appended to it.
 
 ( 7 ) 
 
 or fiamped upon It, It is portable and eafily re- 
 newed. From thefe and other circum (lances of 
 convenience attending it, wherever character or 
 value could be attached, it has been adopted and 
 ufed as mone)^ So long as that inflrument has 
 been judicioufly regulated, it has ferved with 
 much utility all the purpofes of money. Expe- 
 rience has however fhewn it has its limits. When- 
 ever, and as long as paper can be converted into 
 money, it has been always admitted and received 
 as money. In fuch circum fiances it is the fame 
 in utility as money ; but fo foon as it cannot be 
 converted into money, either from the increafed 
 quantity, or from the want of money, it is no 
 longer of the reputed value. It may pafs for a 
 lime under deception ; but the moment this cir- 
 cumftance is difcovered, the value muft be dimi- 
 nifhed according to the opinion or eftimation of 
 the reputed value. In the tumult of the fears, the , 
 hopes, and the agitations ariling on the fpecula- 
 tions of mankind, to which paper money is par- 
 ticularly favourable, the value of it may become 
 extremely uncertain and precarious ; and if an 
 opinion may be formed from the paft occurrences 
 in different nations on that particular, any excefs 
 in it muft always terminate in the gradual difcredit 
 of that paper until its total extinction ; which for 
 the time, in the fufpenfion of confidence, muft 
 occafion a ftorm or convulfion in every operation 
 that vehicle is conncdlcd with. 
 
 It has been with ftatcs as with individuals.
 
 ( ^ ; 
 
 The views and obje6ls of governments, or their 
 neceffitics and propcnlities, have Jed them into 
 enterprifes to which their ordinary means or 
 powers were unequal. Real money, the lign and 
 meafure of human force, the fole engine of go- 
 vernments, as far as in their reach, has been often 
 fpent before their views have been accomplifhed. 
 In fuch circumfiances they have had recourfe to 
 reputed money, or paper jftamped with a nominal 
 value as long as current. When its eftimation was 
 gone they went in fome inftances fo far as to enforce 
 its circulation by authority, even with the punifh- 
 inent of death. But fuch authority has been fatal 
 in all cafes to the paper money, with as much 
 certainty as death has been to the individual ex- 
 ecuted under fuch authority. The application of 
 fuch force or authority is the true evidence of the 
 want of value. An abfolute power may by man- 
 date or decree enforce a fubje6t to take a piece 
 of paper not the value of a farthing, for a guinea, 
 -when offered in payment ; or fuch a decree may 
 in violence obligate a fubje6l to part with his vili- 
 ble property for paper on the fame fcale of value. 
 But it never can oblige that individual either to 
 continue in the fituation, or to bring other pro- 
 perty into the circumflances, more than he could 
 be induced to return to Hounflow Heath, and 
 carry his property or the fruits of his induftry out 
 with him, to meet the highwayman who had 
 robbed him there the week before. The duties 
 betwixt a well- arranged government and the fub-
 
 ( 9 ) 
 
 jc6l are reciprocal. They are held together by 
 the common tie of mutual confidence, and of reci- 
 procal fupport and prote^Hon. Without confi- 
 dence in the lubje6V, upon the ft ability and juf- 
 tice of any government, the paper money, ema- 
 nating from, or prote«^ed by, fuch government, 
 has always fallen in crfejdit, fo uniformly, that it 
 may be concluded it always will fall. Confidence 
 can fupport paper, but paper cannot always fup* 
 port confidence. 
 
 Tlie fiat of direct power in difirelTed govern- 
 ments has always been injurious to, if not de- 
 ftru6live of, tlie faith upon which pure credit 
 fublilis. Credit founded upon confidence is in- 
 dependent of power. It is felf-independent, and 
 neither needs nor will admit of any other aid. 
 Violence in every refpe(5t is incompatible with the 
 true principles of credit. They are incongruous: 
 w here the one exifts, the other will not continue 
 long. Force, like frofl on the fair vegetation, 
 chills and annihilates the fyfiem. So long as the 
 principles of credit eicift in any government, 
 there is no need of violence or deception. After 
 thefe principles are gone, the fabric comes into a 
 laiiguifhing condition, and requires extraordi- 
 nary aid. A prefTmg moment, an unpopular mea- 
 fure, or a deficiency of refources, may be aided 
 for the time by paper credit. But, fooner or later, 
 the meafure, under whatever cover, whether the 
 dire6l mandate of political power, or under the 
 cover of banks, will be difcovered. Then things
 
 ( 10 ) 
 
 will be reduced to firfl principles, according to 
 the extent of the evil. The credit of paper fup- 
 port muft fall, and the flate mufl: of courfe fland 
 or fall by its own energy. When this comes to 
 happen, it m^y be a confederation, whether or 
 not the flate would have been better to have 
 always maintained itfelf upon its own vigour, 
 than to have been propped by the viiionary re- 
 Tource of paper. 
 
 Banks, eftablillied through a feries of years of 
 prudent management and of known capital, ac- 
 quire a great degree of confidence and credit with 
 the public. As fuch, they are liable to become a 
 defirable inflrument in the hands of power, 
 wherever fuch an inflrument can be obtained. 
 Political power may perhaps, for a time, be able 
 to efFecSV, under the credit of fuch an eflablilh- 
 ment, what it otherwife could not efFecl on its 
 own credit with the public opinion. Power may 
 be accommodated, and the bank benefited, under 
 that deception. But both have their limits. Nei- 
 ther the accommodation to a government nor the 
 profit to a bank can be extended ad infinitum \ 
 and happy will that country be, which difcovers 
 the true point between them, where to reft with 
 utility to both. As the people bear the burden 
 of the whole, the point to flop at would feem to 
 be, where the utility and advantages to the com- 
 munity compenfate the charge both of the go- 
 vernment and of the banks. Any undue en- 
 croachment upon either lide of the line is to be
 
 ( " ) 
 
 deprecated ; and every individual in the flate has 
 an intereft to contribute his aid to maintain the 
 juft limit. 
 
 The paper of the Bank of England would ap- 
 pear, from the late diredl law of Great Britain, 
 fortified under the difficulties and expenfes of the 
 courts of juflice, to have been made almoft, or 
 nearly, a legal tender of money. Every indivi- 
 dual, therefore, is concerned in the meafure. 
 
 May he not be permitted publicly to examine 
 the conftitution, credit, and authority, on which 
 this paper circulates, the probability of its main- 
 taining the nominal value ftamped upon it, fo 
 that he, as a holder in common with the com- 
 munity, may not diredlly, or ultimately, be both 
 deceived and injured in its value; the efFedt it 
 has upon him, in the various circumftances and 
 relations of life and property ; and, finally, to in- 
 quire, in his reafon and underftanding, whether, 
 or not, fuch a law be juft and politic in the prin- 
 ciple and effe^ls, and whether it ought to be con- 
 tinued from time to time, or to be put to an 
 end ? 
 
 In tracing this fubjeft upon fac^s, we find the 
 Bank of England to have been founded in the 
 year 1694, with a capital of two millions two 
 hundred thoufand pounds, to receive an annuity 
 from Government in lieu of tliat capital. From 
 the utility of the eftabliihment to Government, a« 
 well as to the commerce of Great Britain, the 
 ^ank appears to have obtained repeated augment- 
 
 £ 2
 
 ( «» ) 
 
 ations in capital, which chiefly fecm to have ori- 
 ginated in the connexion between the ftate and 
 it, until the year 1746, when the capital was in- 
 creafed to 11,686,800/. of 3 per cent, cofolidated 
 annuities. For this fum, which is the prefent ca- 
 pital of the Bank, it is not believed the Bank, or 
 even its creditors, are entitled to demand or ob- 
 tain mon^y from the government in cafe of de- 
 rangement in the management, or even of necet- 
 lity, but only to continue to receive the annuity 
 of 3 per cent, correfponding to that capital. 
 
 During the exiflence of the Bank, there has al- 
 ways been found to arife a tendency in the mi- 
 niftry to draw as much aid from the Bank as pol- 
 iible ; and rather to operate upon the eftablifhed 
 credit of the Bank with the public, for aids and 
 loans, than to come forward, in their official capa- 
 cities, to the public, with the wants of the day. 
 Under th^ credit of the Bank, the miniftry for the 
 time appears to have had a llrong defite to veil 
 the prefent burden of their meafures from the eyes 
 of the nation, until they had committed the na- 
 tional honour for the difcharge of the debts. 
 
 The Bank, on the other hand, as a mercantile 
 body, being paid for its advances, always has 
 been liberal in the accommodation it afforded to 
 the miniftry. On thefe advances or loans to the 
 government chiefly has the capital of the Bank 
 been augmented, at different periods, lince the 
 original inftitution of two millions two hundred 
 thoufand pounds, to the prefent capital of eleven
 
 ( '3 ) 
 
 millions fix hundred and cighty-lix thoufand 
 eight hundred pounds. 
 
 The Legiflature formerly became fo jealous of 
 the connexion between the expenditure of the 
 miniftry and the gain of the Bank, as in the time 
 of King William and Queen Mary to enacl a 
 law prohibiting the Bank from advancing money 
 to Government, but on the credit of Parliament. 
 The Legiflature appears then to have confidered 
 the Government and the Bank in the circum- 
 ftances of the fpcndthrift and the Jew, under the 
 profpecl of the parent's eftate, and fettered the 
 connexion accordingly. But that regulation is 
 now removed. In 1793, the Government or Mi- 
 nidry obtained from the Legiflature, an acSt re- 
 moving the reftraint, and exempting the Bank 
 from the penalties of the former law. It ap- 
 peared the Bank, in confequence of that indul- 
 gence, advanced to Government between the years 
 1795 and 1797 about fifteen millions of money. 
 At prefent, there is no tie or regulation againft 
 further advances, or to hinder the Bank from ad- 
 vancing to Government whatever fum of Bank 
 paper Government may choofe to carry into cir- 
 culation. 
 
 The Legiflature of 1797 enabled a law, in fub- 
 flance hindering the creditor from proceeding to 
 arrefl in the firfl inflancc, or from giving bail to an 
 a6lion, on tendering a Bank of England note ; and 
 hindering the Bank from repaying gold for notes, 
 or even to repay thofe who depofited cafh, except
 
 ( u ) 
 
 at different times, to the extent of three fourths of 
 the fum depofited. This reflridion, as is believed, 
 has been fince continued, from time to time, by 
 following a^Sls of the Legiflature, with little varia- 
 tion. 
 
 By any law refiri6ling the Bank from paying 
 gold, no reiponfibility is left on the part of the 
 Bank in favour of the public, further than to give 
 one piece of paper, intrinlically worth nothing, 
 for another piece of paper. Although damped 
 with great fums, the money is neither payable, 
 nor exigible, while fuch law fhail exili. The 
 Bank iflues the paper, and Government pays it to 
 the public creditors, who cannot receive any thing 
 from the Bank for it, but another piece of paper, 
 which ultimately can only return to the Bank, 
 through the channels of the revenue, or in pay- 
 ment of a loan. The paper of the Bank feems, 
 therefore, rendered in fa6l the paper of Go- 
 vernment. For it is of little confequence who 
 makes or iflues the notes, lince it is the Govern- 
 ment that circulates them. Without the expen- 
 diture of Government they could not be circulated 
 to the extent, and under fuch exifling law they 
 may be circulated to the extent of the Government 
 expenditure. By ifluing from the Bank, the notes 
 are attended with this additional diltrefs to the 
 creditors of Government, that in place of receiv- 
 ing intereft for the debts they difcharge to Govern- 
 ment, the creditor pays to the Bank an intereft 
 Vpon that paper in holding it. In this view Bank
 
 ( '5 ) 
 
 notes, for the purpofes of Government, are not only 
 ■without limitation in the extent to which they may 
 be thrown upon the pubHc, and in the mifchief arif- 
 ing in that extent, but burdenfomc to the fubje<^ 
 in the intereft the Bank receives. Neither does it 
 appear wherein Parliament has any control over 
 any improper extent of fuch operations, which a 
 fecret or an improper undcrftanding between the 
 Government and the Bank, if that can happen, 
 might involve the public in. 
 
 The Bank profits at the lofs of the public cre- 
 ditor, and other holders of notes in circulation, 
 in a fum equal to the extent of the intereft of the 
 fum in circulation, which, from the account laid 
 •before Parliament in February 1803, amounts to 
 no lets than 16,108,560/. affording to the Bank, 
 without any value whatever to the public, an an- 
 nuity of 805,428/. being the intereft of the circu- 
 lating paper at ftvc per cent. Here is an addi- 
 tional tax levied on the community to the Bank 
 proprietors : and accordingly we have fcen the 
 fame diftributed in increaled dividends upon Bank 
 ilock, and divifions of accumulated profits to the 
 proprietors, while the price of every other public 
 fund has been much depreciated. 
 
 The operation of banking does not admit of 
 exceffive circulation of paper, without force or 
 power. The intereft of the banks, and the in- 
 tereft of the public, when left to their natural 
 operations, in the circulation of paper, mutually 
 corre(5l each other. The banks will not give out 
 I
 
 ( i6 ) 
 
 notes without a profit, which confids in the in- 
 terefl upon the notes. And, in general, the pub- 
 lic will not hold notes longer, or in any greater 
 quantity, than the purpofe to which they are ap- 
 plied will enable the holders to pay the intereft. 
 Yet, under the fpirit of adventure, this lall: admits 
 of exception and regulation. Banks will alfo 
 keep in view the folvency or ability of the fecu- 
 rities in the difcounted bills, to repay, a reftraint 
 which is removed in the loans to Government. 
 The notes in ordinary circulation, therefore, find 
 their v^-^ay back to tlie banks, and become a dead 
 letter in the bank repolitories, or are converted 
 into fome other medium, or value, in the hands 
 of the banks ; and then the lofs to the public, 
 or the profit upon them to the bank, ceafes. 
 When a bank commences the iflue of paper, it is 
 given either in credits to private individuals, to 
 public bodies, or for money. When individuals 
 repay their credits, the fame quantity or value of 
 paper, which was iffued, is carried back to the 
 bank, with as much more as is equal to the in- 
 tereit ; or, which is the fame thing, as much 
 money as will enable the bank to take up the 
 paper when it comes. 
 
 When individuals are rendered unable to repay 
 their credits, the bank-paper will return from 
 third parties, where there is no credit to meet it. 
 In that cafe the fum is loft to the bank in the 
 original credit, and the bank muft repay thq 
 third party from other refources. The notes
 
 ( "7 ) 
 
 given out for every difcounted bill, arc returned 
 in efFedl, when that bill is repaid ; which in ge- 
 neral is at the diftance of about two months 
 after, the ordinary term allowed to run on dif- 
 counted bills. 
 
 In the fame manner the bankers, to whom the 
 banks make the great iffues, when they balance 
 their accounts, or repay their credits, return as 
 jnany notes as they received from the bank. Hence 
 as to the notes iffued on difcounted bills, or on 
 accounts current, that can never be carried to 
 an improper extent without rilk and lofs to the 
 banks, which will always prevent great excefs in 
 paper money. 
 
 The intereft of the banks will prevent the iffue 
 of notes in return for money, or gold, unlefs in fo 
 far as that money may be neceffary for the ex- 
 change of their notes, or can be profitably em- 
 ployed by the banks otherwife, for in the courie 
 of the exchange,by receiving money in return for 
 notes, the profit of banking on the circulation 
 is loft ; becaufe the money lying unprodu6live in 
 the coffers of the banks, balances the paper 
 which is given out for it. When the paper is 
 returned the money is given away, and the ac- 
 counts of circulating bank notes is balanced. In 
 like manner with the bankers who are the great 
 circulators of notes ; the difcounted bills and 
 credits being repaid to them by the public, the 
 bank notes are balanced, and the paper all comes 
 back into the bankers' with an addiuonal fum of 
 c
 
 { »8 ) 
 
 money, equal to the profits made, when th« 
 bankers will return the notes to the banks. With- 
 out frefh credits, difcounted bills, or money, the 
 paper will not come into circulation again ; 
 and if got into circulation, it will always return 
 in the fame manner. The reciprocal interefl of 
 the bank which iffues, or of bankers who circulate, 
 and of the debtor who receives in loan on found 
 principles, will in general mutually check one 
 another, and limit the extent of circulating paper 
 by the principle of utility and reciprocal advan- 
 tage. Yet where the banks, or bankers, can 
 transfer the hazards of the adventurer on the 
 money of difcounted bills from themfelves, by 
 multiplied fecurities, or otherwife, it may be 
 carried farther than may be beneficial to the com^ 
 munity. 
 
 In the operation of difcounted bills, or credits, 
 in bank books, it is not neceffary the debtors to 
 the banks Ihould return the identical notes they 
 receive. It is only neceffary they repay the nu- 
 merical value of them in notes, or in money to 
 meet the notes. By the letter or tenour of bank 
 notes, they are payable to the bearer on demand ; 
 they go into the hands of the public at large, and 
 become the property of the porteur, who is there- 
 by entitled to demand the value of them from the 
 bank. In this confifls the only criterion and 
 hold which the public have againft the exceffive 
 circulation of paper money. By this title or right 
 to the bearer, the bank '" '•endered the guaran-
 
 ( '9 ) 
 
 tee of every perfon to whom it grants a credit or 
 difcounts bills with notes. For the banks pay 
 the notes in the firft inftance, and mufl have the 
 recourfc upon the original debtor on the paper 
 for repayment. If the original debtor, either by 
 misfortune or mifcoiidu61:, is rendered unable to 
 repay the bank, the value is loH to the bank. 
 Hence in the juft circulation of paper, the banks 
 iffuing the paper are refponlible to the public 
 for every individual to whom they give credit. 
 Upon this principle alone is founded every de- 
 gree of confidence the public may repofe in any 
 bank, or upon its circulating paper. 
 
 Let this refponfibility or criterion be fufpended 
 or deftroyed by any a£t of power, which may put 
 banks into a lituation in which they fhall be 
 liable only to give one note for another ; or to 
 exchange a flip of paper of any denomination for 
 another, or for one or more flips of paper of other 
 denominations, to make up the reputed nume* 
 rical value, every fecurity and every check to the 
 public is lofl: in that adl of power ; and the prin- 
 ciple or folid bafis of public opinion or confidence 
 is defiroyed by every teft being taken away. The 
 matter is made no better by renewal of the paper, 
 or by changing one piece of paper for another; the 
 holder may as well reft with it as it is. £ank$ 
 being in receipt of a profit of five per cent, for 
 every pound fterling in paper out of their hands, 
 need have nothing in view, but to accumulate 
 the paper upon the public as far as poflible. They 
 €2
 
 ( 20 ) 
 
 need nothing but paper and ink, either to maktf 
 or to renew them ; and the intereft of banks in- 
 duces them, in fuch circumftances, to increafe their 
 paper as far as poffible, whatever may be the 
 eiFe6l or confequences of it to fociety* 
 
 The chief difficulty which will remain to banks 
 will, in thefe circumftances, be, to get enough of 
 their paper into the circle. Having once got it 
 upon the public, they need not give themfelves 
 much after- trouble ; becaufe it cannot return 
 upon them, except through the channels in 
 which it went out from them. Then they have 
 the credit of their original debtors to meet it, 
 with a clear profit ariling upon it equal to the 
 intereft. Any perfon not having a credit, or not 
 having taken out bank paper upon a credit, can- 
 not return paper upon the banks j becaufe the 
 banks need not pay for it in any thing but paper. 
 And paper or notes taken out by any perfon, who 
 may fall into fuch circumftances, as that he cannot 
 re-obtain the notes, they cannot reach the Bank. 
 That paper muft remain upon the public until the 
 a(5l of power, removing the refponfibility of the 
 Bank, be done away, fo as to expofe the Bank to 
 the holder in a demand for money, on the tenour 
 of the obligation. In this fituation, the natural 
 connexion between the Bank or bankers, and the 
 public, is reverfed. In place of the Bank's being 
 the guarantee of the debtors to it in paper, the 
 public fuftain the lofs by holding the notes iftued 
 to Bank debtors, who ar« ncft in circumftances to 
 
 S
 
 ( " ) 
 
 tcturn the Bank paper ifftied to them; Bank notes 
 UTued on individual credits, can only return to 
 the Bank to the efred of diminifliing the quantity 
 in circulation, through the fame individuals in 
 Tctiring their own credits. And notes iffued on 
 the credit of and for the purpofes of Government^ 
 can only return to the Bank through the fame 
 channel, either in the revenue or in loans. When 
 all the credits given by banks in paper or notes, 
 are relieved by the debtors, there is no obligation 
 on banks to receive any more of their paper. And 
 the paper iffued to fuch debtors, whether public 
 or private, as do not retire, their credits mufl: re- 
 main upon the public ; the Bank gaining and the 
 public loiing the intereft upon it. 
 
 Iffues of notes to individuals will generally 
 be re£iri6l:ed by the profpecStof refponfiblity in the 
 individuals to reftore their credits, as banks mufl: 
 keep in view, they may at fometime be liable to 
 pay their paper in money. If there fhall be no 
 liich profpcd in the Bank, or if the public fhould 
 conceive an opinion, either that the Bank will 
 not be able to repay their paper, or that, by an 
 a<St of power, they will be protected from repay-, 
 ing their paper to the extent of its reputed value, 
 confidence will thereby be loft, and the pains of 
 death will not fupport the credit of the paper ; if 
 we may judge from the experience of nations, 
 which had recourfe to fuch modes of forced circu- 
 lation. In every event, iffucs of notes to indi- 
 viduals are fo choked, as will not probably be.
 
 ( " ) 
 
 carried to any great extreme ; but ifTues of paper, 
 to and on account of the Government, may be 
 extended on a much greater fale. 
 
 In general, the meafures and views of the ex- 
 ecutive government have no limits, but in the 
 want of money. Every profligate adminiflralion 
 is always in want of money. The chief diffi- 
 culties of Government conlift in prevailing upon- 
 Parliament, under the influence of the eye and 
 opinion of the public, to fupply it with money. 
 In the mean time, it has recourfe to every tempo- 
 rary affifiance ; and that being more in the 
 power of the Bank of England, than of any other 
 inflitution, it has been generally reforted to, and 
 affailed by the Government, to make advances 
 even beyond the prudence or inclination of the 
 Diredlors. This appears in a particular manner 
 from the correfpondence of the late Premier with 
 the Bank Diredlors, which came before Par- 
 liament and the public on a late occalion. In- 
 tcrcfl or profit muft always be a powerful motive 
 with the Bank Diredlors, to accommodate the 
 miniflry, from the immenfe gain attending it. But 
 the Bank Dire6lors formerly had a double duty 
 to attend to ; firfl, in obedience to the laws, 
 which the wifdom of former legiflatures had 
 pafled, to prevent any coUulion between the ne- 
 cefFities of the. Government and the avarice of the 
 Bank, which might be hurtful to the flate; fe- 
 condly, the credit of the Bank to maintain ia 
 fupporting the credit of its paper, by the faculty
 
 ( *3 ) 
 
 of converting that paner into money, at the will, 
 or according to the opinion or want of confidence 
 in the public. The late minifiry having obtained 
 the removal of both thefe embarraffments, by the 
 repeal of the law prohibiting the Bank from mak- 
 ing advances to Government, but upon the credit 
 of Parliament, and by reftraining the Bank from 
 paying their notes to the holders or creditors ; by 
 fuch a meafure, the obftacles to any concert be- 
 tween the Minifiry and the Bank Dire6tors are 
 completely done away. In this fituation, the Bank 
 is left to make and ifTue as many notes as the 
 Government and Dire<5lors may choofe, or think 
 fit to throw upon the public; which may be 
 done, either by giving the notes dire611y to Go- 
 vernment to pay debts, or by the Bank Directors 
 exchanging their notes with Government fecu» 
 rities, as in purchafing Exchequer bills, which 
 are the fame thing : and from which paper, no 
 relief or value is left in the power of the public, 
 but in the payment of taxes or loans, as before 
 obferved. The confequence was, as appears from 
 the after-proceedings in Parliament, the Bank 
 Directors, betwixt the years 1795 and 1797, were 
 thereby enabled, and adually advanced to Go- 
 vernment to the extent of fifteen millions ; and 
 the circulation of Bank notes in February 1797, 
 when liable to the calls of creditor or to con- 
 vertibility into money, has been fince fo extend- 
 ed, as, on the ifl February 1803, to amount to 
 16,108,360/.
 
 ( H ) 
 
 To this increafe of notes may be added a pro* 
 portionate increafe in the circulating paper of pro- 
 vincial banks, as emanating from the fame law. 
 It is true, the law retraining the Bank of England 
 from paying in cafh does not extend to any other 
 banks. Neither can the notes of any other banks 
 be offered as a legal tender, or even prevent arrefl. 
 But when the currency of other notes comes to 
 be objedled to, the ifluers pay no money, and 
 the public have no control over their paper ; for in 
 place of money the iffuer prefents, or may prefent, 
 a Bank of England note ; which, in fa6i, extends 
 the reftriclion law in favour of the Bank of Eng- 
 land to the circulation of the paper of every other 
 bank in the country. And as the Bank of England 
 Botes, in fuch an imraenfe circulation, are always 
 fo ealily obtained, when a demand Ihall be made 
 ©n country banks, it becomes almoft unneceflary 
 for country banks to retain in their pofTeffion any 
 value correfponding with their notes. In facSV, 
 they may circulate them with little or no capital. 
 
 In the year 1801 the number of country banks 
 was computed, in the Parliamentary debates, to ex- 
 tend to about four hundred, and fuppoling each of 
 them on the average to circulate 30,000/. of notes, 
 the aggregate of the circulation of country banks 
 would amount to twelve millions flerling. The 
 number of thefe banks is not decreafed iince the 
 peace, but rather increafed. Neither is there any 
 reafon for thinking their circulating paper is dimi- 
 nifiied in quantity. By adding this fum of the
 
 country bank paper in circulation to the fura of 
 notes of the Bank of England in circulation on 
 I ft of February 1803, they make the amount 
 of circulating paper in Great Britain to be 
 28,108,560/.; or, allowing for a moderate and 
 proportionate increafe in the paper of country 
 banks, along with that of the Bank of England, 
 the extent of the whole may be eftimated at 
 thirty millions, for the fake of a round number. 
 
 It is, perhaps, beyond the faculties of the mind 
 to conceive an adequate idea, or to trace the ope- 
 rations of this immenfe engine of political and 
 commercial invention. When it is conlidered 
 the fmalleft ramifications of every branch of it, 
 down to farthings, more or lefs influfence the 
 comforts and conveniences of every individual in 
 the ftate, it may be ftill more beyond the powers 
 of the human underftanding to inveftigate the 
 efte^ls of it. Every member of fociety muft be 
 intercfted and afFe6led by it, more or lefs, on all 
 his neceflaries and comforts. He ads on one fibre 
 or another of the f)'ftem. To endeavour to eluci- 
 date the principles, and to trace the moft obvious 
 operations and efFedls of this paper money towards 
 the community, is the obje6l of this Eflay, in the 
 view of aiding the opinion to decide how far it is 
 falutary to the public, and whether it ought to be, 
 or ought not to be continued on the prefent privi- 
 leged ftate, by eftimating the advantages and dif- 
 advantagcs apparently attending it. 
 
 D
 
 ( 26 ) 
 
 In viewing fuch an immenfe artificial fuperfiruc- 
 ture, which, fomething Hke the fyflem of nature 
 embraces in common every individual within the 
 fphere of it, we are firft led to inquire on what 
 foundation is the fabric fupported ; we are induced 
 to examine the folidity, in order to be convinced 
 of the permanency of the fyflem ; and to analyze 
 this wonderful machine, with which every indivi- 
 dual of the community, from the ftatefman, in 
 providing for the national expenditure, to the child, 
 in acquiring his toys, is at work with—this amaz- 
 ing invention, by which old linen is rendered into 
 every degree of wealth, to fuch numbers as ufe it. 
 . This immenfe reprefentation of property, to the 
 extent of thirty millions of circulating paper, in 
 idea and efiimation a real property, but intrinli- 
 cally, or in fubflance, nothing beyond the value 
 of as much blank paper, appears to be fupported 
 in the circle, fo far as belongs to the Bank of 
 England, upon the refponfibility of the Bank 
 of England to anfwer all engagements. The 
 quantity of money, which public confidence 
 had left with the Bank, at the time the affairs of 
 the Bank were laid open, was not allowed to be 
 publicly known in any ftage of the inquiry. The 
 concealment feems to import, the quantity was Icfs 
 than was withed to be known. Since that period, 
 the Bank of England has had no occafion to re- 
 tain gold, becaufe it cannot be demanded from 
 the Bank, and it is againft the intereft of the 
 5
 
 ( »7 ) 
 Bank to keep gold when there is no occafion for 
 it. The courfe of exchange has, lince that period, 
 been at times conlidcrably again ft this country, 
 which could only be balanced or paid in gold. 
 The advantages ariling from paying the balance 
 of exchange in gold, and the expenfe of procur- 
 ing gold being proportionally great, the Bank 
 will incur the expenfe of procuring gold as little 
 ns poffible. The country banks have the fame 
 motives, and look to the Bank of England for 
 gold, when that Ihall become neceffary. At pre- 
 fent, under the reftraining law, the notes of the 
 Bank of England ferve to the country banks all 
 the purpofes of gold. The conclufion to be in- 
 ferred is, they have little or no money, as they 
 have little occafion for it. 
 
 The foundation of the whole tnafs of circulat- 
 ing paper muft then reft upon the Bank of Eng- 
 land, which the circumftances already mentioned 
 feem to eftablilb, muft have little gold. What 
 then remains ? The capitals and credits. The 
 capital of the Bank of England confifts of 
 11,626,80c/. three jper cents, of the three per 
 cent, national funds, which is not convertible 
 into money. It is only an annuity, which never 
 can take circulating paper out of the hands of the 
 public, or extinguifti the capital of that paper. At 
 moft, the annuity ariling upon it could only meet 
 the intereft arifing upon the capital of paper in 
 circulation, to the extent of 330,000/. fomethino- 
 more than a. fifth part of the intereft of the circu- 
 
 D 2
 
 ( 28 ) 
 
 lating paper : and liippofing it could be fold at 
 the market price in cafli, it would not much ex- 
 ceed one half of the fum in capital. 
 
 The credits of the Bank of England, when laft 
 cxpofed to view, confifled of 6,924,790/. includ- 
 ing cafh, bullion, and bills difcounted to the 
 public ; and the loans to Government occupied 
 the remainder of the fum of paper in circulation. 
 It from thence appeared the utility of the inftitu- 
 tion, for the purpofes of circulation and of com- 
 merce to the community, was within the extent 
 of fix or feven millions. The furplus is ufed as 
 an accommodation to the Government. Suppof- 
 ing, therefore, the fcale of the Bank economy, 
 when laid open, applied to its prefent fituation, 
 in the proportion of circulation, it may be at pre- 
 fent in advance io the Government in a fum pro- 
 portionally great, which might be nearly eftimated 
 in the faculties of the Bank under the circulation 
 of paper. The emolument of the Bank confifts 
 in lending to the Government the whole value of 
 its circulation, beyond the amount of its credits 
 to individuals. Previous to the repeal of the law 
 prohibiting any fecret undcrflandlng between the 
 Government and the Bank Direaors, the Bank 
 had the credit of an inftitution founded on public 
 utility, and fubfiiling upon the re<5litude of de- 
 portment, which might maintain itfelf even amidft 
 the wreck of revolution. But now it is evidently 
 embarked in the fame bottom, and muft fhare the 
 f^me fate with Government, From a felf-exifling
 
 ( 29 ) 
 
 and independent inflitutlon, like that of every 
 virtuous aliociation, in wifely condudting and pro- 
 tefting itfelf by public utility, it is become an en- 
 gine of the ftate, when more advanced in pvogrefs; 
 whiie the Government can protedlthe intlitution, 
 it has an intereft to do fo ; but in that dependanee 
 or connexion, its merit with the public may be an 
 after-conlideration, in eftimating that connexion, 
 with a virtuous and independent adminiftration, 
 upon the original principles of the inftitution. The 
 refponfibility of the Bank, and the folidity of the 
 whole fyftem, beyond the amount of the private cre- 
 dits at the Bank, would therefore feem to reft upon 
 the credit of the Government. The notes of the 
 Bank of England would thence appear to be in fub- 
 i^ance,or refponlibility,the notes of the ftate. Were 
 they to flow dire6lly from the Government, like 
 Exchequer bills, the holder would receive intereft 
 for them. But being made to flow from the Bank, 
 in place of the ftate, the public muft pay intereft 
 for them while the notes are held : and, as has 
 already been fhewn, it is not now left a matter of 
 choice or option with the public when to quit the 
 notes, by converting them into money. 
 
 In the inveftigation of this wonderful ryHem of 
 paper credit, the mind is puzzled to conceive, 
 why the Government, in its debts, or in the cir- 
 culation of paper, refting on the credit of the Go- 
 vernment, fhould prefer the credit of a banking 
 company to its own cr.dit ; or how the people 
 llioald accept of or hold the notes of a private^
 
 ( 30 ) 
 
 company refl:ri(5led by the Leglflature from paying' 
 them with money, in preference to the notes of 
 the Government, which muft equally pay the 
 Company's notes, if they Ihall ever be realized^ 
 Experience has fhewn Exchequer bills cannot be 
 circulated much beyond the extent of eight mil- 
 lions, without depreciation, and coming to a dif^ 
 count, while Bank notes are circulated under the 
 credit of the Bank of England to the extent almoft 
 of feventcen millions ; and, including the paper of 
 country banks, dependant upon or fupported by 
 it, to the extent of about thirty millions, without 
 coming to a perceivable difcount within the na-f 
 tion ; and that, notwithftanding Exchequer bills> 
 as already obferved, carry an intereft in favour 
 of the holder, while the holders pay an interell to 
 banks for their notes. How does this happen ? 
 It cannot be from difcredit or want of confidence 
 in the Government ; becaufe the refponlibility of 
 Government is equallythe foundation of both. Can 
 it arife from the want of difcernment in the people ? 
 can they be fo blind to their interefl, and make 
 their lituation fo much worfe by circulating the 
 notes of private companies in the place of the notes 
 of Government ? And does the Government avail 
 itfelf of that ftupidity in the people, and prefer 
 - relieving the Bank from payment of its notes, in; 
 preference to a forced circulation of its own paper? 
 The one and the other approach fo nearly to the 
 fame thing, that whatever cbnfequences may arife 
 from the one mny equally happen from the other'.
 
 ( 31 ) 
 
 And to whatever extent the paper of either autho- 
 rities may be carried, they Hand upon the fame 
 foundation in a great degree. But the paper of 
 Government is evidently Icail expenlive to the 
 pubhc. 
 
 The circulation of the paper of the Bank of 
 England to a greater extent than the paper of 
 Government appears capable of, may, perhaps, 
 arife in the fpiiit of fpeculation and adventure. 
 The fecurities of Government are only to be ob- 
 tained for value. The notes of the Bank of Eng- 
 land are obtained in loan without value, by cre- 
 dits in the Bank books, or difcounted bills. In 
 this manner they are conne6led with enterprife; 
 they get equally into the hands of individuals, 
 who have no corrcfponding property, as into the 
 hands of thofe who have property, and who 
 otherwife could not be poffefTed of them. Enter- 
 prifing individuals, in order to poffefs themfelves 
 of property, obtain notes through fuch loans and 
 credits ; and, to repay thefe notes, exchange the 
 property with other notes, or with other property. 
 This is done fometimes with benefit to the com- 
 munity, as in creating exchange of commodities 
 and competitions, and fometimes with difadvan- 
 tages, as in cafes of infolvency. But flill there 
 muft be confidence in the paper ; and how that 
 confidence Ihould become greater in the paper of 
 the Bank of England, as capable of being circu- 
 lated to a greater value, than in the paper of
 
 ( 3^ ) 
 
 Government, does not appear to be ealily ac- 
 counted for othcrwife. •' 
 
 Having got the immenfe fabric of paper once 
 afloat, to the extent of about thirty millions, 
 every farthing of which is eftimated by the holders 
 as real value, as long as it is convertible either 
 into gold, or fuch part of it as may be wanted to 
 be converted in fupport of its credit, or into the 
 property of other nations, the value thereby be- 
 comes real. If it is not convertible, or of no 
 value beyond the limits of this country, the value 
 is fiction and deception as to other countries, and 
 it alfo thereby becomes fo in fome degree at home. 
 By the exifting reflraining law it is not now con- 
 vertible into gold, or cafh. From the circum- 
 ilances into which the Bank of England has been 
 brought, there was not gold to convert fo much 
 as was neceflary to fupport the credit of a much 
 more limited circulation of paper. From the un- 
 favourable courfe of exchange with other coun- 
 tries, which could only be paid in gold, and the 
 expenfe attending the obtaining of gold to anfwer 
 the circulation of paper, which the reflraining 
 law rendered not neceffary, there is reafon to be- 
 lieve the Bank has as little gold as ever. The 
 profit of the Bank is dirc6lly againft the retention 
 of much gold, or foreign money. 
 
 Difcounted bills or credits remain to fupport 
 the paper. Both thefe imply a want of capital in 
 the individuals uling them^ or their capitals are 
 employed in the firft place, and the accommoda-
 
 ( 33 ) 
 
 tion of difcounts is taken in aid of capital. Others 
 fubfift and operate upon difcounts without any 
 capital, as is evident from the books of unfortu- 
 nate adventurers who fail. In many inflances 
 difcounted bills may be made an abufe, and be- 
 come hurtful to the real capital of the country. 
 Prior to the reftraining law, banks were refpon- 
 fible for all demands for cath on their notes ; 
 they could be called upon for money in relief 
 from the confequences of fuch difcounts. Since 
 the retraining law, every note left upon the 
 community, and iflued from difcounted bills, by 
 the inability of the individual to carry it back to 
 the Bank, is, during the reftraining law, little 
 fhort of a robbery from the public to the Bank, as 
 far as the value goes. The expenfeof it becomes at 
 leaft equally involuntary and irrefiftible. Suppofing 
 any accident to happen to the paper machine, 
 much reality might not be found in the difcounted 
 documents, or book credits. But thefe, it may 
 be alleged, being only to the extent of fix or feven 
 millions, as before mentioned, are comparatively 
 fmall. The great advances are made to Govern- 
 ment, and the debt is due by Government : firft, 
 in repayment of the Bank advances ; and fecondly, 
 in the Bank capital, the fum of which is more 
 than the amount of the circulation. As to the 
 circulation of the paper of country banks, their 
 capital ought no doubt to be taken into eftima- 
 tion. Their capitals are generally lefs than their 
 
 E
 
 ( 34 ) 
 
 circulation, and whatever they pofTcfs, even their 
 depofits, are generally placed in the national 
 funds ; if fo, the circulation of their paper feems 
 to reft upon the fame pillow. 
 
 The credit of Government is then involved in 
 the paper circulation, not only in what is ufed for 
 the purpofes of Government, but in the whole 
 confequences of paper circulation, or in however 
 much it may be abufed. Is there no hazard, the 
 credit of Government may be injured in the ufe 
 of paper, beyond that which is applied diredUy to 
 the ufes of Government ? What could be the 
 motives of former legiflators in reftraining the cre- 
 dit of Government with the Bank, by fevere pe- 
 nalties upon the Bank, till that barrier was re- 
 moved on the application of the late Miniftry ? 
 Were the late Miniftry more virtuous, or the 
 Legiflature more enlightened than formerly, in 
 fetting afide this regulation ? or, into what cir- 
 cumftances has the Government been condu6led, 
 that have rendered the meafures of the Legiflature^ 
 fo oppoftte ? when will Government repay this 
 loan to the Bank, of which the individuals of the 
 public hold the voucher in the circulating notes ? 
 Where are the aflets, goods, or chattels Govern- 
 ment has to anfwer the debts ? or what a6tion lies 
 either againft Government or the Bank for liqui- 
 dating this paper ? or, fuppofing their efFe6ls 
 brought into execution, will they afford payment 
 to all the creditors ? In the inquiry we are led to 
 confider the amount of tlje debts or engagements 
 
 4
 
 ( 35 ) 
 
 of Government, with the difpofition to, and fa-» 
 cility of payment. 
 
 The total capitals of the Government debt, on 
 the 5th of July 1802, appear to have amounted to 
 five hundred and eighty-fcven millions feventy-ihree 
 thoufand two hundred and eleven pounds thirteen 
 Ihillings, fubjedt to the variations^ in the addition of 
 the loan for that year of twenty-five millions fler- 
 ling, and of the floating debt on one fide, and of 
 the deduction of the operation of the finking fund 
 on the other fide. The note-holder finds but little 
 confolation in the general profpe6l : while the 
 fum of the debts is greater than the mind can 
 diftin6lly comprehend, little real is vilible on the 
 other fide of the account — nothing to reft confi- 
 dence upon — but the actual fubmiflion of the pre- 
 fent age, and of pofterity, to the increafing load 
 of the burdens of their anceftors for time pall, 
 and of themfelves for the times prefent, and to 
 come, held in the bond of opinion. And, how 
 variable is opinion ! It is thence in the power 
 of opinion to fupport or annihilate the fyftem in 
 an inftant ; and paper money, from its general 
 influence, may, like a helm, become the inftrii- 
 ment of changing the courfe of that opinion. 
 
 Change that opinion, either in the Govern- 
 ment, or in the governed, by overftraining the fyf- 
 tem, even the fhadow may vanifh for ever; and, 
 in place of opulence and power, leave only the 
 afhes of a rag. When fuch a convulfion hap- 
 pens, may it not change both the men and the 
 
 fi 2
 
 ( 36 ) 
 
 meafures ? Such events are in the fate and hif- 
 tory of nations. 
 
 It has been obferved bj' a deep-thinking author, 
 Mr. Hume, fuppofe four fifths of all the money in 
 Great Britain to be annihilated in one night, muft 
 not the price of all labour and commodities fink; 
 in proportion ? And fuppofe that all the money 
 in Great Britain were multiplied five-fold in a 
 night, muft not the contrary efie(?t follow ? If the 
 fuppofition is true with regard to money, it muft 
 be equally fo with regard to Bank, paper, which 
 reprefents money. But money has its limits, be- 
 caufe it is the true medium of value with moft, 
 if not all, nations. Wherever it is depreciated, 
 no power on earth, in a fiate of intercourfe with 
 fociety, can retain it. It is otherwife with paper 
 money, which is capable of being increafed a4 
 inji7iitum in any country, for no other nation will 
 receive it. Mr. Hume's conclufion appears no 
 lefs true in fa6l than in theory. 
 
 Money muft either go in circulation in the 
 given quantity, or it muft be laid afide. As Bank 
 notes bear an intereft to the Bank^ no perfon will 
 keep them idle; and, therefore, the increafed 
 quantity in circulation, muft float in the iq- 
 creafed price of comniodities. If a partial de- 
 rangement of the relative value of commodities is 
 occafioned by an influx of gold, it foon and gra- 
 dually corrects itfelf without any convulaon. If 
 fuch a derangement happens by paper, it gencr 
 rally termiqatcs in an explofton, becaufe paper.
 
 ( 37 ) 
 
 when it has no correfponding true value, always 
 tends to its own intrinfic value. It is an artilicia) 
 fupply of want by its authors to procure from the 
 occupiers that which the authors have not, or 
 otherwife cannot procure, and frequently termi- 
 nates in transferring the property from the indi- 
 vidual who pofl'circd, to the individual who 
 avails himfelf of that mode of pofTeffion, when it 
 cannot be otherwife obtained voluntarily. This is 
 always the cafe with infol vents, who do not pay 
 their bills or paper to their creditors. And it lias 
 alfo been ulcd by governments as the mean of 
 bringing the people under involuntary and vio- 
 lent contributions. 
 
 If Mr. Hume is right in his fuppofitlon as to 
 the effe6l of an augmentation or decreafe of 
 money in prices, by applying the principle to the 
 paper circulation in Great Britain, the cfFedl may 
 be nearly calculated. The extent of the circula- 
 tion of the Bank of England is the only circula- 
 tion regularly afcertaincd. Before the law fuf- 
 pending cafh payments, the notes of the Bank, of 
 England in circulation were in February J 79 7 
 about eight millions fix hundred thoufand pounds. 
 
 According to Mr. Thornton's account of it, the 
 average circulation, during three years, ending in 
 December 1795, was eleven millions nine hun- 
 dred and feventy-five thouland five hundred and 
 feventy-three pounds. Previous to the late war, 
 the circulation muft have been much lefs, bccaufc 
 the Bank was not permitted to make great loans
 
 ( 38 ) 
 
 to Government, and the payments by Govern- 
 ment, tfirough which the notes were circulated, 
 were iDuch lefs in amount. Moreover, gold for 
 Tmall payments was in abundance. Since the fuf- 
 penfion of cafh payments, the amount of the 
 Bank circulation of paper has rifen to lixteen mil- 
 lions one hundred and leventy-eight thoufand 
 five hundred and fixty pounds, confitling of three 
 millions two hundred and thiny-four thoufand 
 five hundred and thirty pounds of fmall notes of 
 the value of two pounds, and of one pound ; 
 and of twelve millions eight hundred and feventy* 
 four thoufand and thirty pounds of notes of 
 larger fums, being an increafe of more than a 
 third, and, at times, of one half of the paper for- 
 merly in circulation. The confequence of which 
 muft be fometimes double, and always a third 
 more money mufi: go in the price of commodities 
 ufed in ordinary life ; or, which is the fame thing, 
 the income of every individual, in the meafure of 
 his enjoyments, muft, in moft cafes, be as much 
 reduced. A revenue of three thoufand pounds now 
 becom.es equal in eff^e6t only to two thoufand or fif- 
 teen hundred pounds of revenue formerly; three 
 hundred pounds per annum, becomes equal only to 
 two hundred or one hundred and lifty ; and a re- 
 venue of thirty pounds only equal to twenty or 
 to fifteen pounds. The diminution either in com- 
 forts or necefiaries muft be conformable to that 
 fcale, throughout fociety at large, fituated under 
 the influence of fuch paper circulation.
 
 ( 39 ) 
 
 In articles of neceffity, when limited in quan- 
 tity, the diltrefs may be carried to a ftill greater 
 degree by means of paper credit, or paper money. 
 The confumption of articles of luxury, or even oF 
 convenience, when the price is high, may be de- 
 ferred until the price becomes fuitable. But iil 
 articles of neceflity that cannot be done. They 
 mud be had as long as within the power of the 
 ufer, at whatever rate. Any means, which enable 
 the pofleflbr of fuch commodities in times of 
 fcarcity, to withhold the articles from market, 
 enable him to raife the price juft as high as he 
 may choofe, or as the laft fhilHng of the ufer can 
 reach. Difcounting of bills, in the late fcarcity, 
 enabled corn- dealers to relieve the demands upon 
 them for payment of prices, and to feed the mar- 
 kets juft as their avarice dictated, and thereby muft 
 have added greatly to the diltrefs in the dearth. 
 By a fpeculation in rum, founded upon difcount- 
 ed bills, it was railed to three prices, which li- 
 mited the confumpfion fo much as to accumulate 
 the quantity beyond the power of the fpeculators. 
 The confcquence was the ruin of the fpeculators, 
 and an after difirefs to the grower of the article, 
 arifing from the glut. In this inftancc, difcounted 
 bills equally produced ruin to the adventurer, as 
 in the diminifhed confumption it raufcd an in- 
 jury to the planter, to trade, and to the revenue. 
 By the command of fi61itiou3 money in paper, the 
 fame thing may be done, and is done, more or 
 lefs, in every article. The Bank Dirc6lors, by
 
 ( 40 ) 
 
 withboldinf^, or pouring upon, the public paper 
 money, may raife or lower prices as they pleafe, 
 £o long as the public have no check upon them, 
 by demanding the converlion of their paper into 
 value. No perfon, who buys during an increafed 
 circulation, can fell, during a diminiihed circula- 
 tion, without lofs, if not ruin. 
 
 By the retraining law, nothing feems to be left 
 with the public in felf-defence againft fuch con- 
 fcquences, fnort of the abfolute reje6lion of paper 
 money in the firft inftance ; for violent meafures 
 always give rife to fevere, if not to violent, reme- 
 dies. Gold, the general ftandard of money in fo- 
 ciety, is not fubjedl to fu 1* abufe, and cannot be 
 made the meanfe of fuch irrefiftible diflrefs to in- 
 dividuals. It is as much beyond the reftraint of 
 power, as it is proof againft the devices of private 
 fraud and of public deception. 
 
 Fortunately for mankind, however, there are 
 times and fituations,in which the prices of neceflary 
 commodities cannot be influenced by the opera- 
 tions in money. Among the burning fands in the 
 deferts of Arabia, where there is little or no wa^ 
 ter, the lad lixpence might be extorted for a 
 drink of water ; but, on the banks of the Nile, 
 it is impoffible to bring in ordinary circumflances 
 any price upon it, the quantity there being fo 
 much greater than the occaflon for it ; and ftill 
 w ater is of equal utility to the animal economy 
 in both places. 
 
 Corn is now become in fuch plenty, from the
 
 ( 41 ) 
 
 late favourable feafons, the fi(5^Itious flate of 
 paper money cannot influence it ; notwithftand- 
 ing the depreciation of money, that article is 
 fallen back in price. Animals being lons:er in 
 attaining maturity, butcher's meat cannot be fo 
 foon fupplied, and, not being in fuch quantity, 
 like mofl other articles of luxury, it is kept up in 
 price upon the fcale of depreciated money. 
 
 There appear, therefore, to be circumf^ances, 
 in which paper money cannot afFecl much certain 
 articles of abundance. But wherever there is necef- 
 llty and fcarcity combined, paper money will always 
 be an inflrument to add to the diftrefs. While 
 the extent of the circulation is kept up, inafmuch 
 as the money is thrown out of the price of fomc 
 articles, it muft be fo much more accumulated in 
 the price of other articles. 
 
 In agriculture, the depreciated ftate of money 
 thus appears, in times of abundance, not capable 
 of influencing the prices of produ6tion ; for the 
 furplus of the commodity muft either be carried 
 into other countries, or it mufl refl at home and 
 keep down the price. Other countries will not 
 receive it advanced in price under the influence 
 of depreciated money, becaufe they can raife the 
 article cheaper at home. As the farmer pays his 
 rent from the price of the commodities he raifes, 
 the rent mufl: fall back in the fame proportion. 
 This muft in time alfo afFc6t the revenue of the 
 landlord, or proprietor, and reduce it upon the 
 fame fcale. Hence, while both .he farmer and
 
 ( 4Z ) 
 
 •the landlord derive no benefit in their revenud 
 from the increafed circulation of paper money, 
 they are loaded wilh it in their expenditure upon 
 other articles, either of induflry or of commerce. 
 In countries where the produdtion of articles ex-? 
 ceeds the confumption, paper money may thus, 
 become unfavourable to the extcnfion of asricul- 
 ture. 
 
 In manufa^lure, the price of the raw materials 
 muft be increafed in the fcale of depreciated cir- 
 culation. The intercfi: upon the price or capital 
 muft alfo be increafed. For if it requires 150/, 
 to be borrowed or employed to effedl: a certain 
 quantity, or extent, of any commodity or manu- 
 fa61ure, under the increafed circulation of paper 
 money, which loc/. would do, under the circula- 
 tion of gold, or the money of other countries, the 
 intereft upon that capital of the article becomes, 
 in reality, leven and a half per cent, when charged 
 at five per cent, of the money. It may be more : 
 according to the depreciation for the time. When 
 this is repeated in all the intermediate ftages of 
 the article, from the purchafc of the raw material 
 out of which it is formed, through the hands of 
 the manufacturer and merchant, or from the raw 
 material to the confumption, it may amount to a 
 very weighty evil ; and the manufaciurer, or mer- 
 chant, muft juft have fo much lefs profit from 
 it. The^revenue of the confumer can reach only 
 fo much lefs of the article. Hence it would ap- 
 pear, a depreciated flate of money, by excef-
 
 t 43 ) 
 
 l^ve paper, is unfavourable to the extent of ma- 
 nufai^ure^ both in the confamption and in deftroy- 
 ing the power of manufacturing at a cheap rate in 
 the country. In the rival countries it mud operate 
 as a premium on their induftry. 
 
 In a commercial point of view, the interefl of 
 capital, the commiffions and other charges made 
 by per ccntage, are increafed by the fame fcale as 
 already Ihewn, and which with the other advances 
 in price muft occur, and be repeated frequently 
 until the commodities reach either the confumer 
 or a foreign country. There it forms a barrier 
 againft the accefs of the commodity, which is the 
 meafure of the relative ftate of the two countries. 
 This mull be overcome by fuperior induftry, in- 
 genuity, and capital, or other accidental or local 
 circumftanccs, in order to maintain the intercourfe 
 and traffic. When the whole of thefe advan- 
 tages colledlively are unequal to put the tranfac- 
 tions of a country upon an equal footing with 
 any other country, thence arifes an linfavourablc 
 courfe of exchange, which mull be paid with any 
 gold remaining until that is exhaufted. It is only 
 after every outgoing in a nation is exhaufled and 
 calculated in a commercial point of view, that the 
 courfe of exchange rifes againft it. The exchange 
 is the difference arifing in balancing the value of 
 the whole tranfa(^ions. 
 
 It need not therefore be difputed, an incrcafc of 
 paper money enhances the price of goods. It of 
 courfe alfo difcourages both the exportation and 
 
 F 2
 
 ( 44 ) 
 
 confumption of them abroad, which muft raife" 
 the courle of exchange with foreign parts. The 
 expenditure of mankind in general is indivi- 
 dually limited by their revenue. The expcnfc 
 of their confumption cannot long exceed that re- 
 venue. The lower the price of commodities, 
 either of neceffity or of luxury, the greater quan- 
 tity is within the reach of their revenues, and will 
 be ufed. To a manufacturing and commercial 
 country, a fmall profit upon a great bufinefs is 
 more beneficial than a great profit upon a fmall 
 bufinefs. Exorbitant profits upon a limited bu- 
 finefs approach by degrees to monopoly, which 
 puts an end to the confiimption and fi:ops the 
 traffic. The price of commodities enhanced 
 through paper money mufl be compenfated to the 
 foreigner in the courfe of the exchange. This 
 may be carried fo far through paper, as to render 
 a traffic unfavourable, or againft a country, which 
 without paper circulation would be advantageous 
 and beneficial. 
 
 Wherever the circulation of paper money is fo 
 overcharged as not to be convertible into gold, 
 which equally maintains its value in all countries, 
 the paper money then becomes confined to the 
 circulation of its proper country. A difference 
 arifes betwixt the price of any article in gold, 
 and the fame value in paper money : a guinea 
 in gold may require twenty-two fhillings in paper 
 money to purchafe it. Increafe the quantity of 
 paper fiill farther, it may require double the fum ,
 
 < 4J ) 
 
 land It IS poffible to carry the quantity of paper Co 
 far as to lofe its reputed value altogether. Where 
 little or no gold is current, nor the money of other 
 countries, this may not be perceived ; becaufc 
 there is no other true circulating medium in fuf- 
 iicient quantity by which to meafure it ; but pre- 
 fent or pay with both the gold and paper in a 
 foreign country, and their refpe61ive values will 
 be found out. The fame thing happens exa6ily 
 in commodities and provilions ; the efiimated 
 value of paper money will on the Hime fcalc pur- 
 chafe juftfo much lefs bread, meat, drink, or other 
 articles of life. The fcale being gradual, it is not 
 obferved until the individual finds his fixed revenue 
 does not procure him the fame quantity. He mufi; 
 deny himfelf the gratifications and comforts he 
 formerly enjoyed, and reftri6t himfelf juft in the 
 proportion to the quantity and depreciation of 
 paper circulation. Let him ftep over the frontier 
 of the country to which the paucr depreciation of 
 money is confined, and he feels his income or re- 
 venue replaces him in his former confuraption 
 or comforts. 
 
 Government mufi: be fupported by the people ; 
 but it does not follow Government ought to be 
 fupported through the circulation of paper mo- 
 ney, which involves the fubjedl individually fo 
 much in his other concerns in life. In paying his 
 contribution to the fiatc there is neither jufiice 
 nor necefiity in laying him under contribution, to 
 enrich the numerous clafs of men engaged in
 
 ( 45 ) 
 
 banking, or the flill more numerous fpeculatoi^ 
 on paper money. After the individual has paid 
 his tribute out of his income, he is entitled to 
 have full value for the remainder. 
 
 It hss been maintained in favour of paper cir- 
 culation, that it enlarges the quantity of commo- 
 dities by giving life to new induftry. And it has 
 alfo been obferved the circulation of paper money, 
 particularly from the Bank of England, during 
 the late years of fcarcity, facilitated the import- 
 ation of corn. The firlt of thefe proportions is 
 a compliment to paper money better received than 
 examined into, and is not at all clear. The re- 
 verfe feems to be nearer the truth ; ifor induftry 
 is primary. Paper circulation may follow induf- 
 try in tranfporting commodities from the maker to 
 the confumer ; but without a maker and a con- 
 fumer, or without population and induftry, there 
 is no ufe for paper money. While paper money 
 will not make either the one or the other, they 
 may make paper money as a convenience — more- 
 over, paper money preys upon induftry, in the 
 intereft which it always carries to the iffuerj 
 neither could it have been of much utility in the 
 fupply of corn during the years of fcarcity. Paper 
 money cannot carry its value abroad into other 
 countries, nor pay the price of corn, or an unfa-* 
 vourable balance of trade which the importation 
 of corn occalioned. It has been already obferved, 
 that at home, in tending to raife prices on the one 
 band, and by difcounting of merchants' bills, and "" 
 
 5
 
 ( 47 ) 
 
 thereby relieving the merchant from the neceffity 
 of bringing the imported corn to market, but as his 
 avarice or interelt fuited ; on the other hand, it ra- 
 ther increafed thediftrefs. ThefaciHty of acquiring 
 Bank notes on credit without any fohd bafis, in- 
 creafed the number of fpecidators in corn. They 
 met each other, or their demands for corn met in 
 the foreign market, which in increafing the com- 
 petition or number of bargains, muft, as in other 
 cafcSj have had the efFedl to raife the price paid to 
 the foreigner. This increafe of price behoved to 
 reft firft upon the confumer, and finally a weight 
 upon the commerce and induftry of the country 
 in the balance of trade, or the courfe of exchange, 
 which was thereby rendered fo much more unfa- 
 vourable. The flime thing may happen, and cer- 
 tainly often happens, in the fpeculations on all 
 other commodities, the aggregate whereof is not 
 calculable; but it is vifible to afford a ferious 
 diflrefs to the commerce of the country, and to 
 its true capital. 
 
 In the intercourfe betwixt foreign countries 
 every advance upon commodities mufl either be 
 repaid in the courfe of exchange, or difcounted 
 on the price on going out of the country in which 
 it is produced. For in as much as the money in 
 any country is depreciated, the goods or merchan- 
 dife of any other country fold to it, will be jufl 
 lb much raifed in price on entering the country. 
 
 Exceffive circulation of Bank notes beyond the 
 only pollible criterion, their convertibility into
 
 r 48 ) 
 
 gold, which the reflraining law has done away 
 entirely, would, from the preceding obfervations, 
 fo far as they may be jufl, appear to be attended 
 with much injury to the community at large in 
 various refpedls ; more particularly, firfl, in bring- 
 ing the public under contribution of an annuity 
 to the banks of a million and half, equal to the 
 intereft of thirty millions of eflimated circulating 
 paper, without any value whatever — this fum 
 in real money formerly would have been equal to 
 the expenfe of a campaign in war : fecondly, in 
 the diminution of the fixed income of every in- 
 dividual in the flate, of one half, or at leafl of a 
 third ; and of courfe in a proportional deprivation 
 of his comforts : thirdly, in increaling the difficul- 
 ties to agriculture, to manufadlures, and to com- 
 merce, by enhancing capital and intereft employed 
 in them by railing the prices of labour and com- 
 modities, and by diminifhing the confumption: 
 fourthly, in increaling the evils of an unfavourable 
 courfe of exchange with foreign countries : and 
 finally, in laying the foundation for, and leading 
 diredlly to a general explolion of all confidence 
 founded on paper credit ; and which may be 
 attended by the ruin of many individuals at leaft, 
 if not by public confulion. - 
 
 Mr. Thornton has written with the view of 
 reconciling public opinion to this inundation of 
 paper money. He, though placed in the lituation 
 of a guardian of Bank notes as a Bank Diredlor, 
 has, in the courfe of his difcuffions upon paper
 
 ( 49 ) 
 
 credit, beenied toadmit evils arifing from an ex- 
 cefs in paper money. He has endeavoui:ed to 
 find a meafure by which to regulate the extent of 
 Bank notes in different ways : firft, in fixing a 
 fpecific amount to them : fecondly, in the pru- 
 dence of the Dircdtors of the Bank of England ; 
 for he feeras to agree the eictent of the circulation 
 of the paper of country banks depends, under the 
 reftraining law, as has been already traced, on the 
 paper of the Bank of England : or thirdly, in the 
 unwillingnefs of the borrower. 
 
 He feems alfo to admit, that notwithflanding 
 the great circulation of Bank notes, in fa6l pay- 
 inents of a great part of the value of commerce 
 are made not by notes, but by bills of exchange. 
 The latter are certainly a much fitter vehicle than 
 Bank notes. They are transferable by indorfa- 
 lion, which gives a greater fecurity in tranfmiflion 
 than attends Bank notes. They arc free from the 
 expenfe of intereft to the ifTuer of Bank notes ; 
 the}^can be made to fait every tranfaclion, and if 
 loft or deftroyed they are capable of being traced 
 or renewed without injury to the parties concerned. 
 They are in the power of every perfon who has 
 occafion for them ; and if true bills, they are radi- 
 cally founded, not on fidion, but on the property 
 hona fide transferred, and the reprefentation of 
 real capital or wealth ; and finally, they do not 
 produce an improper depreciation in money. Tiiey 
 have therefore many advantages over Bank notes 
 in real tranfadtions ; and as they fcrve all the pur* 
 
 G
 
 ( 50 ) 
 
 pofes of Bank notes for large fums, there appears 
 little or no neccffity for the Bank notes bearing 
 great fums. The great neceflity or utility there- 
 fore of Bank notes, feems to be confined to the 
 extent in which they fupply the want of circula- 
 ting money. This is difcovered from experience 
 to be in the extent of the fmall notes, and which, 
 from the flatement laid before Parliament, has not 
 at any time exceeded three millions four hundred 
 and fifty-three thoufand one hundred and thirty 
 pounds of the notes of the Bank of England of 
 two pounds and one pound ; and upon the fcale 
 ©f calculation on the extent of circulating paper, 
 may at moft be extended to as much more for the 
 country banks, making together the grofs fum of 
 6,906,260/. The notes of two pounds and one 
 pound ferve all the purpofes of guineas, and would 
 make up the blank in the circulation, which has 
 been occafioned by the difplaced gold. So far at 
 prefent there is an evident neceflity for Bank 
 notes ; but, beyond that utility, the difadvantages 
 ariling to the community would appear greater 
 than the advantages ariling from the circulatioh 
 of paper money, as now thrown loofe. Even 
 under the criterion of convertibiHty, paper money 
 may admit of much abufe, which real money 
 will not. 
 
 The prudence of the Dire(5lors of the Bank of 
 England, however enlightened in their minds, or 
 virtuous in their difpolitions, has always in themea- 
 lure, fidelity to the trufl committed to tliem in the
 
 { 51 ) 
 
 ofnce of Dlre^lors, and alfo dire6l emolument or 
 profit, both to themfelves and to their conftituents, 
 to contend with. The intcrefls of the community, 
 and of banking, are in d'weS. oppofition to each 
 other. The guardian of public interefl would be 
 ailing in oppofition to the banking intereft in 
 limiting the extent or ufcs of paper; and the 
 guardian o( the banking intereil is by fitua- 
 tion the ufurer to the community. They arc op- 
 pofite characters, and cannot be fupportedto their 
 extent by the fame individuals ; the one mufl be 
 facrificed in the encouragement of the other. The 
 Legiflature formerly, upon the fame principle it 
 limited the extent of legal interefl to five per cent, 
 deprived the DiretSlors of the Bank of England of 
 the power of lending to the Government, with- 
 out the authority of Parliament. Since that bar- 
 rier of public regulation has been removed. Let 
 the fituation of the public, and of their property 
 individually, be now confidered. Is it not in 
 the power of the Bank Diredlors to refiri6l their 
 circulation from the lateft known extent of fix- 
 teen millions one hundred and eight thoufand 
 five hundred and fixty pounds, on ifl: February 
 1803, to the extent of circulation, to which the 
 public economy, or the public confidence in the 
 Bank, had reftridled them in February 1797, un- 
 der the principle of paying gold, viz. eight 
 million fix hundred thoufand pounds ? And would 
 not the effedl be to fink the current prices of mod 
 articles in the fame proportion, or nearly one 
 
 G a
 
 ( s^ ) 
 
 half? And having fo ref^ridled their circulatioa^ 
 and To much lowered the current price of every 
 commodity, would it not be in their power to rcr 
 iflue the paper, and again raifc the prices to the 
 fame height ? Or in the prefcnt fituation of public 
 affairs, by lending to the Government lixteen 
 millions one hundred and eight thoufand four 
 hundred and lixty pounds more of their paper, 
 which has been Ihewn cannot return upon thena 
 but through the channels of Government, an^ 
 thereby almofl double the prefent prices of every 
 article not fuperabundant ? Under the exiflenc^ 
 of the retraining law, there appears nothing to 
 check or prevent fuch a meafure. Neither is there 
 any thing to render it perceivable to the public, 
 under a confidence between Government and the 
 Bank Directors, but in the courfe of exchange with 
 other countries, and in the reftri^lion of confump- 
 tion under individual fixed incomes. The fifteen 
 millions lent to Government after the reftraining 
 law, could not have been the property of the Bank ; 
 becaufe their capital was little more than eleven 
 millions and a half of three per cent, flock, or in 
 fierling money if then fold, than a third part of 
 the fum lent ; neither in doubling the loan upon 
 circulation in the fame manner, would more ca- 
 pital be required. The underflanding of John 
 Bull has often been made the fubjedt of ludricou.s 
 obfcrvation. In no inflance has his intellediual 
 difcernment been fo ill treated, as iq his own 
 fteward taking his own money oqt of his owa 
 5
 
 ( 53 ) 
 
 pocket, and charging him with the interefi: to hi$ 
 bankers for the pretended loan of it. 
 
 Even the weight of iuch a meafure might, by 
 great exertions in manufa6lure and commerce, be 
 rendered invilible or lefs perceivable in the courfe 
 of exchange. The advantages of an extended 
 and beneficial commerce with foreign countries, 
 which, under a regulated circulation of paper 
 money, would bring the courfe of exchange great- 
 ly in favour of Great Britain, maybe counterad:*' 
 ed in the exceffive circulation of paper money, 
 and may hold the exchange unfavourable. It 
 would appear the Bank Diredlors have difcovered 
 this point, and to have become able, by the ef- 
 fecl of paper, to hold the exchange with the con- 
 tinent juft: at the point at which gold does not 
 flow or return into Great Britain, notwithftand- 
 jng the increafed exportation held out in the 
 ilatements of the Miniflry. The exchange may 
 vary at different places, but, like different accounts, 
 it, by the operation of bills of exchange, is ge- 
 nerally foon brought to one general balance for 
 or againft any country. The extent of paper cir- 
 culation in the Bank flatement laid before Par- 
 liament, and the courfe of exchange, feem to have 
 become equally flationary. Is not then the courfe 
 of exchange, and the price of almofl every coni- 
 modity, in the hands of the Bank Dire^lors ? And 
 may it not be in the power of Miniflry, in collufion 
 with the Bank Directors, to raife or levy millions of 
 money from the people unconflitutionally? Willi;9t
 
 ( 54 ) 
 
 the ifllic of a million or more, as they may choofe, 
 of ready money thrown into the market ofthc na- 
 tional funds, raife or deprefs the price, at the difcre- 
 tion of the Bank Dircdlors ? and do we not fee the 
 Britifh funds riling and falling in flarts, almoft 
 every week ? The French funds, which are re- 
 gulated in price more by folid money, for they 
 have little paper money, are more flationary and 
 regular in their flu6luations. They are more free 
 from Cartings lince the peace, and were nearly at a 
 rate, compared with the Britifh funds, of the caili 
 money price, to the paper money price. May not 
 the violent agitations of property, and the ad- 
 vanced prices of individual comforts, occaHoned 
 by paper money under the rellraining law, even 
 in the prudence of the Bank Directors, become 
 jn danger of undermining or varying that opinion, 
 upon v/hich the whole fuperfirufiure is eredled 
 and ftands ? In the contract of political govern- 
 ment, there is with the people an implied prin- 
 ciple of right to a part of the property, in order 
 to- afford protection and fecurlty to the remainder. 
 But that government, which takes a great part, 
 and by any meafure, either diredl to itfelf, or dele- 
 gated to others, renders the value of the re- 
 mainder precarious, may thereby lead to its own 
 inftability. 
 
 The fpirit of fpcculation in a commercial coun- 
 try leaves no effe6lual limitation in the unwil- 
 lingnefs of the holder of Bank notes. Adven- 
 turers arc always to be found to go any length
 
 { 55 ) 
 
 with fi(9:Itloiis money, or difcounted bills. At the 
 fubfcription to the loyalty loan they were under 
 the neceffity of Ihutting the Bank doors againft 
 the frefh crowds of fubfcribcrs ; and, before pay- 
 ment, it was above eighteen per cent, difcount. 
 A variety of lifts, differing but little in price, 
 were prefented for the laft loan ; but which could 
 not be paid up without coming to a like difcount. 
 Lately the difference of the price of flock for 
 money, and the price for time, was no lefs than 
 one and three quarters per cent. During the ac- 
 count, flocks fell above ten percent, which mufl 
 have ruined many individuals. The difference is 
 occafioned by buying with ready money, and 
 felling at the time-price for the account. In the 
 midft of fuch diflrefs for real money, many pur- 
 chafers could not have gone into it fo fuddenly 
 and eafily without Bank paper obtained for dif- 
 counted bills, to which the circumflance of the 
 account day coming round, when the tranfacSlioii 
 ended, before the bills became due, is particularly 
 favourable. The inducement was ^reat to the 
 fpeculators ; for while they paid five per cent, to 
 the Bank, they fold the ftock on time fo as to 
 lend it at above thirty per cent. In this manner, 
 people of credit, in difcounts, were induced to 
 join the gamblers. At all times it is believed 
 more bills arc prefented to the Bank for difcount 
 than accepted of; and that the prudence of the 
 Bank Diredlors in circulating notes by difcount- 
 ing is, at no time, limited by the unvvillingnefs of
 
 ( J6 ) 
 
 fiich adventurers to bold notes. By the joint fc* 
 curities, in dilcounted bills, lolTes, ariling on fpe* 
 culations with the money, are fhifted from the 
 banks on the public. 
 
 Banks are not only thus relieved from the con* 
 fequences of fpeculation, arifing from money ob- 
 tained upon difcounted bills ; but in the a6t of dif- 
 counting, there is an advantage to the Proprietors 
 and Diredors, or a patronage in banks to fa- 
 vourites, which may be, and no doubt is, attended 
 with confequences extremely pernicious to fociety, 
 or to the fair trader. They may take their notes 
 to themfcives, dirc6tly or indiredly, in the firft 
 place, or may difcount the bills of one fet of peo- 
 ple, and TcjecSl the bills of another. As, they can 
 raife or diminilh prices, by withholding, or iffu- 
 ing, paper, they may alfo in difcount enable one 
 fet cf people to purchafe, and, in fome degree^ 
 withhold another from purchafing ; or they may 
 become purchafers and fellers themfelves, accord- 
 ing as they have regulated or affe6ted prices, or 
 arranged the facility of competitors. So long as 
 their paper was fubjecl to the refponfibility of pub- 
 lic opinion, this might be a patronage due to their 
 cre(?it refpedlively. But now that paper and ink 
 is, by an a5; of power, rendered into a mint,- 
 from which they may throw money to any extent, 
 credit is out of the queflion, and all capital is no- 
 thing in oppolition. How is individual capital to 
 bear up againfl the influence of paper circulation^ 
 which has no control, or exill again ft the opera-
 
 ( 57 ) 
 tions of a banking company, which, the one day, 
 could not condu6l its own affairs within the 
 rules of the confiftency or prudence required from 
 individuals ; and wliich, by the adl of the Legida- 
 ture, is enabled, in a few days after, to lend to 
 Government fifteen millions of money? Such a 
 JU)an is from a prediledlion to Government in the 
 Bank adminiftration ; and if we purfue the fame 
 facihty of predi!e6tion towards the Dire6lors them- 
 felves, towards the Proprietors, or towards favour- 
 ites of Directors and of Proprietors, in the extent 
 of their refpe<5live influence with the adminiftra- 
 tion of banks, and calculate the efFeds of luch 
 a fum of ficSlitious money, dire6led againfl true 
 capital and fair trade, what may not the magni- 
 tude of the mifchief amount to ? The ordi- 
 nance brings the ftatute-book into inconfiften- 
 cy. In one chapter, the wretch, to whom a 
 fhilling is necefTary, perhaps to his exiflcnce, is 
 declared a felon, for throwing upon fociety a fic- 
 titious fliilling or note ; in another, a favourite 
 company is privileged to throw millions, againll 
 the influence of which, in every affair of life, no 
 capital, nor no virtue, can give protedlion, either 
 to the community, or to the individual. The 
 blame, in luch a meafurc, cannot with juflice be 
 imputed to banks ; but it mull reft with thole 
 with whom it originated, and the demerit of it 
 with thofe from whofe authority it emanated. 
 
 To attack the practice of difcounting bills in 
 this country, may be reckoned prefumptuous ; and 
 
 H
 
 ( 58 ) 
 
 ^ifcounts are obtained in Bank notes. Difcounts 
 made with inconvertible paper money may hoWf 
 ever be illuflrated. Commerce, in the limple and 
 pure commercial flate of fociety, in any country, 
 Gonfifls in the producHiion and confumption, or 
 of the grower or maker, and of the confumer or 
 tifer of commodities, with the intermediate per- 
 fon who tranfports the articles from the one to 
 the other, where that is necelTary. Without pro- 
 duction there can be no confumption : without 
 confumption there is no occafion for production or 
 manufadlure : without both production and con- 
 fumption there is no room for tranfportation. 
 The three naturally adjuil themfelves to each 
 other ; and the harmony of the whole confiils in 
 keeping each other conflantly employed, which 
 forms the moft perfeCl commercial ftate. 
 
 Confumption upon found principles will always 
 carry along with it the other two ; but the other 
 two evidently will not always carry confumption. 
 The chief point in the fyftem, therefore, is to keep 
 the confumption right. The confumer needs no 
 artificial means of ftoring ; it is fufficient for him 
 to be fupplied. Storing is attended with an ex- 
 penfe ; and the lefs he llores, he can ufe the more, 
 with the fame revenue or income ; at leaft, as 
 much more as will be equal to the expenfe of 
 floring. The employment in both produCtioi^ 
 and tranfportation confifls in the regularity of 
 the confumption. The producer can have nei- 
 ther delire nor intereil to ftop the coqfumption o? 
 I
 
 ( 59 ) 
 
 life of his own article ; he naturally wiflies to be 
 clear of it, in order to make way for the fucceed- 
 ing articles. The tranfporter ought to have no 
 improper artificial means of impeding or inter- 
 rupting the connexion between the other two ; 
 and the more he tranfports, the more profit he is 
 entitled to. 
 
 It is inherent in the exerclfe of capital for fo- 
 cietieS) companies, or the individual who pofleflcs 
 it, to ufe it at pleafure, or to the befi: advantage ; 
 and no reflraint can be exercifed upon the capi- 
 talifis, without infringing the principles of pro- 
 perty. But, on this arrangement, let an artificial 
 and temporary capital, fuch as bills difcounted with 
 inconvertible paper money, be introduced ; and 
 let the ufes each of the three charadlers may turn 
 it to be examined. The confuraer has no ufe 
 for it, or ought not to be entitled to it, becaufe he 
 has no right to ufe more commodities than he can 
 pay for. The producer will ufe it, in withhold- 
 ing his articles, and thereby difl:reffing the con- 
 fumer, and, of courfe, limiting both the confump- 
 tion and tranfportation, which ought not to be 
 indulged. The ufe the tranfporter would make 
 of it, is obvioufiy to retain the commodities in his 
 pofieflion ; and to bring the other two dalles into 
 his power, either by flarving the confumption or 
 clogging the produ6lion, in order that he may 
 make the moft of both in the prices. The lefs ar- 
 tificial accommodation there is, the more dirc<£lly 
 
 n 2.
 
 ( 6» ) 
 
 will the commodity reach the confumer, and the 
 more moderate will the price be. 
 
 Such difcounts would, therefore, not appear to 
 be beneficial for the purpofes of fociety, either in 
 the hands of the producer or of the confumer, or 
 necelfary either to their fuftenance or multiplica- 
 tion. They appear to have been invented in a more 
 advanced ftate of fociety by and for the accom- 
 modation of the middle clafs of men in the com- 
 mercial ilate. By means thereof, they, without 
 capita], or beyond their capital, become proprie- 
 tors in place of tranfporters ; and by receiving 
 or withholding from the other two claires, prac- 
 tife upon their neceffities, in obtaining from them, 
 by means of higher and lower prices, an addi- 
 tional profit, which othervvife the producer or 
 confumer would not give, fufficient to pay the 
 banker for the ufe of his paper. Sometimes the 
 tranfporter is fortunate in his fpeculations upon 
 prices ; fometimes unfortunate. From the Ihort- 
 nefs of the time for which bills are difcounted, it 
 affords but a precarious relief to merchants, and 
 is calculated more favourably to the banker's pro- 
 fit. In every event, the banker muft be paid the 
 difcount for the ufe of his paper, like the keeper 
 of the gaming-table. At length, in the frequency 
 of the tranfadiions does banking abforb, in a great 
 degree, the floating wealth of the country, by 
 a fpecics of labour unproductive to fociety. 
 
 The produdlive and confuming clafles confli-
 
 ( 6i ) 
 
 tute the eflential parts of fociety : the firi^, in the 
 produ6lIon of vveaUh ; and the fecond, in the dif- 
 chargc of functions neccflary to Ibciety, which 
 compenfatcs the indultry of the producer and ma- 
 iiufa(Slurer. The middle clafs is elfential to both 
 the other two. The producers and confumers 
 cannot be too much increafed, for they fupport 
 themfelves, while the tranfporters or middle clafs 
 may become too numerous, for they are fupporte4 
 by the other two. So far as ferves to the tranfporta- 
 tion of commodities, the middle clafs is abfolutely 
 neceflary to fociety ; but fo far, as, by means of 
 bills difcounted with fictitious paper, they are 
 enabled to become proprietors, and to work upon 
 the neceflities of the other two clafTes, in detain- 
 ing commodities, they become a burden upon 
 the produ6live and ufeful labour, at the expenfe 
 of the other claffes. 
 
 The circumftances are not altered in a country 
 conlidered as a depot to the merchandife of other 
 countries in tranlit. The commodity is always 
 liable to the expenfes attending tranfportation ; 
 and every fpeculation in it upon paper money as 
 iitSlitious capital, may be the more pernicious, as 
 it is checked in the confumption of countries un- 
 der the influence of real money. When it is 
 conlidered, the paper given in dilcount of bills is 
 not convertible into money in this country, nor 
 current in foreign countries, it is difficult to con- 
 ceive in what manner fuch Bank notes can afford 
 any tranlit to foreign commodities, through this
 
 i 6± ) 
 
 country, more than the bills difcounted. It wilt 
 alfo be a difficult matter to point out forciga 
 commodities pafling in tranfit by means of the 
 extent of paper money, under the efFe6l of the 
 reftraining law, which would not have paiTed, if 
 that law had nOt exifted. If in the internal eco- 
 nomy of the nation, paper money, under that law, 
 is a diftrefs, it does not appear to afford any ad- 
 vantage in the exterior relations. 
 
 Complete perfuafion is, perhaps, not io be 
 found in reviewing the reafons, fiated by Minif- 
 ti'y, for fuch a violent meafure as the reftraining 
 law, either at the time it commenced, or at the 
 different renewals of it iince. The reafon firft 
 affigned was, the Bank would be deprived of the 
 means of fupplying cafh neceffary for the preffing 
 exigencies of the public fervice. The reafons af- 
 ligned for the renewal were the folidity and re- 
 fponiibility of the Bank ; that the liate of the 
 exchange proved no influx of bullion from 
 abroad ; that the country banks would make a 
 demand on the Bank of England for gold ; and 
 that it was better to continue the refiri6\ion too 
 long than too fhort, or to remove it too foon. 
 - The legiflative deliberations upon public mea- 
 fures generally carry with them to the public con- 
 vi<5\ion. The publicity eflablifhes public confi- 
 dence in them. In that the public opinion is 
 more perfuaded than commanded to obey the 
 laws fo enatSted. But few meafures of fuch con- 
 fcquence appear to have pafled their deliberation
 
 ( 63 ) 
 
 with Id's pcrfuafion to the public, or with lefs ex- 
 amination by the Legillator, or rca Toning upon 
 the effects, than the reftraining hiw has perhaps 
 done. And it may with many ftill remain in 
 doubt, whether the meafure lias been lupported 
 upon the principles ftated, or rells upon reafons 
 of flate not mentioned. 
 
 It is not to be difpnted the exigencies of the 
 public fervices had a preferable claim to the ufe 
 of gold, if it was neceflary for carrying them on. 
 Such might afford a reafon at the time for ih'iz'mg 
 the gold at the Bank, or laying the gold in the 
 country under requifition to the extent neceffary 
 for the public fervices. But it does not appear 
 fufficient for eflablilhing a lafting fyllem fo be- 
 neficial for thq Bank, and attended with the 
 confequences already enumerated to the commu- 
 nity. The folidity of the Bank of England has 
 been fince affumed without inquiry. Jt is to be 
 hoped the folidity of the Bank is as great as mat- 
 ter of opinion can render it. It has, however, got 
 into a fecret connexion with the Government, 
 which former Legiflatures held illegal, as capable 
 of much abul'e, and leading to dangerous confe- 
 quences. It has been fhewn to be poflible for 
 that connexion in the circumftances to be carried 
 fo far with paper money as to bring the credit of 
 both into difrepute — even to defiroy that opinion 
 upon which the folidity of both is founded and 
 fupported ; the removing or withdrawing of which
 
 ( 64 ) 
 
 by the public may prove fatal to the whole fa- 
 bric. 
 
 If there is any truth in the preceding remarks 
 upon the courfe of exchange with foreign coun- 
 tries, and fhevving how a favourable ftate of ex- 
 change maybe countera6led by theexceffive circu- 
 lation of paper money, it then becomes in the power 
 t)f the Dire6lors of the Bank of England, under the 
 reflraining law, to hold the courfe of exchange at 
 the point when gold would juft begin to flow into 
 this country, without allowing it to enter. Emo- 
 lument to the Bank of England is a powerful mo- 
 tive for doing fo, which would be diminifhed as 
 gold enters. The profit of the Bank lies in the ex- 
 tent of the paper ifl\ied, which keeps the gold from 
 entering the country from abroad. If the govern- 
 ment argues, as gold does not come from abroad, 
 ihe paper muft be prote6led by power ; by rea- 
 foning in this circle, the paper will have no end, 
 for gold cannot return till the exceffive paper is 
 done away. In place, therefore, of the ftate of 
 the exchange affording a reafon for continuing 
 the retraining law, it would appear to afford the 
 beft reafon for difcontinuing it. The country 
 banks will, upon the expiring of the reflraining 
 law, be deprived of the fhelter of the Bank of 
 England paper, and thereby be laid open to the 
 rcfponlibility and criterion of public opinion, and 
 confidence in the extent of their circulating paper, 
 'l^liey will be under the neceflity of diminifhing
 
 ( 65 ) 
 
 the quantity of their paper in circulation, in the 
 fame manner as the Bank of England. Yet it 
 does not follow they will run on the Bank of 
 England for gold. That will depend upon the 
 degree of public confidence in their paper. The 
 notes of the Bank of England being alio reduced 
 in number, the country banks will have that in- 
 ftrument lets in their power to call for gold from 
 the Bank upon thefe notes. Lefs paper money 
 being afloat, the greater will be the refponfibility 
 annexed to it ; and of courfe, the more confi- 
 dence will be placed in it by the public. Real 
 money being, through the diminifhed paper, re- 
 llored to its proper value, gold will begin to flow 
 back from the continent ; and things in general, 
 as to price, will begin to recover their relative 
 and natural fltuations. If fuch fhall be the event, 
 the reverfe of the general concluflon will be the 
 true rule, that it is better to remove the reftric- 
 tion too foon, than to continue it too long. Hap- 
 pen when it will, the over-extended fpeculation 
 of individual adventure in paper prices mufl 
 bring with it many failures. In every event the 
 -tranfition from the paper extenflon of money 
 into real money mud occaflon great dlilradion 
 in commercial affairs in general. But the fooner 
 the evil is corredicd, the lefs will be the extent of 
 it : and the indufiry and fpirit of the country will 
 again begin to be replaced on the footing of its 
 true interclt in the competition with other na- 
 tions. 
 
 I
 
 ( 66 ) 
 
 If, on the other Ude, the fit period for remov- 
 ing the reflriftion, which fo evidently unhinges, 
 deranges, and renders unftable, every commercial 
 and relative principle, conne6led with price or 
 money, is not yet come ; when will it come ? 
 or in what ftate of public affairs will it be found ? 
 Where is the refting point ? It has not yet been 
 found in war nor in time of peace. What ex- 
 perience is there to fhew that period ? or what 
 theory is there to lead to it ? Surely it cannot be 
 in extended commerce, becaufe the export and 
 commerce of the country is reprefented to be 
 greater than it ever was. The years of fcarcity 
 are pail, and corn has funk to its ordinary price. 
 The value of the corn formerly brought from fo- 
 reign countries is paid, becaufe the exchange has 
 been at par fince. The period, which neither ex- 
 perience nor theory can point out, is not to be 
 expelled ; at leaft, it is not to be reckoned upon, 
 nor waited for. 
 
 The Bank of England has not appeared to de- 
 mand the continuation of this reflraint in the after 
 renewals. On the contrary, it has been repre- 
 fented for the Bank, the Directors were willing 
 to make arrangements to make payments in gold; 
 or, in other words, to diminifh the circulation of 
 notes. This was evidently the language of fitua- 
 tion, more than of delire or of intereft. A mea- 
 fure attended with fo much gain to the Bank Pro- 
 prietors will not be voluntarily abandoned by the 
 Dire6lors« The alternative left to the Bank Di-
 
 ( 67 ) 
 
 re6lors to pay when convenient is nugatory : and 
 is it to be expe6ted any penfioner will complain 
 of his penfion, and dcfire the contribution of fo 
 much wealth to be withdrawn from him ? The 
 meafare muft be impofed upon the Bank by the 
 fame authority by which the reftridion has been 
 enforced upon the public. It arofe in the neceffi- 
 ties of the Bank, and what with any other cora- 
 pany would in law or morality have conftitutedan 
 acSi of bankruptcy. Until the Order of Council 
 paffed into a law, the Directors were under no 
 ncceffity of obferving it. But it was eafy to obey 
 the mandate petitioned for ; lince the Bank Di- 
 re61ors have been at liberty to abandon it, upon 
 making the prcfcribed communications of the in- 
 tention to Parliament, which has not been done. 
 Indeed, the Directors have not alked the conti- 
 nuation publicly ; but the Miniftry has done it 
 for them: which fuggefls the inquiry, What be- 
 nefit the meafure affords to ftatefmen ? 
 
 The exceilive circulation of paper money, 
 founded upon this meafure of authority, or of 
 force, is not necefTary in the internal economy of 
 the country, becaufe the extent of it, applied in 
 that way, evidently did not exceed feven millions. 
 It may, perhaps, in the depreciation of money, 
 render the exiffing taxes or burdens of the Govern- 
 ment more eafily paid by the fubje6l ; and it may 
 make them appear lefs and lighter than in fa6l 
 they really are. It may, perhaps, enable the Bank 
 Directors to incrcafe the loans to Government, as 
 
 I 2
 
 ( 68 ) 
 
 far as Government may carry the paper into the 
 circle. And it may, perhaps, keep the price of 
 the funds floating, at a higher point than they 
 otherwife would be at, which may enable Go- 
 vernment to make loans at a higher rate. 
 
 Admitting fuch to be the efFedl, it does not ap- 
 pear to counterbalance the evils ariiing from the 
 excefs of paper money already enumerated. The 
 iirft is only a numerical deception, which ought 
 never to be permitted to enter between the Go- 
 vernment and the fubjecl ; left, like deception in 
 all other cafes, it Ihould diminifh confidence, and 
 weaken the bond of political union and fupport. 
 The burden of Government mufl be fupported by 
 the people; and although the taxes are colle6ted 
 in numerical money, rendered more acceffible by 
 the diftribution of paper mone}'-, the weight of the 
 fyftem is not thereby alleviated or removed. Al- 
 though the increafed quantity of paper money in 
 circulation, renders the demand numerically more 
 acceffible to fome individuals, in proportion to 
 the increafed quantity, it makes it more burden- 
 fome to others with a fixed income ; and neither 
 enriches the community nor the individual by an 
 increafed quantity of labour or value. It greatly 
 adds to the burden of capital, for manufacture 
 and commerce, in the payment of intereft to the 
 banks, for the ufe of that paper, in increafing 
 other per centages, and in the diminution of the 
 comforts accellible to individual revenue, as be- 
 fore obferved. But of all things, it is the moft
 
 ( 69 ) 
 
 injurious to the community in the expenditure of 
 the Government. The increafed or forced circu- 
 lation of paper money mufl be put an end to, 
 fooner or later, by the Legillature, left it ope- 
 rate the ruin of both. 
 
 In the interim Government is contracting debts, 
 and expending the money upon the fcale of dimi- 
 niflied value, through the exceffive circulation of 
 paper; and we, or pofterity, muft hereafter repay 
 it upon the enhanced fcale of true value, if ever 
 it is to be repaid. Hence, borrowing at fifty per 
 cent, for inftance, of the prefent currency dimi- 
 nilhed in value, by increafed circulation of paper, 
 in one third at leaft, it vi'ill be equal to no more in 
 the expenditure than 33/. i2f. of what the nation, 
 in the contradl, engages hereafter to pay 1 00/. when 
 the paper circulation is diminifhed and corredled. 
 In the general depreciation of money, in thefe 
 circumfiances, capital meets with a return nume- 
 rically increafed, except in the dividends on the 
 funds, which are always the fame. Real and perma- 
 nent capital muft, therefore, in fome degree, be di- 
 verted from the funds, and the terms of public loans 
 be made fo much the worfe. In every loan there is 
 a certain lofs to the public in the expenditure, ex- 
 a6lly in proportion to the diminifhed value of 
 money in paper circulation. Is it to be fuppofcd 
 pofterity will be difpofed to pay fuch contrac- 
 tions, if long pertifled in, without examining how 
 they were contra6tcd ? And when they do fo, 
 
 3
 
 ( 70 ) 
 
 whether is fuch inquiry moft likely to hold out 
 any permanent foundation to public credit for the 
 prcfent; or to lead to an apprehenfion of public 
 inlolvency hereafter, if not to revolution ? Is it 
 impoffiblc for llatefmen to exceed the powers of 
 the ftate, or to outdo the patience of the people, 
 in the weight of meafures ? 
 
 Under fuch circumftances it would appear 
 ftatefmen could attach little merit to themfelves in 
 obtaining advances from the Bank of England pri- 
 vately, or rather from the people through the Bank 
 paper, in place of coming forward publicly with 
 loans, or a demand of diredl contributions. The 
 Bank Diredlors, however well difpofed, or power- 
 fully induced by gain, to fuch accommodations, 
 have limits under the circulation of paper money. 
 They will expe(5l one day to be repaid by Go- 
 vernment, fo as to be enabled to repay their paper 
 to the public, which muft be through public loans. 
 The ftatcfman muft then come forward with his 
 wants, and the lituation of the public purfe, 
 when, moft probably, he will find his condition 
 is not improved in the delay. Deferrences in 
 political, as in common life, bring difficulties 
 and diflrefs accumulated. When the Ipans come 
 at laft to be made, they are aggravated to the 
 community in the expcnfe of the private ac- 
 commodation made to the ftatefman. And in 
 the private connexion between the Government 
 and the Bank Dire6lors, by which Government
 
 ( 71 ) 
 
 can raife money, to the extent offo many millions, 
 may it not be inferred, the Legiflatiire has, in the 
 effect of the retraining law, abandoned, or at 
 lead fulpended a prior: one of the moil important 
 conflitutional controls upon the executive go- 
 vernment ? 
 
 The depreciated ftate of money, through paper, 
 may perhaps make the price of the funds appear 
 higher than would be the cafe without paper 
 money. If money could be borrowed for the 
 public upon that fcale, and expended upon the 
 fcale of real money, there might, in this particu- 
 lar, be an economy to the flate. But as long as it 
 is expended upon the fame fcale upon which it is 
 borrowed, nothing can be gained, and in the after- 
 payment there is a. certain lofs, equal to the prefent 
 depreciation of money. So long as there is occa- 
 fion for loans, and while the money is difburfed 
 upon the fame fcale, the public can gain nothing 
 in the artificial elevation of price through paper 
 money. Neither can the Government lofe by 
 borrowing upon the fcale of real money, or true 
 capital, at a deprefTed rate, becaufe the quantity 
 of human force difpofable by the loan, or the 
 objedts to be effe(51cd by it, in war or peace, will 
 be proportionally greater. The lower the price of 
 the funds, tlic more powerful will be the opera- 
 tion of the finking fund in reducing the public 
 debt, which is the only objeft of liope left to 
 look forward to, even in idea, 'for the abolition
 
 ( 72 ) 
 
 of fuch a national burden ; while the loans exceed 
 the payments, the redemption fund is only a 
 fpedlre, which may hereafter be felt. Bolflering 
 the price of the funds by fi6iitious money, and 
 applying the redemption fund, is ading iricon- 
 fiflently, and juft fo much impedes or defeats the 
 obje(Sl of redemption : it fo far undoes with one 
 hand what the other does, and is what mijrht be 
 remedied in a great degree, by the Legiflature 
 leaving the circulation of paper money to ftand 
 upon its own merits. 
 
 The people, who fupport every burden of the 
 Government, and of the Adminiltration, cannot 
 long be amufed or deceived. The weight can reft 
 only upon them : it muft loon teach them what it 
 is, and where it reils. The ftatefman who at- 
 tempts to deceive them will be dete6led in the 
 burden. Their honeft refentment maybe mea- 
 fured by the degree of deception. He will then 
 feel the true policy of the ftatefman is candidly 
 and honeftly to exhibit to the people the burden 
 of their political fyftera, and to require of them to 
 meet and provide for it ; in place of pradiftng 
 any difguife or deception upon their blunt under- 
 ftanding. Whether they fhall continue to carry 
 the load after coming to reflev9. upon it, or to 
 throw it down, he will ftand acquitted, at leaft 
 from the tranfgreflion of his predeceftbrs. 
 
 It is foreign from the prefent objc61: to defcend 
 to particulars ; although, it muft be obfervcd, the
 
 ( 13 ) 
 
 objedl of the remarks has been in fome degree 
 obviated in the fyftem now adopted, of fupplying 
 the expenfe of the pubhc fervice by Exchequer 
 bills, in place of funded loans, which without 
 doubt is the mod equitable to the public, and a 
 great improvement in the finance, if they fhall 
 be afterwards liquidated without loans. In thefe 
 the Government will pay or mortgage no more 
 than adually it receives. It will be better to fub- 
 mit to a difcount on Exchequer bills, than to fund 
 at forty or fifty per cent, difcount upon the con- 
 folidated fund. It is, however, liable to this ob- 
 jedion, the opulence of the nation cannot be 
 carried into it. The underftanding and manage- 
 ment of Exchequer bills is confined to the capital 
 and the neighbourhood. National ftock. is now 
 underftood by mod people of money, and appli' 
 cable to the capital of the whole nation, if not of 
 the whole world, at leaft fo far as the national 
 credit extends. The extent to which Exchequer 
 bills can be carried, rauft therefore be more limited 
 in proportion. In fo far as Bank notes are carried 
 into circulation upon found principles, nothing 
 but the want of difcernment in the pepple, or a 
 blindnefs to their own profit in the intercfl upon 
 Exchequer bills, can prevent them from being 
 carried to the fame extent ; although the necelli- 
 ties of Government may come to exhauft the cre- 
 dit of both. 
 
 Money, in whatever form or chara(5ler, is fo 
 
 K
 
 ( 74 ) 
 
 defirable an ohje(!^ to all, the perfon whoie opi- 
 nion may tend to diminifh the quantity of it, and 
 of courfe the accefs to it, mufl fubmit to prepof- 
 feffions in public opinion againfl him. It is not 
 every one who will allow himfelf to follow an 
 analysis of the fubjedl, or to inquire into the 
 confequences ; or in fuch a fubje(5l be willing to 
 be undeceived. And flill fewer who will allow 
 themfelves to be perfuaded of the paradox, the 
 more paper money is afloat, the more is diminifhed 
 the gratification ariling from his fixed revenue. 
 Nor will it be ealily believed, the Britifh Legifla- 
 ture, compofed of fo many able and enlightened 
 individuals, could be blind to the efFe61:s of fuch 
 regulation, if it fhall truly carry fuch effe&s. 
 TSIeither will it be admitted, that if they faw fuch 
 efFe6ls following the meafure, they could want 
 patriotifm or virtue enough to reje6l it : agreed. 
 
 But while the force of thefe obfervations is 
 felt on the one hand, reafon and judgment feem 
 to prefs irreliftibly on the other towards fuch 
 conclulions. In order that thefe conclufions may 
 appear connected or unconnected with the pre- 
 mifes, the Author has fubraitted the detail of his 
 reafoning from the fa6ls and principles to the 
 fuppofed effects. Opinion vv'ill decide for itfelf. 
 If the fadls and principles he has aflumed are not 
 true, or his dedu6lions from them erroneous, his 
 opiaion will have no bad efFecls. If there is any 
 truth in his opinions, they at worfl can be pro- 
 I
 
 ( 75 ) 
 
 du6live only of inquiry and remedy. His objeft 
 and views are confined entirely to the meafure of 
 paper money, as prote^ed by Parliament, ab- 
 flra^edly from individual charaaer, public or 
 private ; and that only fo far as to fubmit it to the 
 difcuffion of the tribunal, before which all politi- 
 cal adminiflration is liable to come, and by which 
 every thing truly great ftands or falls, viz. the 
 attention of public examination and opinion. 
 
 THE END. 
 
 K Z
 
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 tra61:ed and tranflated from Mr. GENTZ's Anfw^p 
 to Mr. HAUTERI VE. Price as. 6d.
 
 Neiu Books printed for John Stockdale. 
 
 A GEOGRAPEirCAL, HISTORICAL, and POLITF. 
 CAL ACCOUNT of GERMANY, HOLLAND 
 the NETHERLANDS, SWITZERLAND, ITA- 
 LY, MALTA, &c. with a Gazetteer of the princi- 
 pal Places therein, and ftatiftical Tables, exhibiting 
 a View of all the States of Europe : principally .com- 
 piled and tranflated from the German. In one 
 large Volume royal 4to. on fine wove Paper, illuf- 
 trated with twenty-four Plans of fortified Places, 
 and a large three-flieet travelling Map of the Coun- 
 tries defcribed, 4 feet 6 inches, by 2 feet 9 inches. 
 Price 2I. I2S. 6d, 
 
 HISTORY of the CAMPAIGNS in HOLLAND, of 
 iJ^^^y^ars 1793, 1794, and 1795, by ROBERT 
 BROWN, Corporal in the Coldftream Guards : il- 
 luftrated with a Map. In one Volume 8vo. Price 
 5s. 6d. 
 
 A COLLECTION of TREATIES between GREAT 
 BRn^AIN and other Powers, by GEORGE CHAL- 
 MERS, Esa. F. R. S. S. A. In 2 large Vols. 8vo. 
 Price il. IS. or on fine Paper, il. 4s. 
 
 HISTORICAL SKETCH of all the INVASIONS or 
 DhlSCENTS upon the BRITISH ISLANDS, from 
 the Time of William the Conqueror to the prefent. 
 Illufirated by a Map of the United Kingdom of 
 Great Britain and Ireland, and the circumjacent 
 Coafts, on which every Attempt is delineated. Price 
 2S. 6d. 
 
 HISTORY of the TURKISH or OTTOMAN EM- 
 i'lHE, from its Foundation in 1300 to the Peace of 
 Belgrade in 1740 : to which is prefixed an hillori.- 
 cal Difcourfe on Mahomet and his Succelfors. 
 Tranflated from the French of Mignot, by A. 
 HAWKINS, Esq. In 4 Vols. 8vo. Price il. 6s, *
 
 UNDER THE PATRONAGE OF HIS ROYAL HTGHJfESS 
 
 THE DUKE OF YORK, 
 
 COMMANDER IN CHIEF, ScC. &C. &C. 
 
 In the Press, and speedily -Joill he pubUshed, ly Suhscrlpllon, in 
 
 Three Volumes, Quarto, consisting of nearly 2000 Fages 
 
 of close Letter-press, and a Folio I'olume of 
 
 26 large Maps and Plans, 
 
 PRICE, TO SUBSCRIBERS, 5l. 5S. IN BOARDS J 
 
 A 
 
 PRACTICAL SYSTEM 
 
 OF THE 
 
 . ART OF WAR. 
 
 TRANSLATED FROM THE GERMAN OF 
 G. VENTURINI. 
 
 JLontJon : 
 
 PRINTED FOR JOHN STOCKUAI.E, PICCADILLY: 
 
 And Subscriptions received also by John Cooke, Ormond ^ay, Dublin. 
 
 (tr The above work is recommended in the strongest terms by the • 
 Kino- of Prussia, the Archduke Charles, and many of the first 
 mihtary characters in England, as well as on the Contment; and the 
 Prussian General Templehoff, the well-known author ot the Mihtary 
 History of the Seven Years War, has published his opinion highly 
 in its favour. 
 
 Mr. Stockdale particularly solicits the early subscription of those 
 Officers and Gentlemen who wish to promote a publication ot such 
 great utility and importance to the British army and nation. 
 
 It is already in the press, and the First Volume will be ready for 
 delivery in the month of May, price iL ys J>d- the Second soon 
 afterwards, at the same price 5 and the Third wdl follow as soon as 
 possible, with the folio volume of maps and plans, price 2/. 2S. 
 
 * No money will be taken until the delivery of each volume.— 
 A List of Subscribers will be printed. 
 
 Piccadilly, 2<^ February 1803. _______^_ 
 
 "^^ S, GosNELL, Printer, Link Queen Strec, Holborn. 
 
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