THE UNIVERSITY 
 
 OF ILLINOIS 
 
 LIBRARY 
 
 332 
 B875 
 
 (/■ 32 
 
 '•'li
 
 lar;!
 
 CURRENCY FALLACIES 
 
 REFUTED, 
 
 PAPER MONEY VINDICATED. 
 
 AUTHOR OF " AN ESSAY ON MONEY," AND " AN ESSAY OS 
 THE STANDARD AND MEASURE OF VALUE." 
 
 i 
 
 " If this country has money in abiindaace, it will have all the trade from the 
 whole world ; and if you make money very scarce, the trade will go to other 
 countries.''— N. M. RoxHstHiLD, Esq. Evidence on Bank Charter, 4947. 
 
 LONDON: 
 HATCHARD AND SON, PICCADILLY. 
 
 1833.
 
 LONDON : 
 
 PRINTED By STEWART AND CO. 
 
 OLD BAILEV.
 
 PREFACE. 
 
 While this little work was going through the 
 press, the debate took place on Mr. Attwood's 
 motion (April 23, 24, and 25,) " That a Select 
 Committee be appointed to enquire into the 
 state of general distress and embarrassment 
 which presses upon the various orders of the 
 people, and how far the same has been occa- 
 sioned by the operation of the present Monetary 
 System." Lord Althorp, to get rid of the 
 latter clause, proposed as an amendment the 
 following resolution : " That it is the opinion 
 of this house, that any alteration of the Mone- 
 tary System of this country, which would have 
 the effect of lowering the Standard of Value, is 
 highly inexpedient ;" giving it to be understood 
 that a Committee to enquire into the state of the 
 distress, independent of its presumed connec- 
 tion with the currency, might not be objected
 
 VI PREFACE. 
 
 to; and ultimately proposing such a committee. 
 Mr. Attwood's motion was lost by a majority 
 of 192 (139 being for, and 331 against it), and 
 Lord Althorp's amendment being put as a 
 substantive motion, was carried by a majority 
 of 255 (304 being for, and 49 against it). 
 
 It is a common opinion, that the currency 
 question is set at rest for the remainder of this 
 session, if not during the existence of the pre- 
 sent parliament : but there is nothing in Lord 
 Althorp's resolution to preclude its immediate 
 re-consideration. Suppose that Mr. Attwood 
 had moved " for a Select Committee to enquire 
 into the state of general ill health which pre- 
 vails among the various orders of the people, 
 and how far it has been occasioned by the late 
 changes of the weather f to which Lord Althorp 
 proposed as an amendment the following reso- 
 lution : " that it is the opinion of this house, 
 that any alteration of the thermometer of this 
 country, which would have the effect of lower- 
 ing the standard of heat, is highly inexpedient :" 
 is there any one who would say, that those 
 violent changes from heat to cold, or that 
 poisoned state of the atmosphere, to either of 
 which in the opinion of many persons the pre- 
 sent influenza is attributable, might not be 
 enquired into as its supposed cause, with the
 
 IMJF, KACK. Vll 
 
 view of discovering a preventive or a remedy — 
 because the house was pledged to this reso- 
 lution ? The two cases are identical. If the 
 degrees on the scale of Fahrenheit's thermo- 
 meter be truly adjusted, 212° will always 
 indicate the heat of boiling water : if the quan- 
 tity of gold and silver in the coinage of our 
 pound sterling be truly adjusted, 32.y. or 33^. 6d., 
 will always indicate the value of a quarter of 
 wheat. That the standard of value shall not 
 be altered, needs no more a resolution of the 
 House of Commons to affirm it, than the standard 
 of heat ; and with reference to the proposed 
 enquiry, it is of no moment whatever. All that 
 parliament can do, is to provide that our pound 
 sterling, and its fractional parts, shall be as 
 .true and equal an indicator at all times, and 
 under all circumstances, of that which it pro- 
 fesses to measure — value, as the scale of the 
 thermometer is of that which it professes to 
 measure — heat: to secure which, a standing 
 committee for the supervision of our coin, is 
 one of the objects proposed for the consider- 
 ation of parliament in the following pages. 
 
 Lord Althorp did not gain his victory over 
 Mr. Attwood by this resolution, nor by stating 
 it as his conviction, that the motion went " to 
 destroy the foundation on which contracts de-
 
 Vlll PREFACE. 
 
 pended, and to set them afloat — to place in the 
 hands of an irresponsible body the power of 
 saying how much every man in the country 
 should be worth — of impoverishing one set of 
 men and enriching another ^ — ^in short, of in- 
 troducing indescribable confusion into all the 
 transactions of society," which are the specific 
 charges brought by his Lordship against it : for 
 if the standard of value is not altered, how can 
 the foundation of contracts be destroyed ? if 
 the issue of paper money is vested in parlia- 
 ment, how can it be said to be placed in the 
 hands of an irresponsible body ? and if the 
 effect be to transfer to the rich some of those 
 burthens which have been unjustly thrown 
 upon the poor, ought that to be objected to as 
 impoverishing one set of men and enriching 
 another ? As for the charge of introducing 
 confusion into all transactions, it is perfectly 
 groundless, as every man of business must be 
 aware : but who shall describe the confusion 
 which may ensue, from neglecting much longer 
 the appeals and advice of those, whose only 
 wish is to save property from confiscation, the 
 state from anarchy, and society from dissolu- 
 tion ? " Can ye not discern the signs of the 
 times ?" 
 
 It was not so much by these assertions
 
 PRP.FACE. IX 
 
 that Mr. Attwood's motion was defeated, as by 
 the unaffected declaration of Lord Althorp, 
 " that he would deal frankly with the Honour- 
 able Member, and tell him, that he must, as 
 an honest man, oppose the motion." It re- 
 quired great moral courage, and a strong con- 
 sciousness of integrity, to stand up against a 
 blow like this, the effect of which was much 
 enhanced by the unexpected straightforward- 
 ness of its delivery. 
 
 If any one is entitled to the character of an 
 honest man, it is the nobleman who made this 
 declaration. Let, then, Lord Althorp, in that 
 character say, whether a charge of unfairness 
 in the collection of the revenue, whereby the 
 whole of the productive classes are injured, and 
 immense numbers ruined, occasioned by the 
 late alterations of our monetary system — ought 
 not to be enquired into ? It is no answer, even 
 if it were true, to say, that parliament did 
 wrong in 1797, by the Restriction Act ; and 
 that if it erred in 1819 by enforcing cash pay- 
 ments, any attempt to correct that error in 1833 
 would be productive of further mischief: that 
 during the war, the creditor was despoiled, and 
 if the debtor has suffered since, the two classes 
 have endured a " common lot," which would
 
 PREFACE. 
 
 not be mitigated, if we were again to change our 
 system. A plea like this should be no bar 
 to a claim of justice. It is easy to attribute 
 all blame to the Act of 1797, as the source 
 of the evil ; but if posterity does not applaud it 
 as the wisest of all Mr. Pitt's measures, which 
 may very possibly be the case, those who 
 condemn it will do well to reflect in what con- 
 dition they would have been, had this expe- 
 dient not occurred to the fertile mind of that 
 acute and highly gifted statesman. No one 
 who reads or recollects the history of that 
 period, can fail to perceive, that without it, 
 either this country would have been a province 
 of France, or we should have had a revolution. 
 The grand question, however, which presses 
 for immediate decision, is not one of past, but of 
 present interest, being simply this : " Shall the 
 unproductive class, who did not contribute their 
 quota to the war, during the war, continue to shift 
 off all payment from themselves to i\\Q productive 
 class, as they have done since its termination V 
 Subordinate to which is the following : " Shall 
 the capitalist escape paying those taxes occasion- 
 ed by the war, to which he has not yet contri- 
 buted, and which, in so far as the productive 
 class cannot pay them, are destined henceforth 
 to be made good by the land-owner ?" 
 
 /■
 
 PREPACK. XI 
 
 If Lord Althorp will do the author the honour 
 to read the second part of this pamphlet, he will 
 perceive that as an honest man he is called upon 
 to relieve one class from taxation, by adopting- 
 those means as an honest minister, which will 
 obtain for him a greatly increased revenue from 
 the other. 
 
 London, 
 May 9th, 1833.
 
 C N T E N T S. 
 
 PART I. 
 CURRENCY FALLACIES REFUTED. 
 
 FALLACY THE FIRST. 
 
 " That we have as much paper money afioat as the wants oj 
 the community require" — Three several senses in which 
 the original assertion may be taken, each subversive of the 
 other — Preference due to that above-quoted — Proofs of 
 this fallacy in the decline of rents — inability to pay taxes — 
 number of bankruptcies and compositions — foreclosures 
 of mortgages — wages of labour. _ . . ,3 
 
 FALLACY THE SECOND. 
 
 " That we have at present as much money afloat as the 
 credit of individuals can cominand " — If so, all credit is 
 exhausted and no one has property but the capitalist — Re- 
 futed by the valuation of the wealth of Great Britain, as 
 taken thirty years ago, contrasted with the highest quantity 
 of money as given now by the Times. - - - 5 
 
 FALLACY THE THIRD. 
 
 " That there is ayi alarming abundance of unemployed money 
 in the Bank of England ; and that persons of good credit 
 may obtain loans in the City at 2 per cent. — The abund- 
 ance is either positive or relative. Not positive, because 
 the people are generally in distress. Therefore relative,
 
 XIV CONTENTS. 
 
 and a proof of distress, in a deficiency of bills, and the 
 unprofitableness of trade. Why capitalists do not employ 
 their money themselves rather than lose its use — Dread of 
 further decline of price, the real cause — Bakewell petition. 7 
 
 FALLACY THE FOURTH. 
 
 " That the loss of interest on fifteen or twenty millions of 
 gold is the only loss we sustain hy adhering to the present 
 system of currency — Error in regarding gold as the sole 
 medium of paying taxes — The loss is threefold this, if 
 compared with the saving to government by an issue of 
 exchequer bills for that purpose — Further loss, is all the 
 country would gain by a return of prosperity consequent on 
 the issue of such bills. ----- 12 
 
 FALLACY THE FIFTH. 
 
 " That a facility of creating unreal wealth would excite a 
 fever of speculation, to be followed, as in 1825, by con- 
 vulsion and ruin' — The issue of exchequer bills would 
 probably excite a fever of speculation, but no convulsion 
 nor ruin, such bills being a legal tender — Gold rising in re- 
 lation to paper would be kept in the country — Present sys- 
 tem will end in convulsion and ruin — Proof from the Times 
 
 — Dilemma of the country. _ _ _ _ 14 
 
 FALLACY THE SIXTH. 
 
 ** That if we were allowed to issue II. notes, money would 
 become more plentiful over the land; but it would become 
 depreciated in the exact proportiori of its increased abund- 
 ance" — This fallacy founded in a wrong conception of 
 money — Compared with gold, the value of which is fixed 
 by corn, which is the standard of all value, our present 
 money is still depreciated 20 per cent. — It must conform to 
 the standard — to which it is gradually approaching — Effect 
 of this — Necessary to free-trade — Ought not to be arrested 
 at this stage — Not called for before by the public creditor 
 
 — To redeem the National Debt will take half of every 
 man's property at s^awc^arrf prices. - - - 17
 
 COXTKN'TS. XV 
 
 FALLACY THE SEVENTH. 
 
 ' That this depreciation (of paper in comparison with gold) 
 iL'ould entirely alter the relation of debtor and creditor, 
 and enable government to pay the fundholder ivith a 
 smaller portion of the national income'' — Depreciation 
 is not necessarily deteiioration, which is here meant — 
 Difference pointed out — Fallacy with reference to the fund- 
 holder exposed in the next part. - - - - 2.3 
 
 PART H. 
 
 PAPER-MONEY VINDICATED. 
 
 A measure of value in gold and silver necessary to foreign 
 trade — How to keep it constantly true to the standard of 
 value, corw — Effect of taxation on prices — Paper money 
 necessary to represent taxation in addition to natural price 
 — Taxes on consumption are by this means paid by the 
 consumer — Otherwise by the producer — Their effect on 
 him in the foreign market — The home market — Great 
 injury done the producer, by the consumer's taxes being 
 thrown on him for the last sixteen years — Absurdity of the 
 methods taken to relieve him — Two only effectual — A 
 property tax — or paper money — Objection answered : 
 that paper money interferes with foreign trade — Particular 
 cases of extra taxation are to be guarded by protecting 
 duties and drawbacks. ----- 27 
 
 Paper-money cannot injure the consumer of commodities, 
 except it is issued in excess — How excess is to be ascer- 
 tained — By the produce of the taxes — By the amount of the 
 National Debt before and since the war — By the price of corn 
 — By comparing the taxation price in paper with the metallic 
 or natural price — By the price of other necessaries of life, 
 and by labourers' wages — Illustrated also by the tables of 
 exports and imports before and since the war — By the 
 amount of bank notes in circulation at the same periods — 
 Nu signs of deterioration in any of these instances.
 
 XVI CONTENTS. 
 
 The paper money of solvent issuers incapable of depre- 
 ciation — Example, the notes of a public Banking Com- 
 pany — Adequate check against excessive issues, in home 
 and foreign competition — Consumers cannot be charged 
 beyond the addition of taxation to natural prices — 
 Gold will not fluctuate when it has once found its level in 
 paper — Tables of the assumed and natural price of corn 
 for the last 140 years — Remarks to which they give rise. 
 
 Untrue " that the Currency Club propose to commit an 
 open fraud by means of a bank note engraver, acting under 
 cover of an act of parliament , when they cannot perpetrate 
 a direct robbery, by destroying the bond, without incurring 
 the penalties of the law " — By means of paper money, the 
 public creditor is placed on the same footing as the land- 
 owner — State of the two compared — The parallel perfect 
 if the public creditor is paid in paper money — Otherwise 
 not — Gross injustice of paying back the money in gold — 
 Private creditors uninjured by paper money. 
 
 What sorts of paper money are capable of depreciation — A 
 proper paper currency does justice to all, and provides for 
 / all emergencies — Gold and silver radically defective in this 
 respect — Example — Taxation by reducing profits com- 
 pared with taxation by a rise of prices — Loss to the country, 
 from high prices in a metallic currency, enormous— Guarded 
 against by allowing gold to exchange against paper for the 
 difference — Importance of this protection of price not only 
 to the merchant and manufacturer, but to the landowner — 
 Happy effects of such a system. 
 
 APPENDIX. 
 
 No. I. Articles from the Times paper — No. II. Illustrations 
 from the Report of the Bank Charter Committee — No. III. 
 Table of Exports and Imports.
 
 INTRODUCTION. 
 
 During the last month, (March, 1833) several 
 "leading articles" have appeared in the Times, 
 attacking with considerable virulence a Society 
 which has, for its avowed object, the restoration 
 of national prosperity by means of an amend- 
 ment of the Currency Laws. The Editor clearly 
 imagines that he has made out a triumphant 
 case against the Society, and so expressing 
 himself, many are led without further inquiry 
 to place implicit confidence in his assertions. 
 As this may possibly be the case now, and as 
 the Editor is the professed champion of the cause 
 of the bullionists, a friend to the object of the 
 Society thinks he cannot do the state a better 
 service, than by attempting to shew, that all the 
 assertions and statements of the Editor, on this 
 subject, are Currency Fallacies. 
 
 A further motive also influenced the writer. 
 Having published two Essays,* in which the 
 
 * The first Essay shews that coin is properly an instrument 
 of taxation, and a less perfect instrument than paper money : 
 the second, that corn is the best standard, and gold and silver 
 the best measure of value.
 
 2. INTRODUCTION. 
 
 argument in favour of a Paper Currency had 
 been advanced to a certain stage, he felt it in- 
 cumbent on him to carry the investigation to its 
 proper termination ; and with this view he was 
 meditating a third, in which " The Effects of 
 Taxatmi on Fr'ices^ would be discussed, when 
 the present opportunity of incorporating the 
 views he took, with those which were necessary 
 for the correction of opposing errors, presented 
 itself He was sensible that many persons are 
 not prepared to refute fallacies, merely by 
 having antagonist truths presented to their 
 minds : they require the prescription of an ap- 
 posite remedy for every case, distrusting their 
 own competency to determine its diagnosis. 
 Having this impression, he was not sorry to be 
 forced to make Jiis inclination yield to necessity, 
 so far as to render the advocacy of what he 
 conceives to be right, subordinate to the over- 
 throw of what he is convinced is wrong.
 
 PART I. 
 
 CURRENCY FALLACIES REFUTED.* 
 
 FALLACY THE FIRST. 
 
 ** That we have at present as much paper afloat as 
 the wants of the community require.^' 
 
 I believe this assertion to be consistent with 
 the true meaning of the Editor of the Times, 
 but as he has stated it, the sense is not very 
 clear. — He says, " with the exception of One 
 Pound notes, we have as much paper afloat as 
 the wants of the community require ;" and " that 
 the smaller paper has been wisely withdrawn from 
 circulation.'' We have first the simple sentence, 
 " There is sufficient paper money afloat :" then 
 the qualified sentence, — '' There is sufficient 
 with the exception of One Pound notes .•" lastly, 
 the qualification dismissed, — *' The smaller 
 paper is wisely withdrawn," and therefore there 
 
 * The Article, from which the following Fallacies are taken, 
 will be found in the Appendix, No. L It happens, conve- 
 niently for our purpose, that in one copious passage all those 
 principles are laid down, which furnish matter for subsequent 
 dilatation. 
 
 b2
 
 4 CURRENCY FALLACIES REFUTED. 
 
 is sufficient without the exception of One Pound 
 notes. — It is evident that all these assertions 
 cannot be received. The second appears to 
 me the most consistent with truth, and I would 
 gladly record it as containing the Editor's 
 meaning, if I were sure of his consent ; but with 
 two chances to the contrary, I fear the election 
 cannot be supported, and am bound therefore 
 to return \\ie fallacy as the chosen sense. 
 
 That it is a fallacy, none can deny who wit- 
 ness the difficulty almost all men have to pay 
 rents and taxes, for which the present currency 
 does not affi)rd them the means, but for which 
 the paper money afloat some years ago was fully 
 adequate. Rents would not have fallen 33 per 
 cent, if there was money enough in circulation 
 to keep them up to their former level. If the 
 wa7its of the community were alone to be con- 
 sulted, the Chancellor of the Exchequer would 
 not submit to be told by deputations from the 
 different parishes in London, that the assessed 
 taxes cannot be any longer borne, because the 
 people have not the means of paying them. 
 Bankruptcies and compositions would not be 
 so common in all our principal trading streets, 
 were there not " something rotten in the state." 
 Men engaged in wholesale business cannot cal- 
 culate on receiving more than two-thirds of 
 what they are entitled to : could this occur if 
 there was not a deficiency of money ? — Would 
 so many fine estates pass into the hands of the
 
 CURRENCY FALLACIES REFUTED. 6 
 
 mortgagee as have changed owners since the 
 war, if there was as much money in circulation 
 as formerly, and as much as the country wants ? 
 I need not go into details : — from the landed 
 proprietor to the labourer — from the manufac- 
 turer to the humblest artisan, all are suffering, 
 because the currency is insufficient for their 
 necessities ; and it is therefore not merely a fal- 
 lacy, it is a mockery of their distress, and an 
 insult to their understandings, to have it stated, 
 that there is as much paper afloat as the ivants 
 of the community require. 
 
 FALLACY THE SECOND. 
 
 " That we have at present as much paper money 
 afloat as the credit of individuals can comynand." 
 
 This declaration is appended as an alternative 
 to the foregoing threefold proposition, but the 
 magnitude of the fallacy entitles it to the honour 
 of a separate consideration. 
 
 If the credit of individuals can command no 
 more money than is at present afloat, it is plain 
 that their credit is exhausted, — that they have 
 no property to pledge, to the capitalist as secu- 
 rity for the return of his loans, and no friend 
 who is willing to become security for them. 
 Doubtless there are many at this time in this 
 painful predicament, — brought to it by that 
 want of a sufficient currency, which the pre- 
 ceding fallacy denies to be existing; but it
 
 6 CURRENCY FALLACIES REFUTED. 
 
 cannot be believed on the authority of the as- 
 sertion before us, that all to whom a loan would 
 be useful are utterly without any more property 
 to offer as security for it. Has the landed pro- 
 prietor no acres left but those which are under 
 mortgage ? Is the farmer's capital all gone ? — 
 Has the tradesman, manufacturer, or merchant 
 no stock in his warehouses, no bills in his pos- 
 session, on the credit of which he could com- 
 mand a further loan from the capitalist ? If it 
 has come to this, we are brought into the con- 
 dition of ancient Greece and Rome, of which 
 it was said, at a certain time, that one-half of 
 the nation was indebted to the other ; and at 
 that juncture a fresh division of property took 
 place. This would have an ominous aspect for 
 many, were the assertion true of England : but 
 let us hope it is false ; and for our comfort re- 
 collect, that the wealth of Great Britain at the 
 end of the last century was estimated by Dr. 
 Beeke, and apparently not over-estimated, at 
 the large sum of 2,500 millions of pounds ster- 
 ling. This cannot be all in the hands of the 
 capitalists. If we take what the T'ljnes allows 
 to be the amount of money at present in Great 
 Britain, viz. 50 millions, and compare it with 
 the resources of the country — it amounts but 
 to ihQ Jiftieth part . Now it is impossible that 
 the capitalist should have plenty of money ready 
 to lend, out of 50 millions in all, and that the 
 people should not have any thing to offer as
 
 CURRENCY FALLACIES REFUTED. 7 
 
 security for it out of property to fifty times the 
 amount. This assertion then must be di fallacy. 
 Had the Editor reversed his proposition and 
 said, that the credit of individuals in England 
 can command more money than all the capital- 
 ists in the world can advance, if all their 
 boasted millions were clubbed together, he 
 would have been somewhat nearer the mark. 
 
 FALLACY THE THIRD. 
 
 ** That there is an alarming abundance of unem- 
 ploi/ed money in the Bank of England, and that 
 persons of good credit may obtain loans in the 
 City at 2 per cent." 
 
 The abundance spoken of may be either 
 positive or relative : the Editor of the Times 
 wishes us to believe that it is positive, and in 
 this consists the fallacy. If it were positive, 
 all classes of the community would be in the re- 
 ceipt of more money than they have occasion 
 for in their respective situations in life : no class 
 would be in debt, — none in want, — a general 
 plenty would be diffused all over the land ; — 
 we should have no half-starved and half-clothed 
 people, — no discontent, — few paupers. Hav- 
 ing too good reason to know that this is the 
 very reverse of our condition as a people at 
 present, we are compelled to deny that the 
 abundance represented as so alarming to the 
 capitalist is -a. positive abundance.
 
 8 CURRENCY FALLACIES REFUTED. 
 
 The other kind of abundance may exist, and 
 be equally alarming to the capitalist, being to 
 him productive of the same effects as a positive 
 abundance, but instead of being considered a 
 sign of prosperitij, it ought to be regarded as a 
 proof of general distress. This relative abun- 
 dance exists when there is a scarcity of good 
 bills of exchange in the market ; and that these 
 are wanting now, we have the strongest evi- 
 dence, in the universal stagnation and unprofit- 
 able state of trade. I appeal to well-known 
 facts in confirmation of my assertion, that the 
 abundance of money is not at this time pro- 
 ceeding from every interest in the kingdom being 
 so flourishing and prosperous, that the parties 
 conducting the various concerns of trade and 
 agriculture have every wish gratified, and no 
 need of further money on that account ; but 
 that it is occasioned by so deep a depression of 
 the monetary value of all returns, and of the 
 profits which ought to be realized to recompence 
 men for their labour and risk, that they will not 
 embark in any speculations in trade, nor extend 
 their present business further than they can 
 help. If the Editor of the Times will not open 
 his eyes to see the miserable condition of the 
 country, which the abundance of money he an- 
 nounces, in connection with the distress which 
 no one denies, irresistibly proves to be truly 
 miserable ; let him say how it is that the ca-
 
 CURRENCY FALLACIES REFUTED. » 
 
 pitalists do not employ their money themselves 
 in trade, rather than suffer it to bring them 
 barely 2 per cent, while all other people are 
 supposed to be prospering around them. Have 
 they no sons, nor sons-in-law, no nephews nor 
 friends to whom it would be prudent to confide 
 a small portion of their unemployed capital, in 
 order to get by its use in trade 5 per cent, at 
 least, if they do not choose to become partners 
 in the profitable concern themselves ? It seems 
 not. And what is more wonderful still — no 
 other men are willing to pledge any species of 
 property for a loan at 2 per cent, in order to 
 make much more of it in trade. The reason 
 is evident. Such is the deplorable state of all 
 mercantile, trading, and farming affairs, that 
 the employment of capital, in any of these 
 modes of improving a man's condition in life, 
 will not repay him, even with so small an al- 
 lowance as 2 per cent, for interest of money. 
 However anxious to be engaged in business, 
 and almost in despair at the loss of so much 
 time in the most active period of his life, every 
 prudent man is yet convinced, that if he ven- 
 tures any thing as security for the return of a 
 loan of money, he shall lose his own property 
 in the end. All commodities are sinking in 
 value ; and if he buys, as he thinks, cheap to- 
 day, he must sell his goods for less to-morrow, 
 or he cannot sell them at all. Grown wise 
 himself by experience, he pities those who are
 
 10 CURRENCY FALLACIES REFUTED. 
 
 induced by the hope of success, to fall into the 
 lure so invitingly spread by the Times : 
 
 Heu, quoties fidem 
 Mutatosque deos flebit, et aspera 
 Nigris sequora ventis 
 Emirabitur insolens, 
 Qui nunc te fruitur credulus aured ! 
 
 There can, indeed, be no stronger symptom, 
 properly considered, of the general decay of 
 trade in England, than this fact of the present 
 abundance of money, at so low a rate of in- 
 terest, which is unsoundly put forth by the 
 Editor of the Times as an argument of general 
 prosperity, and a sign of more than a suffi- 
 cient supply of the circulating medium.* 
 
 The true state of the case is placed in so 
 clear a light by a petition from Bakewell, which 
 appears to have reference to this statement in 
 the Times, that I cannot resist quoting it. 
 Lord Cavendish, on presenting it, said, that he 
 could not support its prayer ; but this is only 
 another proof that a man may be a very distin- 
 guished scholar at the University, and not pos- 
 sess the p?Yictical knowledge necessary to qua- 
 lify him to take the sound views, and represent 
 the real interests, of his constituents. 
 
 * In reply to the question of the Bank Charter Committee, 
 " What is meant in the City, by an abundance and scarcity of 
 money ?" Mr. Tooke says, " It is by no means synonymous 
 with an abundance or scarcity of currency." — See Appen- 
 dix, No. II.
 
 CURREXCY FALLACIES REFUTED. 11 
 
 " A Public Meeting was held at Bakewell, 
 on Monday the 18th inst., for the purpose of 
 petitioning Parliament to devise some means by 
 which the icorking Population of Great Britain 
 may be provided with more uniform employment, 
 and with more money for their work, when the 
 following petition was agreed to : — 
 
 " We, the undersigned Inhabitants of Bakewell 
 and its neighbourhood, hail with gladness the 
 introduction, into your Honourable House, of 
 many Members practically acquainted with the 
 distressed condition of the working population 
 of these realms ; and the kindly feeling expres- 
 sed in behalf of the suffering people has excited 
 our grateful regard : impressed with like sym- 
 pathy, and animated by a spirit of loyalty and 
 love to our King and Country, we humbly 
 beseech you diligently to search out the cause 
 of that distress, with a view to its speedy and 
 permanent removal. And whereas we are in- 
 formed that the rich capitalists of the metropolis 
 complain of much inconvenience from money 
 being too abundant in relation to good bills of 
 exchange, and similar securities bearing interest ; 
 whilst the working people, before alluded to, 
 are experiencing extreme distress from its being 
 too scarce in relation to their labour; we there- 
 fore beseech your Honourable House to inves- 
 tigate the state of the Currency, and to devise 
 some means whereby the circulating medium
 
 12 CURRENCY FALLACIES REFUTED. 
 
 of the nation may be rendered more active, so as 
 to relieve both the rich and the poor from their 
 respective embarrassments, and thus promote 
 the general welfare of the w^hole political body. 
 " March 18, 1833." 
 
 FALLACY THE FOURTH. 
 
 ** That the loss of interest on ]^ or 20 millions of 
 gold, is the only loss we sustain by adhering to 
 the present system of currency.'' 
 
 The supposition, which gives birth to this 
 fallacy, is, that 15 millions of gold, rapidly 
 circulating from hand to hand, pass three 
 times a year through the Treasury, and that 
 the country pays interest qu this gold alone. 
 But the Editor forgets that the gold does not 
 all circulate this way: that it is for the 
 greater part a found9,tion on which the Bank 
 of England makes such issues of bank notes, 
 as will satisfy all the demands of the state ; 
 and that on all these issues the country pays 
 interest the same as if they were gold; The 
 fairest way of deciding how much we lose by 
 adhering to our present system, is to see how 
 much we should gain by taking a different 
 course. If Government were to issue Exche- 
 quer Bills from One Pound upwards, and make 
 all its payments in this money for a year, to 
 the extent of the sum for which it has ob- 
 tained a vote of Parliament — gold and Bank 
 notes would not be wanted for that purpose.
 
 CURRENCY FALLACIES REFUTED. 13 
 
 But the collectors of the taxes would be daily 
 bringmg in gold and Bank notes, for some time 
 at least, in as great abundance as ever, or 
 nearly so. Let the Government then, with this 
 money so brought in, first discharge the Bank 
 debt ; then take up Exchequer Bills bearing- 
 interest ; and lastly, redeem with the remainder 
 so much of the National Debt as it would pur- 
 chase. The effect would be this : a sum of 50 
 millions, bearing interest, would have been paid 
 off — its place, in the collection of the revenue, 
 being supplied by Exchequer Bills not paying- 
 interest — and consequently the interest on 50 
 millio)is which we now pay, and then should 
 not, is the loss we sustain by adhering to our 
 present system. Therefore, to say that we 
 lose the interest only on the gold, which 
 amounts but to a third part of that sum, is in 
 this case a fallacy. 
 
 But the loss extends still further. We lose 
 all that increase of revenue, which we should 
 obtain by an issue of government paper so 
 regulated as never to exceed the amount of 
 the taxes of one year, and therefore always 
 returnable in the year by the payment of taxes 
 into the Exchequer. Such a circulating me- 
 dium would give a great impulse to trade; for, 
 knowing that it would not be withdrawn as 
 soon as prices began to advance and prosperity 
 to dawn upon them, all men would then engage 
 again, with proper spirit, in the cultivation
 
 14 CURRENCY FALLACIES REFUTED. 
 
 and improvement of their farms, and in the 
 various engagements of manufacture and com- 
 merce. From all this liveliness of business, 
 throughout the country, a great increase to the 
 employment of labourers and mechanics would 
 spring ; poor's rates, therefore, would diminish, 
 taxes on consumption increase; and thus at 
 the end of the year, as each successive year 
 rolled on, we should have greater prosperity 
 witnessed throughout the nation, and the go- 
 vernment every year would be able to pay off 
 with the surplus revenue a still greater portion 
 of the national debt. The indirect benefit 
 arising from an increased currency of this kind, 
 would greatly exceed the direct advantage, 
 large as it has been shown to be, and all this 
 we lose by adhering to our present system of 
 currency. 
 
 FALLACY THE FIFTH. 
 
 " That a facility of creating unreal wealth would 
 excite a fever of speculation, to be followed, as 
 in 1825, by convulsion and ruin .'' 
 
 To collect the revenue by means of Exche- 
 quer bills would be a creation of unreal wealth, 
 according to the Editor of the Times ; but it 
 would have a great effect on trade and com- 
 merce, as was remarked under the last head ; 
 and when men had no longer any reason to 
 fear that as prices improved the means of sup-
 
 CURRENCY FALLACI1ES REFUTED. 15 
 
 porting those prices would be withdrawn, it is 
 very certain that there would be for some time 
 such activity in every branch of business, as to 
 give colour to the charge that a fever of specu- 
 lation was excited. When those who are al- 
 most dead for want of food are all at once 
 placed at a plentiful table, there is great reason 
 to fear they will eat and drink to excess. It 
 would be desirable if this could be guarded 
 against, but if it cannot, the irregularity must 
 be suffered to cure itself ; in a very short time 
 the fever will have worn off. In the interim, 
 it will be some consolation to the sufferers to 
 know that the assertion of the Editor of the 
 Times, that the creation of such unreal wealth 
 will be followed, as in 1825, by convulsion and 
 ruin, is an utter fallacy. In 1825, the Bank of 
 England had to take up its notes in gold, the 
 country bankers the same, and great was the 
 anxiety to get possession of the gold which it 
 was known could not be had in sufficient quan- 
 tity for the emergency; therefore some must go 
 without : but if we were to use ExchequeT 
 bills for the collection of the revenue, nothing 
 of this kind could take place. With these in 
 reserve, the Bank would freely part with gold 
 as long as it thought proper to do so, and would 
 protect itself from further demands if they pro- 
 ceeded to an inconvenient extent, by giving in 
 exchange for its own notes those of the govern- 
 ment. Country bankers would do the same, if
 
 16 CURRENCY FALLACIES REFUTED. 
 
 they had need to issue any paper of their own ; 
 but the probability is, that most of them would 
 have government notes in hand at all times suffi- 
 cient to constitute an abundant source of sup- 
 ply for any discounts or loans they might have 
 occasion to grant. Thus prices would advance ; 
 trade would be stimulated ; prosperity would 
 be felt throughout the country as in 1824 ; but 
 no convulsion or ruin would follow as in 1825. 
 A difference of value might arise between paper 
 and gold money, but this would create no dis- 
 order. Government bills being a legal tender, 
 in them or in Bank notes almost all the pay- 
 ments of the country would be made ; while 
 foreigners would be compelled to pay that price 
 in our currency for gold, if they were deter- 
 mined to have it, which it was really worth in 
 comparison with other articles of traffic. 
 
 But if it be a fallacy to say that the facility of 
 creating unreal wealth, by means of an issue of 
 paper money convertible into gold at the market 
 price, must be followed by convulsion and ruin ; 
 it is no less a fallacy to affirm, as is done by 
 implication, that an adherence to the present 
 system of convertibility at the mint price can 
 preserve us from it. People must either ven- 
 ture their capital or starve : they will prefer the 
 former as the less evil, and in spite of experience, 
 will again suffer from disappointed expectations ; 
 for as soon as they begin to hope all danger is 
 past, it will rush in upon them like a flood.
 
 CURRENCY FALLACIES REFriKD. 1/ 
 
 The writer of the ** City Article" in the Times of 
 March 7th speaks of symptoms of an impati- 
 ence of inactivity as already becoming apparent. 
 " All practical men fear that the redundancy of 
 capital [even now] will drive us once more into 
 all the mad schemes and speculations of 1824 
 and 1825, with a repetition of all the fatal conse- 
 quences to which they then led !" — Unhappy 
 people ! If your capital remains without em- 
 ployment, you starve ; if you employ it, you are 
 ruined : — meanwhile those who have no capital 
 are equally weary of their state, and are only 
 waiting for a convenient crisis to arrive, at 
 which they may, by a general movement of all 
 the disappointed, disaffected, and disgusted 
 part of the community, relieve you of your idle 
 property. There is, indeed, no danger in such 
 a change of currency as the time demands and 
 reason approves, but infinite danger to all who 
 have any thing to lose, in protracting much 
 longer our adherence to the present system. 
 
 FALLACY THE SIXTH. 
 
 "That if we were allowed to issue One Pound Notes, 
 money would become more 'plentiful over the land, 
 but it would become depreciated iii the exact pro- 
 portion of its increased abundance." 
 
 This is an opinion very commonly entertained, 
 and one which more than all the rest has ope- 
 rated to prevent men from fairly giving their 
 
 c
 
 18 CURRENCY FALLACIES REFUTED. 
 
 minds to the consideration of the currency 
 question. They think they see in depredation a 
 lion in the path, which, if they dared approach, 
 they would find to be the phantom only of a 
 disordered imagination. The mistake originates 
 in an erroneous conception of the nature of 
 money, which most men fancy they understand 
 perfectly well ; but which many, like the Editor 
 of the Times, believe to be something widely 
 different from what it really is. 
 
 This error is the reason why no one takes 
 alarm at the rapidly increasing appreciation or 
 enhanceme72t of the coin, all being afraid only of 
 its depreciatio7i. It will be easy to shew that 
 this alleged depreciation, properly viewed, can 
 cause no terrors in any one ; but before entering 
 upon this consideration, let me call the reader's 
 attention to what is at present of far greater 
 moment to his welfare, the state of appreciation 
 (as it is called) to which our money, under the 
 present system, has still a constant tendency. 
 
 It is not necessary here to insist on — what is 
 nevertheless of much importance in treating such 
 a subject — the increasing numbers of mankind, 
 in the civilized parts of the world, who require 
 the use of coin ; the inability of coin to increase 
 in an equal degree ; and its consequent appre- 
 ciation every year, by which event unhappily a 
 great deal of misery will be engendered, in all 
 those countries which depend for their circu- 
 lating medium on a metallic currency. Leaving
 
 CURREycy FALLACIES REFUTED. 19 
 
 this ground, because it has been trodden before, 
 I will bring the subject nearer home and closer 
 to ourselves, by shewing that we have as yet a 
 highly depreciated currency ; and must therefore 
 expect it to undergo a great degree of enhance- 
 ment before it can be brought to the standard ; 
 before therefore we can talk with any propriety 
 of not suffering it to be depreciated. 
 
 Depreciation and ajjpreciation are terms which 
 receive their application from some standard to 
 which they have reference. The standard of 
 gold and silver is corn. That quantity of corn 
 which those persons consume who are engaged 
 in discovering, preparing, and bringing to market 
 a certain quantity of gold or silver, is the standard 
 of the value of that quantity of these metals, 
 taking the average of a number of years. In all 
 civilized countries these metals are in request, 
 and people are anxious to get them at what may 
 be deemed their proper value : they give conse- 
 quently the corn which is necessary to repro- 
 duce them, as the minimum of their price ; or they 
 offer such other commodities as will exchange 
 readily for that quantity of corn. They cannot 
 be had for less than this, otherwise they could 
 not be reproduced ; and he who gives most is 
 most likely to obtain them. A free market and 
 a common necessity soon assign the average 
 equivalent of these metals in corn throughout 
 Europe ; and when that is once fixed, that 
 quantity of gold or silver becomes the value of 
 
 c 2
 
 20 CURRENCY FALLACIES REFUTED. 
 
 that quantity of corn. This value remains un- 
 disturbed, till some greater abundance or scarcity 
 of silver or gold discomposes the average rate of 
 their exchange against corn, and against each 
 other. For the greater part of the last century, 
 the price of corn throughout Europe, in gold 
 and silver, did not greatly vary, being on the 
 average about Gloz, of silver, or 33^. Qd. the 
 quarter. It is still about this price on the 
 average in France, Holland, Belgium, and the 
 northern ports nearest England ; but if we were 
 to allow as much as 40,?. per quarter or 5.9. per 
 bushel, we should probably give the utmost 
 value that could be assigned it in England at 
 this time, were corn and the precious metals 
 free to exchange against each other. 
 
 Comparing then this price in gold or silver 
 with the present price of wheat in England, we 
 must calculate on a further fall of one-fifth, or 
 of 20 per cent, in our currency before it reaches 
 the standard. To come down to that, our 
 money must be reduced in quantity : the prices 
 of all articles will fall accordingly ; rents and 
 taxes must be abated one-fifth to keep in pro- 
 portion to the increased value of money; and 
 all persons will suffer loss in that degree, ex- 
 cept the receivers of fixed incomes, who will 
 gain as much as others lose by the change. We 
 had nearly come to this rate of price in 1 822, 
 when for a time corn was 37^. per quarter and 
 the average price for the year was 44.?. per quar-
 
 CURRENCY FALLACIES REFUTED. 21 
 
 ter. The increased duties on importation be- 
 nefited the farmer, or rather his landlord for a 
 time, at the expense of the productive classes 
 generally ; but men cannot always pay more 
 money than they receive — and the farmer can 
 only get at last what it is possible for the 
 other productive classes to give, which ability 
 of theirs to give is governed by the value of 
 corn in all other countries ; to that level there- 
 fore prices must descend. The standard will 
 be attained, supposing 406-. per quarter gives it, 
 when a sovereign in gold, or 20^. in silver ex- 
 changes freely for 4 bushels of wheat, instead 
 of 3 as at present ; at which period all other 
 commodities will be sold for one-fifth less than 
 their present prices. Whether the corn laws 
 are repealed or not, to this we must come if we 
 adhere to a metallic currency. It is a fallacy 
 therefore to talk of money being about to be 
 depreciated by the issue of one pound notes, as 
 if it were not already in a state of great depre- 
 ciation ; and as if the real danger to which we 
 are exposed were not that of its further enhance- 
 ment at a time, when, from an inadequacy of 
 means to fulfil the engagements into which they 
 entered under happier auspices, men of enter- 
 prise and property are leaving the country by 
 thousands, and the social system is threatened 
 with disruption by the growing distresses of 
 those who remain. 
 
 By returning to the standard, we can alone
 
 22 CURRENCY FALLACIES REFUTED. 
 
 hope to enjoy that free trade which it is the 
 object of ministers to introduce as soon as they 
 can bring- their plans to bear. For who would 
 submit to pay more for the corn which is to 
 subsist him, while producing his goods, and 
 then sell those goods for the same price which 
 the continental producer can afford to take? 
 When men were ignorant of the unfairness 
 of such a system, it might be tolerated, under 
 the impression that there was no remedy : but 
 as soon as it is understood that the price of 
 corn determines the price of all commodities, 
 their producers will never consent to pay more 
 than others by at least one-fourth, as they do at 
 present, and get only the same price in return. 
 The advocates of the present system will per- 
 haps say, ' They shall have protection to the 
 amount of that fourth.' But how can you give 
 them protection in a foreign market ? If you 
 could succeed in keeping the home market en- 
 tirely to the home producer, how is he to be 
 ensured a remunerating price in that common 
 market of the world, to which all others have 
 free access ? I doubt the ability of government 
 to secure to him even the home market in a 
 time of general peace ; — but in the same breath 
 to talk Qi free trade, would be a monstrous ab- 
 surdity. 
 
 But another question may be put: 'Why 
 can we not secure the present rate of prices by 
 reducing the size of the coin, and perpetuating
 
 CURRENCY FALLACIES REFUTED. 23 
 
 the depreciation of the currency at what happejns 
 to be its present relation to the standard V To 
 which I reply, no argument can be urged for 
 this, which might not have been equally urged 
 in favour of that depreciation, during the war, 
 which gave us 100s. per quarter for wheat. 
 They are both defensible on the same ground ; 
 for the latter was, as the former is, the rate of 
 depreciation to which our currency was regu- 
 larly brought ; and if the greater change was 
 made because it was thought proper to return 
 to a metallic currency, the less must be made 
 on the same plea. It is no answer to say, that 
 the public creditor will consent to a reduction 
 by which the present scale of prices may be 
 preserved : he has not called for the changes 
 which have been made ; to many of those 
 families which depend /or their sicpport on pro- 
 perty in the funds, the alteration has been pro- 
 ductive of injury : they sought it not before, 
 and therefore their opinions now would be of 
 no avail. 
 
 If we are to adhere to a metallic currency on 
 the present system, it is certain that heavy taxes 
 cannot be paid much longer by the productive 
 classes. They have found that out, and this 
 makes them so clamorous for the repeal of the 
 House and Window Taxes. Whenever these are 
 abolished, others will remain equally obnoxious, 
 as the supposed cause of their distress : they
 
 24 CURRENCY FALLACIES REFUTED. 
 
 must also be reduced ; till at last the minister, 
 driven to extremes, will consent to, if he does 
 not originate, a property tax, in lieu of all other 
 imposts pressing particularly on the industrious 
 classes. Let this be agreed to, and what then 
 will be the condition of the landed interest ? 
 With corn at 406'. per quarter, and rents in pro- 
 portion, they will have to pay their share of 
 800 millions of debt, which, taking Dr. Beeke's 
 estimate in 1800, will amount to a /^zW of their 
 property. But the price of corn for the ten 
 years ending in 1800, was 54.9. per quarter. 
 With corn at 40.?. per quarter, to which we 
 shall come when the taxes are commuted, it will 
 take nearly the half of every man's property to 
 pay his share of the debt. Will the remaining 
 ^^Z/" suffice to discharge his other private obli- 
 gations, all of them enhanced in the same de- 
 gree? Even if it should, what a prodigious re- 
 volution will have been quietly effected in a 
 few years, by that bill for restoring cash pay- 
 ments, which was passed with acclamations by 
 the wealthy members of the state, but which 
 has brought with it so much misery to the pro- 
 ductive classes ! and how truly does it illus- 
 trate the remark of a late eminent christian phi- 
 losopher : '* In the moral system, it is a part of 
 the wise arrangements of Providence, that no 
 member shall suffer alone ; that if the lower 
 classes are involved in wretchedness and beg-
 
 CURRENCY FALLACIES REFUTED. 25 
 
 gary, the more elevated shall not enjoy their 
 prosperity unimpaired." * 
 
 FALLACY THE SEVENTH. 
 
 " That this depreciation of paper money, in com- 
 parison with gold, would entirely alter the rela- 
 tion of debtor and creditor, and enable Govern- 
 ment to pay the fundholder with a smaller 
 portion of the 7iational income^ 
 
 By the term, a depreciated currency, is in- 
 tended to be conveyed the idea that the money 
 will be of less value than it ought to be. To 
 judge of this, w^e have to consider what value 
 it should possess. The Editor of the Times is 
 explicit enough on this head ; he affirms, that if 
 it be not fully equal to gold and silver in ex- 
 change at all times, it must be a depreciated 
 currency. The test is true in one sense : in com- 
 parison with gold or silver, our paper money 
 will be, doubtless, a depreciated currency. 
 But its equality with gold and silver may not 
 be the value which it ought to possess ; and, 
 therefore, though with reference to gold, our 
 paper money may be said to be depreciated, it 
 does not follow that it is a deteriorated currency. 
 
 To justify such a charge, the depreciation 
 should be positive, and the addition made to 
 our circulating medium by the use of paper, 
 
 * Rev. Robert Hall's Works, Vol. iii. p. 248.
 
 26 CUURENCY FALLACIES REFUTED. 
 
 should represent no value whatever, being 
 merely an increase of the quantity of money 
 in the country, which adds to prices without 
 any necessity, and so leaves all parties in 
 the end j ust where it found them. This is the 
 Editor's notion of paper money ; it is that of 
 others also ; but where are the circumstances 
 which justify it to be met with ? Certainly not 
 in England ; for no man here adds to the cir- 
 culating medium by issuing notes which are of 
 no value : nor would any one take them if he 
 did. There have been, it is true, swindlers in 
 banking as in other trades ; but to lay it down 
 as a principle, that every addition to the cur- 
 rency, beyond the limit of the precious metals, 
 is a useless increase ; one that does not, in effect, 
 represent any additional value, — is either a great 
 fallacy or a gross blunder. 
 
 In the next chapter will be shewn, how ut- 
 terly inapplicable this description is to that 
 paper money which was issued during the war, 
 and how unfounded is the charge of the Editor 
 of the Times, that to return to it " would be a 
 spoliation of all mortgagees, creditors, and fund- 
 holders.''
 
 27 
 
 PART II. 
 
 PAPER MONEY VINDICATED. 
 
 A CERTAIN measure of value is necessary, if we 
 would hold commerce with foreign countries ; 
 and the average price of wheat over the con- 
 tinent of Europe in gold or silver, gives that 
 measure. If three quarters of an ounce of silver 
 be the average value of a bushel of wheat in Eng- 
 land, and that quantity be coined into 3,y. lOld. 
 (at 5^. 2cl. per ounce) the quarter will be worth 
 31^. \i one ounce of silver be its average equi- 
 valent, the price of the quarter will be 41^. M. * 
 To preserve perfect uniformity of price in gold 
 or silver at all times, on the average of seven or 
 ten years, it should be the duty of Parliament, 
 on any petition to that effect being presented, 
 from those who conceive themselves aggrieved, 
 to ascertain whether the measure had departed 
 from the standard ; that is, whether since the 
 
 * I have stated the natural price of Corn in silver or gold 
 thus hypothetically, because opinions differ on the subject of 
 its actual amount.
 
 28 PAPER MONEY VINDICATED. 
 
 last arrangement, more or less silver or gold 
 had become the average natural equivalent of a 
 bushel or a quarter of wheat ; and to alter the 
 shilling and the pound sterling in weight ac- 
 cordingly. Unless this be done, a sudden in- 
 flux of the precious metals might take place, 
 from new discoveries of mines, or from improved 
 methods of working those in use, which would 
 have the effect, in a few years, of altering the 
 measure of value to so great a degree, that 
 fixed sums, payable for a long series of years, 
 might not be of half the worth they are at pre- 
 sent. How many payments made by public 
 companies, and other corporate bodies, on ac- 
 count of trusts confided to them centuries ago, 
 are reduced to comparatively nothing, from the 
 want of such a committee for the supervision of 
 the coin as that which is proposed ! How many 
 charities have been injured by inattention to 
 this plain duty of government ! Perhaps no- 
 tliing has so much contributed to deter people 
 from making charitable bequests in money, as 
 the thought, that in the lapse of years, it will 
 have become of little value. But without tak- 
 ing so wide a range, every landlord who lets a 
 farm or house on lease, and every tenant also 
 who takes either, ought to be protected from 
 such natural increase or diminution in the value 
 of our coin, as he finds to be attended with 
 practical loss or inconvenience to himself. 
 From 1287 to 1338, that quantity of silver.
 
 PAPER MONEY VINDICATED. 29 
 
 which is now coined into SSs. Sd., would pur- 
 chase on the average a quarter of wheat. From 
 1339 to 1451, the price of a quarter was 
 21^. 3d. of our present money. From 1453 to 
 1560, it took only 10^. of the same money to 
 buy a quarter of wheat. During the whole 
 period, money had become so enhanctd in 
 value, that one shilling was worth in the last 
 hundred years as much as three had been in the 
 first hundred years, and as two in the middle 
 period : so that in the course of a century, he 
 who contracted at the beginning to pay a cer- 
 tain sum then called 100/., had to pay at the 
 end, what was still called 100/. though it was 
 really worth 200/. From 1561 to 1700, the value 
 of silver decreased in comparison with corn, 
 being on the average of that whole period ex- 
 changeable in the proportion of 45*. against 
 the quarter of wheat, by which the receivers of 
 fixed income were injured, being paid not quite 
 25/. in the name of 100/. 
 
 Under the direction of a committee for the 
 supervision of the coin, the pound in gold or 
 silver will always represent, or be exchangeable 
 for, an equal quantity of wheat, taking the ave- 
 rage of a number of years. Let it be supposed, 
 then, that 31^. or 356. or 40^*. is the true 
 measure of value for a quarter of wheat in Eng- 
 land ; as there is no doubt that this sum repre- 
 sents the natural value of wheat, it is just and 
 necessary as a measure of value between differ-
 
 30 PAPER MONEY VINDICATED. 
 
 ent nations, for without this or some such mea- 
 sure, they could not adjust the value of their 
 respective commodities in the common market 
 of the civilized world. But what is just and 
 necessary, between the inhabitants of different 
 countries, may not be equally or at all so be- 
 tween the different inhabitants of the same 
 country. Before we can determine whether 
 they are all entitled to be treated as the inha- 
 bitants of another state, and paid according to 
 the natural measure of value, we must see 
 whether there are not some circumstances, af- 
 fecting the value of money, applicable to them 
 and not to the foreigner. 
 
 They differ from him in the fact of being 
 liable to a different degree of taxation. Every 
 man is protected in his person and property by 
 the state in which he resides, for which pro- 
 tection he has to pay the state ; and this is evi- 
 dently a payment, which neither ought to be 
 nor can be exacted from the inhabitants of a 
 foreign state, by another power, but which 
 may reasonably enough be required of the de- 
 nizens of each particular country. Whether it 
 ought to be so required from them, as to cause 
 any difference in the price of commodities, will 
 depend upon the mode of taxation. 
 
 Such taxation as falls upon realised property, 
 independent of trade, needs not and will not 
 add to prices. Whatever sums are levied as a 
 tax on land, or on capital in the abstract, as on
 
 PAPER MONEY VINDICATED. 31 
 
 property in the funds, are directly taken from 
 the parties, and need not add to prices. If the 
 landowner says, * I pay all the burthens of the 
 state, and for some of them, at least, I ought to 
 be reimbursed : it is but fair, therefore, that I 
 should be allowed to demand more reiit for my 
 land than before this tax was levied :' the 
 answer would be — 'If you increase the rent of 
 your land, the farmer must have an increased 
 price for his corn, — and the manufacturer who 
 consumes it, paying that advanced price, must 
 have an increased price for his productions. 
 If he gets this by our interdict of foreign goods, 
 except under payment of a certain duty, which 
 is the only way in which he can get it and keep 
 it, you must pay a higher price for every thing 
 you buy, and the outgoings would, in that case, 
 greatly exceed the additional sum you receive 
 from your increased rent. If we do not pro- 
 tect him from foreign competition, he cannot 
 produce his goods with so much advantage to 
 himself here as abroad, and he will soon trans- 
 port his manufacture to countries where corn 
 is cheaper, by which means you will lose far 
 more in the end than the tax for which you 
 are contending.' — Such taxes then, as these, 
 which do not require or necessarily lead to an 
 advance in the price of commodities^ may be 
 levied without causing a difference to the indi- 
 viduals of a country in the price paid by them, 
 and by those of other countries. But this is
 
 S2 PAPER MONEY VINDICATED. 
 
 not the general character of our taxation ; there 
 may be, therefore, other circumstances con- 
 nected with it which will have an effect on 
 prices, considered with reference to individuals 
 of the same country. 
 
 That there are such circumstances will be 
 clearly evident, when we consider that our large 
 revenue is nearly all derived from duties on the 
 following articles : vnalt, hops, beer, wine, spi- 
 rits, sugar, tea, coffee, tobacco and snuff ;— 
 corn, butter, cheese, currants and raisins, cotton, 
 wool, silk, printed goods, hides and skins, paper, 
 soap, candles and tallow, auctions, licences, coals, 
 glass, timber, bricks, &c. From the taxes laid 
 on these articles, under the head of cus- 
 toms, and excise, we raise the sum of forty mil- 
 lions annually, and from the stamps, assessed 
 ta.ves, and post-office about fourteen millions 
 more, making in the whole about fifty-four 
 millions for the year 1830. All these taxes, 
 or nearly all, are not directly drawn from the 
 parties who are intended ultimately to pay 
 them : they are first paid by the producer or 
 vender, and he charges them with some profit 
 for his outlay, to the consumer, whence they 
 are called taxes on consumiption. 
 
 Now how is the producer to charge these 
 taxes to the consumer, unless he can add them 
 to the natural price ? There is clearly no other 
 way. But if he adds them to the natural 
 price, his commodities will then be so much
 
 PAPER MONEY VINDICATED. 33 
 
 dearer than the same kind of articles produced 
 on the continent, by all the difference between 
 our taxation and that of other countries. The 
 consequence of this will be, that the English- 
 man cannot afford to take the same price, in the 
 common market of Europe, which will compen- 
 sate men of other countries : he must have 
 more, or he must lose the extra amount he has 
 paid in taxes. He cannot get more in an open 
 market, and therefore he is shut out altogether; 
 or he loses the amount of his taxes, in which 
 case, the producer and not the consumer, pays 
 those taxes which are then erroneously called 
 taxes on consumptioti. 
 
 Perhaps you will say, ' He has the home mar- 
 ket to himself, and in that he gets repaid his 
 tax.' If Government were to lay protecting 
 duties on all the above commodities, and the 
 preventive-service men were to exercise a vigi- 
 lant scrutiny, we might probably succeed in 
 keeping up such a price at home, in general, as 
 would repay him : but he is at all times liable 
 to be injured in the extent of his trade, by the 
 successful issue of smuggling transactions ; to 
 guard against which, additional sums of money 
 must be spent, which will render additional 
 taxes necessary. 
 
 We will suppose, however, that he could be 
 protected from competition with foreigners 
 in the home market, on all articles specially 
 taxed ; what in the next place is to save him 
 
 D
 
 34 PAPER MONEY VINDICATED. 
 
 from that same competition in all other things ? 
 Men who pay taxes on com, beer, clothing, <^c. 
 on every thing, in short, which is needful for 
 their support or comfort, while engaged in pro- 
 ducing the various commodities by the sale of 
 which they live, must charge for everything they 
 produce, a price as much higher than the natural 
 price, as that taxation which is peculiar to them 
 amounts to. They must, therefore, be enabled 
 to advance every commodity that can be offered 
 for sale, to a higher price than their continental 
 rival, or they are not repaid in the same degree 
 that he is. All competition must, therefore, be 
 guarded against in the home market, in every 
 kind of goods, or the Englishman has not justice 
 done him. As this cannot be done, it follows, 
 that with a metallic currency, he cannot escape 
 suffering in the degree in which he is taxed be- 
 yond those persons, who are engaged in the pro- 
 duction of commodities in other countries. 
 
 *But there are some articles which the foreigner 
 produces, and the Englishman cannot pretend 
 to produce, such as wine, brandy, &c., he is at 
 least not liable to injury here V I fear, however, 
 that this fact also will militate against him. — 
 Whatever is imported for sale here, ought to be 
 paid for by the export of some other articles. 
 The foreigner has a bill on England for the 
 amount of his wine, which he wants to make 
 the most of. If he buys English goods with it, 
 he must pay so much more for them as the tax-
 
 PAPER MONEY VINDICATED. 35 
 
 ation adds to natural price : he prefers going 
 to a cheaper market, and consequently receives 
 gold for his bill, with which he can buy more 
 goods in other countries than here. Heavy sa- 
 crifices are made by the Englishman to prevent 
 this ; and especially after his gold has been 
 carried away his price lowers ; for he has then 
 to tempt the foreign purchaser, in order to get 
 it back again by the superior cheapness of our 
 commodities compared with those of less taxed 
 countries : in doing this, he loses even more than 
 the taxes which he has paid ; and that he loses 
 these, is the point which I have been proving. 
 
 If this representation be true, it will follow, 
 that prices in a metallic currency cannot be 
 maintained in England, for a continuance, higher 
 than they are in neighbouring countries, or than 
 natural price warrants. By a desperate struggle 
 for life or death, our productive classes have for 
 a long time upheld them, in defiance of every 
 disadvantage under which an unwise govern- 
 ment has compelled them to labour — but prices 
 still are gradually sinking, and must soon find 
 their true level. For sixteen years the produc- 
 tive classes have been paying the greater part 
 of forty millions a year in taxes, which ought 
 not to have been required of them ; taxes which 
 should have fallen altogether on the consumer; 
 and they still remain crushed to the earth by 
 this terrible visitation upon them of a burthen 
 which they were never intended to bear, nor 
 
 D 2
 
 36 PAPER MONEY VINDICATED. 
 
 can bear much longer. Forty millions to be 
 taken every year from the working classes, to 
 compensate for errors in legislation not com- 
 mitted by them, but by their rulers ; besides 
 the greater part of fourteen millions more 
 for stamps and postages, houses and windows ; the 
 whole of which ought to be paid by the rich, or 
 by those who are above want, according to their 
 respective means — is an impost of such mag- 
 nitude, to be made without reason on men who 
 were wholly unprepared to meet, and unable to 
 bear it, as cannot fail to excite feelings, not 
 merely of discontent in those whom it affects, 
 but of indignation in every liberal mind. 
 
 It came suddenly upon the people, and such 
 was their consternation at the time, such their 
 perpetual harass of mind ever since to be able 
 to stand their ground, that they have not yet 
 had leisure to enquire how, or why, or by 
 whose fault, they are thus overwhelmed with 
 difficulties which thicken as the years roll on. 
 In the interim, they are told by those public 
 writers and public speakers who profess to be 
 their friends, that all is going on right ; " wait a 
 little longer, (they say) and we will get the 
 taxes repealed which oppress you :" but if a 
 mistake has been committed, if those tai'es ought 
 not to fall upon them at all, why should they 
 wait a day ? Why should they not petition at 
 once that these taxes should be charged as be- 
 fore to the consumers of commodities ? If go-
 
 PAPER MONEY V [ \ DI C A JED. 37 
 
 vernment will not furnish the meam of carrying 
 them to their destination by an issue of paper 
 money, they can, at all events, commute them 
 for a property ta.v, and so relieve the producer. 
 But whatever is done should be done quickly; 
 for thousands of lives are lost while we hesitate. 
 During- the \var, this country possessed, in 
 paper money, the power of adding the taxes to 
 the natural price of all commodities, and the 
 consequence was, that then our working classes 
 fared equally well whether the taxes were in- 
 creased or not. If a tax of ^s. was laid for in- 
 stance on a hat, the manufacturer or vender 
 charged the duty as well as the natural price, 
 and what was previously 21*. became 2As. — 
 When the duty on colonial produce or any other 
 commodity was raised, the importer added the 
 extra tax to the natural price, which raised the 
 value of the article to a remunerating height, 
 and injured no one. Why can we not allow 
 this to be done again ? — One argument against 
 the return to a system of paper currency is, that 
 it will prevent our having any foreign trade. As the 
 Editor of the Times does not repeat this assertion 
 among his objections to a paper currency, I am 
 inclined to think that he sees the futility of it. 
 A paper currency is in fact the only means 
 whereby we can enjoy a perfectly unrestricted 
 trade with all the countries in the world, and 
 retain our taxation. For if the .taxes are laid 
 with any skill, they may be made to raise the
 
 38 PAPER MONEY VINDICATED. 
 
 prices of goods so equally, that we shall have no 
 one hurt as a producer, either by the taxes he 
 has to pay, or by the competition of foreigners, 
 who are free from those taxes. The hat-manu- 
 facturer, who makes an article for which 21*. is 
 the natural price, but who receives 24*. to cover 
 the tax in addition, may, if the paper currency 
 of the country exceed the metallic currency in 
 the proportion of one-seventh, allow the French 
 manufacturer to send his hats here, and sell 
 them for 24*. ; knowing well that before the fo- 
 reigner can realize that sum in gold or silver, 
 he must exchange the paper money with which 
 it is paid, into the precious metals, atthe market 
 price ; that is to say, he must buy gold with 
 that paper money, and the difference will leave 
 him only the natural price of 2]*. The English 
 manufacturer receives the 24*. and with it pays 
 his rent and taxes, and the wages of his work- 
 men : he is therefore reimbursed the tax, and 
 left uninjured by the introduction of foreign 
 goods. This case will apply to all other kmds 
 of English manufactures, when their price seems 
 to be endangered by the admission of untaxed 
 articles of the same kind from abroad. 
 
 But it will happen that sometimes an exces- 
 sive duty is thought proper to be laid on some 
 goods, — a duty far beyond the ability of paper 
 money, at the rate of its ordinary exchange with 
 gold, to reimburse the producer, in addition to 
 the natural price. On colonial produce, for
 
 PAPER MONEY VINDICATED. ■ 39 
 
 instance, taxed sometimes as high again as its 
 natural value, the general difference in exchange 
 between paper and metallic money cannot com- 
 pensate the English vender in free competition 
 with the foreigner. In all these cases, therefore, 
 a duty must be laid on the importation of these 
 articles from other countries, sufficient to bring 
 the Englishman on a fair level with his foreign 
 antagonist. 
 
 In articles of export, the difference between 
 paper and metallic money will yield our pro- 
 ducers every needful protection. If they sell 
 their goods abroad but for the natural price, and 
 none of their rivals can afford to take less, that 
 price, being the quantity of gold and silver re- 
 presenting the untaxed article, will, on the ave- 
 rage, exchange in England for so much paper 
 money as will represent not only the natural price, 
 but the taxation to which our producers are 
 subjected. If here, however, excessive duties 
 have been charged on any commodities, the pro- 
 ducer must be allowed a drawback on carrying 
 them abroad. 
 
 Under this system then of a paper currency, 
 which is capable of adding to prices so much 
 as taxation requires beyond the natural expres- 
 sion of their value in gold and silver, the pro- 
 ducer will have nothing to complain of, lay your 
 taxes as you will, provided only that in all 
 cases of excess, he is guarded from unfair com- 
 petition by a protecting duty or a drawback.
 
 40 PAPER MONEY VINDICATED. 
 
 It is equally clear also that the consumer of 
 those commodities in this country will have no 
 reason to object to such a system, if he is charged 
 only the t(Lv in addition to the natural price ; 
 for when the tax was laid, it was designed to 
 fall on the consumer. 
 
 The only way in which he can be injured is, 
 when paper money is depreciated, properly speak- 
 ing : that is, when it is issued in such abundance 
 as to advance commodities beyond the level of 
 their natural and taxation price added together. 
 Whether it was ever so depreciated during the 
 war, will be a very fit subject of enquiry. 
 
 In order to ascertain this point, we must 
 endeavour to discover, first, what addition the 
 taxes ought to have made to natural prices 
 during the war ; secondly, whether prices r/c^z;fl//j/ 
 advanced in that proportion ; thirdly, whether 
 bank notes, which were the means of making 
 this addition, exceeded in amount the demands of 
 taxation, and the increase of price to which it 
 led. 
 
 On a huge hill, 
 Cragged and steep, Truth stands, and he that will 
 Reach her, about must and about it go ; 
 And what the hill's suddenness resists, win so.* 
 
 The increase of the revenue is one test of the 
 addition which ought to have been made to na- 
 tural prices. In 1792, the income from taxes 
 
 * Donne.
 
 PAPER :\rOX£V VINDICATED. 41 
 
 was 17,962,851/. : in 1816, it amounted to 
 61,863,350 millions ; shewing an increase of 
 seven to two, compared with 1792. 
 
 The progress of the national debt furnishes 
 us with another criterion. At the Revolution, 
 in 1689, it was 664,263/. " In 1697 the defi- 
 ciences of several taxes were charged upon 
 what was then called the first general mortgage 
 or fund."* 
 
 THE AMOUNT OF THE PUBLIC DEBT OF GREAT BRITAIN 
 
 Funded and unfunded, 
 Was on the 31st December, 1697, £21,515,742 
 
 Which was reduced in - - 1701 to 16,394,701 
 
 Increased by the war from 1702 in 1714 — 53,681,076 
 Amounted in - - - 1722 — 55,282,978 
 
 Reduced in 17 years of peace, - 1739 — 46,954,623 
 Raised by the wars from 1739, in 1748 — 78,293,313 
 Reduced in - - - -1755— 72,289,673 
 Raised by the war ending 1763, in 1764 — 139,516,807 
 Reduced in - - - -1775—129,146,322 
 Increased by the war ending - 1784 — 249,851,628 
 Reduced in - - - - 1793 — 239,350,148 
 Increased by the war ending - 1816 — 864,822,540 
 Remaining in - - - - 1831 — 789,566,480 
 
 According to this table, the increase of taxa- 
 tion, by the late war, has not been less than 
 as three to one. 
 
 What effect this increase had on prices may 
 be ascertained by the following tables. 
 
 • Smith's Wealth, &c., M'Culloch's edition, vol. 4, p. 12.
 
 42 
 
 PAPER MONEY VINDICATED. 
 
 Ten years 
 ending in 
 
 Highest, 
 s. d. 
 48 5 
 
 Lowest. 
 
 s. d. 
 
 ..23 8 
 
 Average 
 
 .. 35 
 
 Price 
 d. 
 
 2 
 
 45 1 
 
 .. 22 
 
 1 
 
 .. 32 
 
 1 
 
 39 8 
 
 .. 28 
 
 10 
 
 .. 33 
 
 3 
 
 53 4 
 
 .. 26 
 
 10 
 
 .. 39 
 
 3 
 
 59 1 
 
 . 40 
 
 7 
 
 .. 51 
 
 4 
 
 54 3 
 
 .. 36 
 
 2 
 
 .. 47 
 
 8 
 
 56 2 
 
 .. 42 
 
 3 
 
 .. 50 
 
 9 
 
 81 6 
 
 .. 42 
 
 3 
 
 .. 54 
 
 4 
 
 128 6 
 
 .. 54 
 
 
 
 .. 81 
 
 2 
 
 128 
 
 .. 76 
 
 
 
 .. 97 
 
 6 
 
 PRICE OF CORN. 
 The highest, lowest, and average price per quarter of 
 " the best or highest priced wheat," at Windsor market, 
 taken from the audit books of Eton College, was for 
 the 
 
 r 1735 
 1745 
 1755 
 
 1765 
 1775 
 
 1785 
 1792 
 1795 
 1805 
 L 1815 
 
 This table exhibits an increase in price of 
 two to one during the late war. 
 
 By the returns of the inspector of averages 
 for England and Wales, the price of middling 
 wheat per quarter was 
 
 For the year 1792 
 
 Four years ending 1795 
 
 Ten 1805 
 
 Ten 1815 
 
 Exhibiting an increase of prices during the war 
 of rather more than two to one. 
 
 It may, however, be argued, that these state- 
 ments of the increase of taxation, and of its al- 
 leged effect on prices, are no proof of the ad- 
 dition which ought to be made to prices, as we 
 have no starting point to proceed from. To this 
 
 Highest, 
 s. d. 
 
 Lowest. 
 
 4-. d. 
 
 Average, 
 s. d. 
 
 42 11 
 
 74 2 
 
 .. 42 11 
 
 .. 54 5 
 
 118 3 
 
 .. 50 3 
 
 ..75 2 
 
 125 5 
 
 .. 64 4 
 
 ..90
 
 PAPER MONEY VINDICATED. 43 
 
 it may be answered, that the natural price of corn 
 gives that starting point ; but to ascertain what 
 this is, we must travel somewhat farther back, 
 and trace the consequences of the national debt 
 in its influence on the price of corn, from its 
 commencement in 1697. 
 
 " In 1688, Mr. Gregory King, a man famous 
 for his knowledge of matters of this kind, esti- 
 mated the average price of wheat in years of 
 moderate plenty, to be to the grower 3.y. Qd. the 
 bushel, or 28f. the quarter. The grower's 
 price I understand," says Dr. A. Smith, "to be 
 the same with what is sometimes called the con- 
 tract price, or the price at which a farmer con- 
 tracts for a certain number of years to deliver a 
 certain quantity of corn to a dealer. As a con- 
 tract of this kind saves the farmer the expense 
 and trouble of marketing, the contract price is 
 generally lower than what is supposed to be 
 the average market price." * This, being the 
 price of middle wheat, requires the addition of 
 one-eighth, according to the allowance of Dr. 
 Smith, in similar cases, to bring it up to the 
 level of the best wheat.f In Windsor market, 
 the price therefore would be 31*. 6d., to which 
 if we add 2*. per quarter for the difference be- 
 tween the contract and market price, the na- 
 tural value of the best wheat will be 335. M. 
 per quarter. This agrees with the estimate 
 
 * Smith's Wealth, Vol. I. p. 321. f Vol. 1. p. 3)6.
 
 44 PAPER MONEY VINDICATED. 
 
 formed by Capt. Smith, of the natural price of 
 wheat, who says, '' The common price of wheat 
 throughout Europe varies but little : it is no- 
 torious that it is never below 18 livres the se- 
 tier ; " which is equal, as he states, to 33^. 6d. 
 the London quarter. " The average price of 
 wheat for the last 79 years (he adds in a note), 
 hath been 33^. 2y. at Windsor." * Dr. Adam 
 Smith makes the average price of the best wheat 
 somewhat higher than this ; but middle wheat 
 is stated by him to have been 32^. per quarter 
 for the first 64 years of the present century. 
 By the returns given in the preceding table, 
 it appears that, from 1725 to 1755, the average 
 price of the best wheat at Windsor market was 
 only 33.9. 6d. per quarter. Thus it appears, 
 that corn advanced during the war to twice its 
 previous, and to three times its natural price. 
 
 Now corn is the standard of value for all things, 
 and, therefore, if it be advanced in price, all 
 other necessaries of life will advance, and they 
 who consume them, ought to have an increase of 
 wages in proportion. It will appear that such 
 advance did take place, and that the consumers, 
 for their wages, had such an increase, or at least 
 one which did not ei'ceed the proportion required 
 by the amount of the taxes, or the price of 
 corn, according to the following tables. 
 
 * Tracts on the Corn Trade. The second edition was 
 published in 1766.
 
 PAPER MOXEV VINDICATED. 45 
 
 PRICES PAID AT GREENWICH HOSPITAL, 
 from 1790 to 1813.* 
 
 In the course of these twenty-three years, the prices 
 on an average advanced as follows : — 
 
 Flour from 
 
 - 43 4 to 93 
 
 pr. sack, 
 
 Cheese 
 
 - 4 — 
 
 8 per lb. 
 
 Butcher's meat 
 
 - 36 10 — 75 
 
 1 per cwt. 
 
 Butter 
 
 Qh— 1 
 
 2 per lb. 
 
 Oatmeal 
 
 - 5 3-12 
 
 3 pr.bush. 
 
 Carpenters' wages - 
 
 Bricklayers' 
 
 Masons' 
 
 - 2 6— 5 
 
 - 2 4—5 
 
 - 3 10— 5 
 
 6 per day 
 
 3| 
 
 6 
 
 Thus these charges increased in the same pro- 
 portion with the increase of taxation and the price 
 of corn, but they did not exceed either. The 
 same increase is exhibited in the 
 
 RATE OF WAGES FOR AGRICULTURAL LABOURERS, 
 IN CUMBERLAND, 
 
 From the tables of Mr. Rooke. 
 
 s. d. 
 
 For the 7 years ending 1792 they were 7 3 per week. 
 1813 15 2 
 
 A further proof of the increase which taxation 
 has called for, in the monetary value of all ar- 
 ticles in England, is to be found in the following 
 
 * From tables drawn up by Mr. Attwood, published in Mr. 
 Cayley's Commercial Economy, p. 111.
 
 46 
 
 PAPER MONEY VINDICATED. 
 
 OFFICIAL AND DECLARED VALUE OF EXPORTS 
 
 of British and Irish produce and manufactures for the 
 following years. Pari. Papers. No. 243, Session 1830. 
 
 Yrs. ending 
 5th Jan. 
 
 1799 
 1800 
 1801 
 1802 
 1803 
 
 Official 
 Value. 
 
 1804 
 1805 
 1806 
 1807 
 1808 
 
 1809 
 1810 
 1811 
 1812 
 1813 
 
 1814 
 
 1815 
 1816 
 1817 
 
 1818 
 1819 
 
 1820 
 1821 
 
 1822 
 1823 
 1824 
 1825 
 1826 
 
 1827 
 1828 
 1829 
 1830 
 1831 
 1832 
 
 £18,556,891 . 
 
 22,284,941 . 
 
 22,831,936 . 
 
 24,501,608 . 
 
 25,195,893 . 
 
 20,042,596 . 
 
 22,132,367 . 
 
 22,907,371 . 
 
 25,266,546 . 
 
 22,963,772 . 
 
 24,179,854 . 
 
 32,916.858 . 
 
 33,299,408 . 
 
 21,723,632 . 
 
 28,447,912 . 
 
 Records desti 
 
 32,200,580 . 
 
 41.712,002 . 
 
 34,774,521 . 
 
 39,233,467 . 
 
 41,960,555 . 
 
 32,983,689 . 
 37,820,293 . 
 
 40,194,681 . 
 
 43,558,488 . 
 
 43,166,039 . 
 
 48,024,952 . 
 
 46,453,022 . 
 
 40,332.854 ., 
 51,279,102 .. 
 52,019,728 . 
 55,465,723 . 
 61,140,864 .. 
 60,683,933 ., 
 
 Declared 
 Value. 
 
 . 31,252,836 
 
 . 35,903,850 
 
 . 36,929,007 
 
 . 39,730,659 I 
 
 . 45,102,230 J 
 
 . 36.127,787^ 
 
 . 37,135,746 
 
 . 37,234,396 
 
 . 39,746,581 
 
 . 36,394,443 
 
 . 36,306,385] 
 
 . 46,049,777 
 
 Total of 5 years, 
 
 £188,918,582 
 
 . 113,371, 269 
 
 75,547,313 
 
 186,638,903 
 
 113,312, 652 
 
 73,326,351 
 
 199,542,232 
 47io6o,926 y HO.567.564 
 
 . 30,850,618 
 . 39,334,526 j 
 
 oyed by fire. 
 
 . 43,447,373] 
 49,653,245 
 
 58,974,668 
 
 218,958,943 
 
 40,328,940 > 1^^>B81> 125 
 29,077,818 
 
 70,803,982 
 69,821,328 
 
 40,349,235 
 45,180,150^ 
 
 34,252,251 \ 
 35,569,077 / 
 
 35,823,127^ 
 
 36,176,896 
 
 34,589,410 
 
 37,600,021 
 
 38,077,330^ 
 
 30,847,528^ 
 
 36,394,817 \ 
 
 36,150,379 
 
 35,212,873 
 
 38,251,502J 
 
 37,163,647 
 
 Dec. 
 Dif 
 
 Dec. 
 Of. 
 Diff. 
 
 Dec. 
 
 Of 
 
 Dec. 
 
 Of. 
 Dif 
 
 Of- 
 Dec. 
 
 982,654 Dif. 
 
 221,397,182 
 182,266,784 
 
 Of 
 Dec. 
 
 39,130,398 Df. 
 
 260,238,271 
 176,857,099 
 
 Of 
 Dec. 
 
 83,381,172 DiJ.
 
 PAPEU MONEY VINDICATED. 47 
 
 The official value is estimated agreeably to the 
 principle acted on in 1698, immediately after 
 the establishment of the Bank of England ; this 
 may be considered to represent the ««//^;y// price. 
 The declared v'diue is the worth of the goods at the 
 market price of the day : so that this is the price in 
 paper money. In 1800, those exports were 
 worth, at the official value, 22 millions, which 
 at the market price, were declared worth 36 mil- 
 lions. In 1830, those goods were worth, at 
 their official value, ^Q millions, which at the 
 market price were declared to be worth only 35 
 millions ; thus the same goods which produced 
 in 1800 and 1830, at the market price, 36 mil- 
 lions, (speaking in round numbers) cost the pro- 
 ducers in 1800, but 22 millions of metallic 
 money, and in 1830, not less than 56 millions 
 of the same money — a difference of 5 to 2. 
 With a paper currency, our manufacturers would 
 not have been compelled to lose the sum which 
 taxation ought to have added to the natural 
 price, as they actually did in the latter period, 
 except in so far as the loss has been borne by 
 the poor operatives and their miserable children, 
 working at reduced wages during increased 
 hours. That which was really worth ^^ millions, 
 would have been sold for as much, if not more ; 
 or rather that which was sold at the market 
 price for 36 millions, would not have cost the 
 producers more than that sum. From 1799 
 to 1813, a period of 14 years, the market price
 
 48 PAPER MONEY VINDICATED. 
 
 of our exports annually exceeded the natural or 
 real price in the proportion of 18 to 12 : shewing 
 a difference of one-third on all the foreign 
 trade of that long period. From 1815 to 1819, 
 the proportion was only 21 to 18, leaving a 
 difference of one-seventh . In 1 820 and 182), the 
 two prices were at jo^r. From 1822 to 1826, the 
 real money value exceeded that of the market 
 price in the proportion of 22 to 18, a difference 
 of one-seventh ; and in the last five years it 
 has been as high, on the average, as 26 to 17 ; 
 producing a difference of one-third. Our posi- 
 tion, therefore, is exactly reversed; and the 
 productive classes are losing every year as 
 much as they formerly gained, by the change 
 from a paper to a metallic currency. 
 
 Having seen in what degree prices might be 
 expected to advance, and in what degree they 
 did advance, we have only to look to the issues 
 of paper money, to learn whether the means 
 were supplied in greater abundance than ne- 
 cessity demanded. If the issues of the Bank at 
 the end of the war did not exceed the proportion 
 of 5 to 2, as compared with the issues at its 
 commencement, they were not beyond the limit 
 required by the increase which taxation gave to 
 prices during the war.
 
 PAPER MONEY VINDICATED. 49 
 
 THE HIGHEST ISSUE OF BANK OF ENGLAND NOTES, 
 
 In 1791 was 12,163,240 
 
 — 1793 — 12,366,840 
 
 — 1797 — 11,215,330 
 
 — 1803 — 17,859,570 
 
 — 1813 — 23,844,050 
 - 1814 — 28,763,200 
 
 — 1817 — 29,543,770 
 
 The increase, therefore, was not greater than 
 its due proportion ; having kept pace, it seems, 
 as nearly as possible, with the causes which 
 gave rise to it. 
 
 Hitherto then we have seen no signs of a de- 
 preciated cxxxyqwcy , — in the sense of an excessive 
 issue causing a deterioration of the money of 
 the country, — which is the meaning attached 
 to the term by the Editor of the Times. Com- 
 pared with gold, it might be said to be depre- 
 ciated, because from 1793 to 1814, an ounce of 
 gold rose, in respect to paper, from 776-. 101^. to 
 104^. ; but with equal propriety, paper money 
 might be said to be depreciated with respect to 
 corn, and other things. The difference, however, 
 was caused, as we have seen, not by depre- 
 ciation, but by the demands of taxation ; and if 
 the producer cannot bring corn and other com- 
 modities to market for less than this sum, when 
 he is obliged to pay these taxes, it constitutes 
 a fair price, as proper to be paid by us, as the 
 natural price alone would be in an untaxed 
 
 E
 
 50 PAPER MONEY VINDICATED. 
 
 country. Thus the depreciation, if it be proper 
 to call it by that name, is comparative, not posi- 
 tive — a jw^^, and not an unjust measure, if it does 
 not exceed its proper bounds ; and altogether 
 different in principle, therefore, from such a de- 
 preciation as would have ensued, had gold, by 
 the discovery of new mines more easily worked, 
 been doubled in quantity by the same con- 
 sumption of corn : this would have been a posi- 
 tive depreciation, chargeable with all the evils 
 erroneously attributed to a paper currency by 
 the Editor of the Times ; but I question whether 
 it would have received his notice or objurgation. 
 
 Having vindicated paper money, issued dur- 
 ing the war, from the charge of depreciation, in 
 the sense of causing a deterioration of the cur- 
 rency, for that is the more correct mode of de- 
 signating the nature of the injury it is supposed 
 to have inflicted, — I will now go much further, 
 and affirm, that the paper money of perfectly sol- 
 vent parties, persons well known to have property 
 abundantly sufficient to cover the amount of 
 their issues, can never, under any circum- 
 stances, become depreciated, so as to cause a 
 deterioration of the currency. Let us take the 
 case of a public Banking Company*, with a paid- 
 up capital, amply suflficient to cover all losses. 
 
 * Not a psewdo-Banking Company, established by specu- 
 lators for the mere purpose of discounting their own bills. See 
 Evidence of Mr. Burgess, on the Bank Charter.
 
 PAPER MONEY VINDICATED. 51 
 
 They shall have invested all their capital in the 
 funds, — and they shall begin business without 
 having- an ounce of gold in their coffers, but 
 still their paper shall never be in excess. Their 
 professed object is to issue their own notes in 
 loans on mortgages of houses and lands, or in 
 the discount of good commercial bills ; or on 
 good and sufficient personal security ; but who 
 will take their notes, you will say, if they are 
 not payable in gold ? If I am a man of landed 
 property, to whom the possession of 10,000/. 
 in ready money is of so great importance, that 
 I am willing to pledge, as security for it, the 
 title deeds of an estate worth 30,000/., I may 
 be induced to apply for that sum, giving a mort- 
 gage of the estate. My object is to pay some 
 debts that I owe, or to make some improve- 
 ments which I calculate will bring me back my 
 money with advantage. If 1 obtain the money 
 to pay my debts, I tender the notes to my cre- 
 ditor, who may be a capitalist, living on his 
 income. He demurs, you may think, to receive 
 them. But suppose he is a shareholder in the 
 company, he will then be glad of them, since he 
 can send them back to the company, and re- 
 ceive credit for the amount, with such interest 
 as they allow for permanent deposits. But he 
 can also do the same if he is not a shareholder. 
 In either case he becomes a creditor again, 
 having this time the security of my estate, 
 which the company hold, and the further secu- 
 
 E 2
 
 52 PAPER MONEY VINDICATED. 
 
 rity of their subscribed capital, as a guarantee 
 for the safety of his loan. It is not likely that 
 under these circumstances he will refuse the 
 notes, preferring a single to a double security. 
 But I may wish to pay them to a tradesman 
 to whom I owe a bill. Will he refuse them, 
 when he knows that they are taken as money 
 by all the subscribers to the company, even if 
 he does not happen to be one himself? Will he 
 prefer my personal assurance that I will pay him, 
 as soon as 1 am able, to the notes of a company, 
 who have got for every 100/. a security on my 
 estate for 300/., that the notes shall be paid, 
 besides the security of their advanced capital ? 
 He will, of course, take them gladly, as giving 
 him greater security than he had before, and 
 either send them to the bank to be placed to 
 his credit, permanently, like the capitalist, — or 
 employ them, as he may see fit, in making his 
 own payments. But suppose I want to make 
 improvements on my estate, I pay the notes to 
 all kinds of labourers and artisans. They buy 
 what they want with them, and the tradesmen 
 take them and pay them away, or send them to 
 the bank to make interest. 
 
 If I am a manufacturer, and want a bill dis- 
 counted, the notes of such a company are at 
 least as good to me as the bill. I pay the 
 workmen I employ with them — and they the 
 tradesmen, of whom they purchase the neces- 
 saries of life, who either circulate them further
 
 PAPER MONEY VINDICATED, 53 
 
 or send them into the bank. My bill, on Lon- 
 don we will suppose, is now in the company's 
 hands, and some tradesman wants to remit to 
 London : he, perhaps, can use it for this pur- 
 pose — and he esteems it so much the better, 
 as the bank are his guarantees for the payment 
 in addition to the drawer and acceptor : he 
 therefore gladly commutes his notes for this 
 bill, and thus he has discounted the bill in 
 effect, with his own goods, and without risk 
 or inconvenience. I need not pursue the subject 
 further : — from these instances of the working 
 of the system, it is clear that the notes of such a 
 company would soon get into circulation, and be 
 much esteemed throusrhout the neisfhbourhood. 
 
 ' Butlwant gold,' you will say. The company 
 will obtain it for you, if they have it not, but it 
 must be at the market price. They will act as 
 your present banker does, when you wish him 
 to buy stock for you ; they will purchase it at 
 the price of the day, without charging commission . 
 
 ' If this be all, the company may issue notes 
 to any extent : there is no check upon them 
 at all, — and prices will advance iudejimtely, 
 under the pretence that taxation calls for it, 
 till all the unproductive classes are plundered 
 of the whole of their property.' This I most 
 expressly deny. There are checks which cannot 
 be got rid of by the productive classes, so im- 
 perative as to prevent their employing more 
 notes than are absolutely necessary to cover the
 
 54 PAPER MONEY VINDICATED. 
 
 taxation and natural price of their commodities. 
 The consumers, therefore, have nothing to fear. 
 One of these checks is the competition of 
 rival producers at home. If one man is desirous 
 of charging for his goods more than is their due 
 price, others will undersell him. The lowest 
 rate of price at which goods can be re-produced, 
 to allow the means of necessary subsistence to 
 those who are employed in producing them and 
 bringing them to market, will, in a free country, 
 where there is no monopoly, and where all may 
 engage in the business if it appears to be too 
 lucrative in comparison with other trades, be the 
 maximum, and, taking one year with another, will 
 effectually keep down prices to the lowest level. 
 The other check, which is still more severe, 
 more extensive in its operation, and utterly be- 
 yond the possibility either of evasion or con- 
 trol, by combination or other means, arises 
 from foreign competition. Suppose that not 
 only one, but all the farmers in Great Britain, 
 were bent on pursuing their own advantage to 
 such a degree as to demand, and by gradual 
 advances of paper money obtain, a much higher 
 price than the present, which is 53^. per quarter 
 for wheat. As they are entitled to some in- 
 crease, because the present price does not carry 
 with it the taxation that it ought, let us suppose 
 that the increase, to which they may be fairly 
 entitled, should lead to an advance from 53*. to 
 80*. per quarter, but that with this they are
 
 PAPER MONEY VINDICATED. 55 
 
 dissatisfied, and want still more, demanding as 
 much as 100^. per quarter. What is the re- 
 sult ? The foreigner sends his corn here, and 
 sells it for 100.?. in paper money. He takes 
 this to the bank, and buys gold or silver with 
 it. If he can get more gold or silver in exchange 
 than the natural price of his corn will bring 
 him in the common market of Europe, he pro- 
 fits by the transaction to the amount of the 
 difference. This advantage leads him to re- 
 peat the operation, and others to follow his 
 example, till the English farmer is forced to 
 reduce his price to that quantity of paper 
 money, say 80*. which exchanges in England 
 for so much gold or silver as constitutes the 
 foreign price of his corn. Now that which is a 
 check on the farmer, is equally a check on every 
 other producer, with the exception before men- 
 tioned of such as are disproportionably charged 
 with a tax, for which they require, in addition 
 to the difference between paper and gold, a 
 protecting duty on importation, and a drawback 
 on exportation. But if this be true, and it can- 
 not be controverted, it is equally true that 
 paper money, however willing the issuers may 
 be to part with it, and the borrowers to get it, 
 cannot be issued in excess ; for the moment it is 
 so issued, as to yield prices, which exceed the 
 amount collectively of natural and taxation 
 price, foreign competition immediately pulls 
 down the excess, by compelling the English
 
 56 PAPER MONEY VINDICATED. 
 
 producer to keep his goods to himself, if he 
 will not take a fair remuneration for them. In 
 consequence of this, the extra notes retire : 
 and the effect of the home and foreign compe- 
 tition together is, that the unproductive classes 
 can never be charged, for the commodities which 
 they consume, more than the lowest sum neces- 
 sary to remunerate the English producer. 
 
 And since prices generally would be thus 
 kept down by competition, foreign as well as 
 domestic, the price of gold in paper could not 
 suddenly rise from 1/. 10^. to 31., at the will 
 of any man or set of men, which is another 
 accusation preferred against paper money. 
 There could be no sudden increase of value in 
 gold as compared with paper : a fixed and in- 
 evitable necessity would govern at all times the 
 relation of the two ; for the difference between 
 them is nothing but the expression of the rela- 
 tion, which natural value bears to both natural 
 and taxation value ; and when that has once 
 arrived at its proper point, it will remain sta- 
 tionary, neither receding nor advancing, except 
 under well defined circumstances of universal 
 notoriety, which, when they did arise, would 
 act slowly, and which, in their origin, are placed 
 beyond the power of one man to control, or 
 profit by, more than another. Whatever con- 
 tributes to augment or diminish the expen- 
 diture of the State, will affect prices : as tax- 
 ation advances, the difference between paper
 
 PAPER MONEY VINDICATED. 57 
 
 and gold will increase ; as it diminishes, that 
 difference will decrease ; and when our taxes 
 are lowered to the level of those of other 
 countries, paper and gold will be at par. 
 
 As a proof of the uncontrollable influence of 
 the debt in increasing or diminishing the price 
 of corn, I subjoin the following tables. The 
 first gives the amount of the National Debt at 
 certain epochs, commencing immediately after 
 its first formation as a permanent fund. In con- 
 nexion with this is, 1. the assumed price of corn 
 at that period, adding taxation to natural price; 
 2. the actual price taken from the audit 
 books of Eton college, on an average of ten 
 years preceding and including each date. The 
 assumed price is founded on the natural price of 
 the best wheat, viz., 33^. Qd. per quarter, agree- 
 ably to the estimates of the best informed per- 
 sons before mentioned, adding one penny per 
 quarter for every million of the debt at each 
 particular period. It is not pretended that a 
 penny per quarter ought to be the precise sum 
 added to the natural price, to compensate the 
 grower for taxes claimed of him above what he 
 is able to bear ; but if it be found in practice to 
 exhibit an approximation to the truth, suffi- 
 ciently close to enable us to determine in 
 what degree prices may be expected to have 
 risen, to keep close to their just proportion of 
 increase from one stage of the debt to another, 
 it is sufficient for our purpose.
 
 58 
 
 PAPER MONEY VINDICATED. 
 
 I. Table of the Assumed and Actual Price of the best 
 Wheat in Windsor market, at particular ejoocA* of the 
 debt from 1692 to 1820. 
 
 Year. 
 
 Amount of 
 National Debt. 
 
 Assumed Price pr. Qr. 
 at each date, 
 s. d. s. d. 
 
 Actual Price per Qr. 
 for 10 years then ending. 
 
 c /7 o w 
 
 1701 
 1715 
 1739 
 1748 
 1764 
 
 £16,394,701 .. 
 
 53,681,076 .. 
 
 46,954,623 .. 
 
 78,293,313 .. 
 139,516,807 .. 
 
 34 10^ Average 
 37 11 of these 
 37 5 y years, 
 40 
 45 2j 39 10 
 
 0. tl. 
 
 51 2] 
 44 2 
 31 9 
 31 9 
 37 5 
 
 Average 
 of these 
 "decennary 
 periods, 
 39 3 
 
 Average of actual price including every year from 1692 to 
 1764, total 73 years, 38 per quarter. 
 
 1 
 
 Average of actual price including every year from 1765 to 
 1793, total 29 years, 49 5 per quarter. 
 
 1775 
 
 129,146,322 .. 
 
 44 
 
 41 
 
 51 
 
 0!> 50 
 
 1784 
 
 249,851,621 .. 
 
 54 
 
 4}> 50 8 
 
 48 
 
 1793 
 
 239,340,148 .. 
 
 53 
 
 51 
 
 oj 
 
 1797 
 1801 
 
 373,624,762 
 484,465,200 
 
 64 7 
 73 10 
 
 } 
 
 69 2 
 
 56 
 77 
 
 «}68 
 
 Average of actual price including every year from 1794 to 
 1801, total 8 years, 82 10 per quarter. 
 
 1805 577,016,548 .. 
 
 81 7^ 
 
 87 8 ^ 90 4 
 
 81 
 
 21 
 
 1809 650,013,362 .. 
 
 88 
 
 7y 89 
 
 1815 821,740,214 .. 
 
 101 llj 
 
 97 
 
 6J 
 
 1 
 
 Average of actual price including every year from 1802 to 
 1815, total 14 years, 86 9 per quarter. 
 
 1817 848,282,477 .. 104 2 
 1820 843,388,804 ..103 9 
 
 } 
 
 103 11 
 
 101 
 
 96 
 
 98 11 
 
 Average of actual price including every year from 1816 to 
 1 820, total 5 years, 99 8 per quarter.
 
 PAPER MONEY VINDICATED. 59 
 
 II. Table of the Assumed and Actual Price of the 
 best Wheat, at Windsor, for every year from 
 1797 to 1820, with the average actual price 
 for ten years preceding and including. 
 
 
 Amount of 
 
 Assumed Pnce 
 
 Actual I 
 
 'rice 
 
 Average. 
 
 Year. 
 
 Debt. 
 
 each year. 
 
 each year. 
 
 of 10 yrs. 
 
 
 
 s. d. 
 
 s. 
 
 d. 
 
 s. 
 
 d. 
 
 1797 £373,624,762 
 
 .. 64 7 . 
 
 ,. 62 
 
 .. 
 
 59 
 
 8 
 
 1798 
 
 402,759,740 
 
 .. 67 . 
 
 ,. 54 
 
 .. 
 
 60 
 
 2 
 
 1799 
 
 436,672,490 
 
 .. 69 10 . 
 
 ,. 75 
 
 8 .. 
 
 62 
 
 2 
 
 1800 
 
 451,695,763 
 
 .. 71 1 , 
 
 .. 127 
 
 .. 
 
 69 
 
 3 
 
 1801 
 
 484,465,200 
 
 .. 73 10 . 
 
 ,. 128 
 
 6 .. 
 
 11 
 
 1 
 
 1802 
 
 528,839,276 
 
 .. 77 6 , 
 
 .. 67 
 
 2 .. 
 
 78 
 
 6 
 
 1803 
 
 543,229,137 
 
 .. 78 9 
 
 .. 60 
 
 .. 
 
 79 
 
 
 
 1804 
 
 553,644,814 
 
 .. 79 7 , 
 
 .. 69 
 
 6 .. 
 
 80 
 
 6 
 
 1805 
 
 577,016,548 
 
 .. 81 7 , 
 
 .. 88 
 
 .. 
 
 81 
 
 2 
 
 1806 
 
 607,757,722 
 
 .. 84 1 , 
 
 .. 83 
 
 .. 
 
 81 
 
 6 
 
 1807 
 
 627,936,663 
 
 .. 85 9 
 
 .. 78 
 
 .. 
 
 83 
 
 1 
 
 1808 
 
 640,204,573 
 
 .. 86 10 
 
 .. 79 
 
 2 .. 
 
 85 
 
 7 
 
 1809 
 
 650,013,362 
 
 .. 87 8 
 
 .. 106 
 
 .. 
 
 88 
 
 7 
 
 1810 
 
 661,490,238 
 
 .. 88 7 
 
 .. 112 
 
 .. 
 
 87 
 
 1 
 
 1811 
 
 669,374,786 
 
 .. 89 3 
 
 .. 108 
 
 .. 
 
 85 
 
 1 
 
 1812 
 
 684,743,399 
 
 .. 90 6 
 
 .. 128 
 
 .. 
 
 91 
 
 2 
 
 1813 
 
 716.090,573 
 
 .. 93 2 
 
 .. 120 
 
 .. 
 
 97 
 
 2 
 
 1814 
 
 799,288,486 
 
 ..100 1 
 
 .. 85 
 
 .. 
 
 98 
 
 2 
 
 1815 
 
 821,740,214 
 
 .. 101 11 
 
 .. 76 
 
 .. 
 
 97 
 
 6 
 
 Average of the 19 
 
 yrs 82 8 
 
 
 
 81 
 
 2| 
 
 1816 
 
 864,822,540 
 
 ..105 6 
 
 .. 82 
 
 .. 
 
 97 
 
 5 
 
 1817 
 
 848,282,477 
 
 ..104 2 
 
 .. 116 
 
 .. 
 
 101 
 
 2 
 
 1818 
 
 843,514,767 
 
 ..103 9 
 
 .. 98 
 
 .. 
 
 103 
 
 1 
 
 1819 
 
 844,962,321 
 
 .. 103 10 
 
 .. 78 
 
 .. 
 
 100 
 
 3 
 
 1820 
 
 843,388,804 
 
 .. 103 9 
 
 .. 76 
 
 .. 
 
 96 
 
 8 
 
 Av( 
 
 3raffeofthe245 
 
 rrs. 87 
 
 , . 
 
 , , 
 
 85 
 

 
 60 PAPER MONEY VINDICATED. 
 
 In a pamphlet, which is intended to convey 
 nothing more than a sketch of some important 
 truths, hitherto unexplained, concerning paper 
 money, I am not permitted to make those de- 
 ductions from the preceding tables, which 
 would become a treatise on political economy : 
 all that comes within my province on this occa- 
 sion is to make a few passing remarks, which 
 shall be as brief as possible. 
 
 1. From 1688 to 1765, that is, for the 
 whole of the first period in No. I, it was the 
 policy of our government to offer a bounty of 
 5s. per quarter on the export of corn. Various 
 opinions have been entertained respecting the 
 propriety of this measure. Dr. A. Smith thinks 
 it " altogether impossible that the bounty could 
 ever contribute to lower the price of grain."* 
 He supposes, on the contrary, that it " neces- 
 sarily tends to raise the money price of corn 
 somewhat higher than it otherwise would be in 
 the home market. "f The opinion of Mr. Ricardo 
 is to the same effect, but qualified by this con- 
 sideration, that as corn, to be more largely pro- 
 duced, which is the natural effect of a bounty 
 on exportation, would require the cultivation of 
 inferior lands, so the rise in price necessary 
 to repay the producer, under this forced sys- 
 tem, would still be the natural price of the 
 country ; and as this was higher than before, 
 
 * Smith's Wealth, vol. ii. p. 364. f p. 365.
 
 PAPER MONEY VINDICATED. 61 
 
 the ditFerence of cost between corn grown on 
 good and inferior soils would constitute a rise 
 in rent, " By a continued bounty, therefore, 
 on the exportation of corn, there would be 
 created a tendency to a permafient rise in the price 
 of corn, and this, as I have shewn elsewhere, 
 never fails to raise rent."* If it did not call 
 for the cultivation of inferior lands, he thinks a 
 bounty would have no effect on price at home : 
 '*A bounty on the exportation of corn tends to 
 lower its price to the foreign consumer, but it 
 has no permanent effect on its price in the 
 home market."! Its practical operation is 
 however supposed by both writers to be a rise 
 in the home price of corn, which Dr. Adam 
 Smith condemns as impolitic ; J and Mr. Ri- 
 cardo admits to be injurious to all classes, ex- 
 cept the landlord. § " Inasmuch," observes Mr. 
 M'Culloch, "as bounties force us to have re- 
 course to poor soils, and, consequently, diminish 
 the productive power of fresh capital when 
 applied to land, they contribute to raise rent, 
 and are, therefore, beneficial to the landlords : 
 to every other class of society, however, their 
 effects are diametrically opposite."^ On re- 
 ferring to the table of actual prices for these 
 
 * Ricardo on Pol.Econ. p. 368. t Ibid p. 354. 
 
 I Smith's Wealth, vol. iii. p. 452. 
 
 § Political Economy, p. 400. 
 
 IF Smith's Wealth, by Mr. M'Culloch, vol. iv. p. 336.
 
 62 PAPER MONEY VINDICATED. 
 
 seventy-three years, during which the bounty 
 on exportation was in use, we see that its effect 
 was, as might be expected, a violent derange- 
 ment of the current price of corn, causing it 
 to fluctuate in periods of ten years each from 
 51*. 2d. to 31*. 9^. per quarter; and, in single 
 years, from 69*. ^d. (in 1709 and 1710), to 
 22*. \d. (in 1743 and 1744), the highest and 
 lowest prices on record, from 1595 to 1795, 
 (with the exception of the two anomalous years, 
 1648 and 1649.) There is ample reason, there- 
 fore, to join with these high authorities in 
 condemning the system of bounties on corn, 
 although that effect did not follow which they 
 attribute to it — a general rise of price. Dr. 
 Smith endeavours to explain how this failed to 
 happen, by supposing a general scarcity of 
 silver for the time ; but he is forced to abandon 
 this theory in speaking of the period of greatest 
 decline, viz, from 1741 to 1750. If we con- 
 clude that taxation required the price which 
 on the average was obtained, and that the 
 bounty did nothing more than embarrass the 
 regular course of production which, without 
 legislative interference, would have gone on 
 smoothly ; we shall form, as it appears from 
 the fact, a more accurate judgment. 
 
 2. From 1765 (by the suspension of the 
 bounty) and from 1773, by the passing of a new 
 act, the former principle of a bounty up to 48*. 
 per quarter, was restricted to 44*. per quarter.
 
 PAPER MONEY VINDICATED. 63 
 
 at which price, in fact, exportation was prohi- 
 bited. The duty on importation was, by this 
 act, increased from \6s. per quarter, when 
 wheat was under 53*. Ad. (22d Charles II.) to 
 21*. 9d. per quarter when it was below 48*. At 
 48*. a nominal duty of 6d. was imposed. As 
 the increase of taxation was such as to de- 
 mand, at the commencement of this period, 
 the price of 44*. 4d. per quarter, the limitation 
 of the bounty to 44*. was a virtual abolition of 
 it ; and as importation was restricted under 48*., 
 prices were in reality left to range themselves, 
 for the greater part of this term, exactly as they 
 would have done had there been no parlia- 
 mentary intervention. In one respect, this 
 wrought a great improvement ; — fluctuations of 
 price were from this time comparatively trifling. 
 But when, under this system, it was rendered 
 possible for the agriculturist to demand and 
 obtain that remuneration, on the average, adding 
 taxation to natural price, which was due to him, 
 another kind of inconvenience ensued : — the 
 price of wheat, which from 1739 to 1764 had 
 been, on the average, much below the rate which 
 taxation and natural price required, rose con- 
 siderably above that level, being for the 10 years 
 ending in 1775, as high as 51*. 4d. ; whereas 
 the debt of this last year would have raised it 
 only to 44*. 4d. This advance was injurious, 
 being more than could be sustained by the cur- 
 rency ; of which we have incidental proof in the
 
 64 PAPER MONEY VINDICATED. 
 
 following remark of Dr. Adam Smith, made at 
 this period. 
 
 '* By issuing too great a quantity of paper, of 
 which the excess was continually returning in 
 order to be exchanged for gold and silver, the 
 Bank of England was, for many years together, 
 obliged to coin gold to the extent of between 
 800,000/. and 1,000,000/. a-year ; or, at an ave- 
 rage, about 850,000/. For this great coinage, 
 the Bank (in consequence of the worn and de- 
 graded state into which the gold coin had fallen 
 a few years ago) was frequently obliged to pur- 
 chase gold bullion at the high price of 4/. per oz. 
 which it soon after issued in coin at 3/. 17*. lOhd' 
 per oz., losing in this manner between 2| and 3 
 per cent, upon the coinage of so very large a 
 sum. Though the Bank, therefore, paid no 
 seignorage, though the government was properly 
 at the expense of the coinage, this liberality of 
 government did not prevent altogether the ex- 
 pense of the Bank. ' 
 
 The circumstances in which the Bank was 
 placed at this period, are precisely like those in 
 which it was placed at the close of the late 
 war, when, in consequence of the great differ- 
 ence between the taxation and natural price of 
 corn, compared with its natural price only, which 
 difference had been represented by paper money, 
 the Bank could not keep up the supply of gold, 
 in exchange for notes, equal to the demand. 
 In the former period, they bore the loss for
 
 PAPER MONEY VINDICATED. 65 
 
 some years, till the due relation of paper money 
 to gold was again adjusted : in the latter, they 
 protected themselves by a rapid diminution of 
 their notes, which consequently rose in value as 
 compared with gold. This was the remedy 
 which Mr. Ricardo * and Mr. M'Culloch f con- 
 tend the Bank ought to have had recourse to, in 
 the period referred to by Dr. Adam Smith ; and 
 it is clear that, ultimately, it was the remedy : 
 for the price of corn was reduced in the ten 
 years ending in 1785, to 47^. 8^., though the 
 debt had been increased in the mean time, 
 100,000,000/., which required the price of 54s. 
 4d. per quarter. The distress consequent on 
 this, at the close of the American war, is still 
 remembered, 
 
 3. " It deserves particular notice," says Mr. 
 M'Culloch, "that from 1771 to 1791, both in- 
 clusive, there was no rise of prices.";]; He attri- 
 butes this to the improvements which had taken 
 place in agriculture, but with more reason it 
 seems due to the guard which the Bank of Eng- 
 land was constrained to keep on its issues. In 
 spite, however, of all precautions, so necessary 
 was a rise of prices, and so great was the prac- 
 tical difference between paper money and gold 
 when the war broke out, that after very exten- 
 
 * Political Economy, p. 425. 
 t Smith's Wealth, vol. ii. p. 46. 
 t Smith's Wealth, &c. vol. iv. Notes, p. 323. 
 F
 
 66 PAPER MONEY VINDICATED. 
 
 sive and numerous failures in consequence of a 
 demand for gold from the country bankers, who 
 had supplied paper money on good security ! the 
 Bank of England was saved from experiencing 
 similar disgrace and ruin, only by the passing 
 of the Bank Restriction Act. 
 
 4. After the passing of this act, distress on the 
 part of the agriculturist was at an end. Prices 
 rose as taxation increased, pari passu, till, at the 
 end of the war, a quarter of \^eat sold for 
 double its price at the beginning. The advance 
 of actual price was in unison with the claims of 
 taxation, after the first five years ; and it kept so 
 close to them throughout the whole period of 19 
 years, that in 1815, the average of the assumed 
 price was 82^. 8^^. per quarter, while the average 
 of fltc^Mfl/ price was 81.9. 2\d. In 1820, after 24 
 years, during the latter five of which the issues 
 of paper money had been much tampered with 
 and curtailed, the difference, on the average of 
 the entire period, was only that of 87^. to 85.?. 
 per quarter. Suppose the natural price of 
 wheat to be 32.y. instead of 33.y. 6d. the assumed 
 and actual price would be identical. 
 
 If anything could banish from the minds of 
 the timid, or of those who are unpractised in the 
 details of business, all apprehension that a free 
 issue of paper money must lead to an unlimited 
 rise of prices, it would be the comparison exhi- 
 bited in these two tables, of the connection 
 of actual price with the amount of taxation. 
 Every million added to the debt had its corres-
 
 PAPER MONEY VINDICATED 67 
 
 pondent bearing on the actual price ; the ther- 
 mometer does not more strictly respond to the 
 increase of temperature, than the scale of actual 
 price does to the demands of taxation. But if 
 this is the case with respect to corn, it must be 
 equally true of all other commodities. And if 
 this be the case in the ascending series, it will 
 be no less true in the descending. Let then 
 the issue of good paper money be free ; let 
 Government circulate whatever is necessary for 
 the collection of the revenue, leaving the rest to 
 banking companies, or to such private bankers 
 as the community are willing to trust, and we 
 shall be no more troubled with prices being 
 too high or too low. As the debt diminishes, 
 prices will most certainly decline, and till then 
 they ought not to do so. It is not even the 
 interest of government that they should. As for 
 cum laws, restrictiojis on importation, and bounties 
 on exportation, the sooner they are all done 
 away with, the better; for at best they are useless. 
 
 We have now to consider how far the asser- 
 tion of the Editor of the Tivies is true : 
 
 " That the Currency Club, in fact, propose to com- 
 mit an open fraud, by means of a bank note 
 engraver, acting under cover of an Act of 
 Parliament, lohen they cannot perpetrate a di- 
 rect robbery by destroying the bond, without 
 incurring the penalties of the law." 
 f2
 
 68 PAPER MONEY VINDICATED. 
 
 That change in the currency, which reason and 
 equity call for, will enable the debtor to dis- 
 charge all money debts with a smaller amount 
 Q^'pro'perty than that which the creditor is at pre- 
 sent entitled to demand; or it will do no good: 
 because he is at present entitled to receive more 
 property than belongs to him ; in many cases, 
 twice as much as was the value of the money 
 which he lent. This error in his favour, arising 
 from an error in legislation, will be corrected, 
 and he will receive what is equitably his due. 
 
 But let it not be supposed that he is incurring 
 by this provision a loss, or that he bears a bur- 
 then which other men of property do not equally 
 sustain. He receives as much justice from the 
 state as the landowner expects to meet with, and 
 to more than that he has no claim. For wherein 
 is the condition of the landed proprietor different 
 from that of the fundholder ? During the war, 
 taxes were levied, which raised the prices of all 
 commodities, because we had then a paper cur- 
 rency which supplied the means : — 
 
 THE LANDOWNER 
 1. Received his rent in that paper currency, 
 which being the instrument by which he, 
 an unproductive consumer, was made to 
 pay the added taxes, lost so much of its 
 available power in the purchase of com- 
 modities, as his share of the increase of 
 taxation rendered necessary.
 
 PAPER MONEY VINDICATED. 69 
 
 2. When corn advanced in price proportionally 
 
 to the increase of taxation, and even be- 
 yond it in some degree, being called for 
 by a scarcity in this country, and by the 
 superior expense attending the cultivation 
 of light lands during our non-intercourse 
 w^ith other countries, farmers who were 
 possessed of good soils under old leases 
 profited greatly, being able to charge all 
 their taxation, in addition to the natural 
 price of corn thus enhanced by a more ex- 
 pensive system of production;* but the 
 Landowner suffered loss. 
 
 3. As leases expired, the Landowners came in 
 
 for a share of this advantage, by demand- 
 ing more rent, which, when it was obtain- 
 ed, left the farmer to bear the loss which 
 fell upon him when taxation again became 
 equalized, when corn was reduced in price 
 by our returning connexion with foreign 
 countries, and when, by the recklessness of 
 competition for those farms which had been 
 the source of such unlooked-for profit, he was 
 led to re-occupy them at too high a rate.l 
 
 • Not subject to the check of a free importation of corn 
 from countries where it could be grown cheaper, they had 
 no restraint placed on them except that of domestic compe- 
 tition, and it was always under comparative disadvantages to 
 the cultivator of the lighter soils : they were consequently 
 more free from the burthens of the war than all other pro- 
 ducers. 
 
 t The tables of assumed and actual price shew the opera-
 
 70 PAPER MONEY VINDICATED. 
 
 4. On the termination of the war, (not to men- 
 
 tion what has since been effected on the 
 one hand by a change of the currency, 
 which precluded the addition of taxation 
 to natural price ; and on the other hand by 
 the enactment of corn laws with the view of 
 creating a higher price, the means of sup- 
 porting which the former measure took 
 away) such a price becomes ultimately 
 fixed on corn, at an average, as leaves the 
 landlord, in his capacity of consumer, to 
 pay all the taxes which the expenses of the 
 war created, and which the producers of 
 corn and other commodities cannot afford 
 to pay for him. 
 
 5. As long as these taxes continue to be levied, 
 
 the Landowner receives in rent a sum of 
 money equal, if not superior in amount, to 
 that which his land produced before the 
 war commenced, but of less avail, since it 
 will not procure him, in exchange, an equal 
 quantity of all commodities. The differ- 
 ence, or what he loses, in quantity, is what 
 
 tion of that system which for a time benefited the agriculturist 
 so remarkably. From 1715 to 1820, there is no instance 
 of the decennary average of actual price exceeding the de- 
 mands of taxation, except that of 1775, which has been al- 
 ready noticed as having attracted the attention of our best 
 writers, till that of 1801, in which the actual average of 
 eight years exceeded the assumed price by one-seventh, or 
 14 per cent.
 
 PAPER MONEY VINDICATED. 71 
 
 he pai^s to the support of the state, tor his 
 own protection, and the preservation of 
 his property. 
 
 6. When the reduction of the debt is beginning 
 
 to take place, and especially when it be- 
 comes every year more conspicuous — in 
 the exact degree in which this proceeds, 
 the paper currency he receives for his 
 rents, will become annually more effective 
 in the purchase of all commodities. At 
 last the debt is discharged : his money, 
 though of paper, then resumes its pristine 
 vigour, and is as efficacious as gold, with 
 which it is at par in exchange. Taxation 
 having ceased, his land is now free to ren- 
 der to him all its natural proceeds for his 
 own use. 
 
 7. Had he sold his landed property at any pe- 
 
 riod of the increase or diminution of the 
 debt, the paper money he received for it 
 would have exchanged at a greater or less 
 degree of difference against gold, in pro- 
 portion as his property was at that time 
 burthened with the charge of a greater or 
 less weight of taxation. 
 
 8. If the war continued twenty years, and the 
 
 Landowner did not retrench in the quantity 
 of commodities he purchased, he would 
 probably find himself by one-third a poorer 
 man, after the debt had been paid off, than 
 he was at its commencement. This is
 
 72 PAPER MONEY VINDICATED. 
 
 tlie price he will have paid for the protec- 
 tion he has derived, as a man of property, 
 from the carrying on of that war. 
 
 THE FUNDHOLDER 
 
 1 . Received his interest in that paper currency, 
 
 which, being the instrument by which he, 
 an unproductive consumer, was made to 
 pay the added taxes, lost so much of its 
 available power in the purchase of commo- 
 dities, as his share of the increase of tax- 
 ation rendered necessary. 
 
 2. When corn advanced in price beyond the 
 
 increase called for by taxation, and other 
 commodities were also dearer, having their 
 price governed by that of corn, the money 
 of the Fundholder, like that of the Land- 
 holder before his rents were raised, did not 
 go so far in the purchase of commodities as it 
 should have done; and so he suffered loss. 
 
 3. But the Fundholder had some compensation 
 
 in being able to lend his surplus capital 
 to government, during the war, on more 
 advantageous terms than before. He often 
 lent the same paper money which he re- 
 ceived for his dividends, and which was 
 fraught with the burthen of taxation, on 
 such terms, that consols estimated at 60/. 
 did not cost him more on the average than 
 54/. ; nor can he be obliged to receive back 
 his capital, till for every 54/. he is repaid
 
 PAPER MONEY VINDICATED. 73 
 
 100/. To this we may add, that consols 
 were below par in the years 1797, 1798, 
 1799, 1801, 1803, 1804, 1805, 1812, 1813, 
 and 1815; in 1798 being as low even as 
 50.* 
 
 4. On the termination of the war, (not to men- 
 
 tion what has since been effected on behalf 
 of the Fundholder by a return to cash pay- 
 ments, which at once delivered him from 
 all the taxes added during the war, by re- 
 storing his capital to him at the value it 
 had before the war) so much will the paper 
 currency of the country in which his divi- 
 dends are paid, have lost of its available 
 power in purchasing commodities, that it 
 will leave him to pay all those taxes, as a 
 consumer, which the producers of commo- 
 dities cannot afford to pay for him. 
 
 5. As long as these taxes continue to be levied, 
 
 the Fundholder will receive for his divi- 
 dends a sum of money equal, if not supe- 
 rior in amount, to that which his capital 
 produced before the war commenced, but 
 of less avail, since it will not procure him 
 in exchange an equal quantity of all com- 
 modities. The difference, or what he will 
 have lost in quantity, is what he ought to 
 pay toward the support of the state, for his 
 
 * App. to Bank Charter Report, p, 96.
 
 74 PAPER IMONEY VINDICATED. 
 
 own protection, and the preservation of his 
 property. 
 
 6. When the reduction of the debt is beginning 
 
 to take place, and especially when it be- 
 comes every year more conspicuous — in 
 the exact degree in which its diminution 
 proceeds, the paper currency he receives 
 for his dividends will become annually 
 more eifective in the purchase of all cona- 
 modities. At last the debt is discharged : 
 his money, though of paper, then resumes 
 its pristine vigour, and is as efficacious as 
 gold, with which it is at par in exchange. 
 Taxation having now ceased, his capital 
 is free to render to him all its natural pro- 
 ceeds for his own use. 
 
 7. Had he sold his funded property at any 
 
 period of the increase or diminution of the 
 debt, the paper money he received for it 
 would have exchanged at a greater or less 
 degree of difference against gold, in pro- 
 portion as his property was at that time 
 burthened with the charge of a greater or 
 less weight of taxation. 
 
 8. If the war continued twenty years, and the 
 
 Fundholder did not retrench in the quan- 
 tity of commodities he purchased, he would 
 probably find himself by one-third a poorer 
 man, after the debt had been paid off, 
 than he was at its commencement. This
 
 PAPER MONEY VINDICATED. 75 
 
 is the price he will have paid for the pro- 
 tection he has derived, as a man of pro- 
 perty, from the carrying on of that war. 
 
 It appears to me, that in this parallel it is 
 impossible to find any difference between the 
 condition of the landed and funded proprietor. 
 Each ouglit to be taxed equally towards the 
 discharge of the obligations of the State, 
 throughout a long course of years, as each 
 would have been equally taxed, if it were the 
 practice of government to require all men to 
 contribute every year, according to their pro- 
 perty, the sums required by the State, for the 
 exigencies of the war, without incurring any 
 debt. If this had been the way in which the 
 heavy expenses of the late war had been de- 
 frayed, is there any one that would maintain 
 it to have been the bounden duty of the State, 
 to restore to the capitalist that third of his 
 original property, at the end of the war, which 
 the taxes had taken from him in the course 
 of it, while the landowner was to be left to lose 
 his third part, unless, by great personal priva- 
 tions, he could redeem it ? Yes ! The Editor of 
 the Times maintains this, and more. He says, 
 that they who will not acquit the public creditor 
 of all liability to make good the expenses of the 
 war, by paying him back, at the close of it, his 
 money in full weight and tale, so that he shall 
 enjoy it the same as if the war had never
 
 76 PAPER MONEY VINDICATED. 
 
 existed, though it was carried on for his pro- 
 tection among others, and equally for the pre- 
 servation of his property, "propose to commit an 
 open frauds under cover of an act of parliament, 
 when they cannot perpetrate a direct robbery by 
 destroying the bond, without incurring the 
 penalties of the law !" I know of no way in 
 which the capitalist would be entitled to receive 
 his money again of full weight and tale, as it 
 was forty years ago, except one, and that is 
 attended with even greater disadvantages : — 
 he might have buried in the earth, and then he 
 w^ould have had it all again ; but, in that case, 
 he would have lost his capital twice over, by 
 losing the interest which he has been receiving 
 in the interim. 
 
 The answer which the case of the public 
 creditor has received, is equally an answer to 
 that of the private creditor. It is immaterial at 
 what time he lent his money, or at what time it 
 is returned : if we have a free paper currency, 
 it will, whenever restored to him, carry with it 
 that precise value which the obligations of all 
 property to redeem the debts of the State, justly 
 entitle it to possess at that particular junctifre. 
 
 Having mentioned what kind of paper money 
 is not capable of being depreciated, I will name 
 two sorts which may become liable to that 
 charge. The first is, the notes of a private 
 banker, when from a misplaced confidence, the
 
 PAPEH MONEY VINDICATED. 77 
 
 public have entrusted him with property in 
 return for his notes, which property he has 
 spent, or speculated away, so that there are not 
 funds left to take up the notes, M^hen they are 
 returned for payment by those who hold them. 
 A mere suspicion of the solvency of such a man 
 will throw discredit on his notes, and would con- 
 stitute them a depreciated currency, if they were 
 allowed to pass for whatever the public chose 
 to give for them, as is the case in America ; 
 but with us, if they are not of their full value 
 they are considered worth nothing, till the 
 dividend is declared. The second kind of de- 
 preciated currency is the notes of a government, 
 when they are issued to a greater amount than is 
 withdrawn from circulation by the demands of 
 taxation ; as was the case with the French 
 assignats. A perfectly inidtpreciahle paper 
 currency, as I have said before, is that of a 
 bona-Jide banking company, with a large sur- 
 plus capital, whose affairs are periodically laid 
 open to all who take an interest in them, and 
 the paper money of a government issued annually 
 to an amount not greater than that of the 
 annual taxation, and withdrawn in the space of 
 a year from the time of each issue by the col- 
 lection of the taxes. Y ox public use we require 
 the latter, for private accommodation the for- 
 mer ; but whether we have both or either, such 
 paper money can never become a deteriorated 
 currency, at whatever rate our national taxation
 
 78 PAPER MONEY VINDICATED. 
 
 may cause it to exchange against gold and sil- 
 ver. Whether our own population, or that of 
 the civilised world, double or treble itself, while 
 gold and silver do not increase ; or whether 
 these increase tenfold, or decline so as to fur- 
 nish only a tenth of what is at present obtained 
 from the mines, — we have only to adjust the 
 quantity of gold and silver in our pound to the 
 standard of four bushels of wheat, as it is found 
 to exist abroad, on the average of seven or ten 
 years, and with the use of paper money, all the 
 vicissitudes of fortune, and changes of condition, 
 to which mankind would otherwise be subject, 
 will be avoided. A perfect equality of price in 
 gold or silver may be sustained for ever. To 
 whatever extent the claims of trade may in- 
 crease or diminish ; whether the demands of 
 the State call for the addition of eight hundred 
 millions to the debt, or permit its reduction 
 from that amount to nothing, — paper money will 
 adapt itself to every emergency with the nicest 
 accuracy, giving to all their due ; awarding to 
 every one, at all times, his peculiar share of the 
 public burdens, according to his ability, whether 
 it be great or small ; and securing to the pro- 
 ductive classes, under every possible contin- 
 gency, and for ever, a sufficiency of the substan- 
 tial comforts of life. 
 
 With money of gold and silver, how different is 
 the effect ! Its lowest price is the average quan- 
 tity of corn necessary to support those who pro-
 
 PAPER MOXEV VINDICATKD. 79 
 
 duce it and bring it to market. Say that this 
 is as his^h as a bushel of wheat for an ounce of 
 silver, or four bushels for a sovereign, it is evi- 
 dent that if all the civilised world use these 
 metals for money, a greater value will at times 
 attend them ; and an increasing necessity for 
 more money, as the transactions of business 
 become more numerous, will gradually enhance 
 their value. Superadd taxation to this, and 
 you alter instantly the relation they bear to all 
 commodities. On a large scale we may see 
 how it affects prices, by observing what has been 
 done recently through the intervention of paper 
 money, which, first representing taxation, and 
 then being withdrawn, left the baneful qualities of 
 a metallic currency in its more frightful aspect, 
 to the full gaze of the public. From some tables 
 drawn up by Thomas Attwood, Esq. M.P., 
 inserted in Mr. Cayley's Commercial Economy, 
 it appears that " a public creditor lending the 
 value of 80 bushels of wheat to government, 
 in 1813, (when wheat was 14^. 4d. per bushel, 
 on the average of five years ending then, and 
 consols were at 57f , the average of that year) 
 receives back in 1821, the value of 224 bushels 
 of wheat, (corn being 6s. 6d. per bushel, and 
 consols, 72|, April the 5th, that year) or near 
 tkj^ee times the amount which he lent, besides 
 Xh^ full interest in the meanwhile calculated after 
 the same proportion." * The public creditor 
 
 * Commercial Economy. By E. S. Cayley, Esq., M. P. 
 pa^e 16.
 
 80 PAPER MONEY VINDICATED. 
 
 who receives this, is, of course, the speculator, 
 who watches every turn of the market to make a 
 gain of it, and not the permanent fundholder, 
 who is often blamed for transactions in which 
 he has been an innocent party, and who is in 
 danger of sufFeringthe loss of his property on ac- 
 count of the misdeeds of those who have con- 
 verted their stock in good time, on the most ad- 
 vantageous terms, into landed property. These 
 are the legitimate fruits of a currency of gold 
 and silver, to which taxation has given so great 
 a power ; but in the case before us, those ope- 
 rations are crowded into a few years which in 
 general occupy many. Perhaps it is fortunate 
 that we have the lesson read to us for our 
 edification in language so startling, since its 
 proper influence should be to warn us against 
 the recurrence of circumstances so repug- 
 nant to reason, and detrimental to the public 
 interest. 
 
 Had the same class, who bargained with 
 the public creditor that he should have 100/. 
 returned for every 54/. advanced, and after- 
 ward, by an alteration of the currency, threw 
 into his hands 50/. more, paid the money out 
 of their own pockets, there would have been 
 the less to regret, since they deserved some 
 punishment for their improvidence ; but when 
 the task of completing the obligation is imposed 
 on others who were no parties to the transac- 
 tion, its effects are greatly to be lamented.
 
 PAPER MONEY VINDICATED. 81 
 
 Even when the process is more gradual, it is 
 no less destructive, in the end, of the happiness 
 and prosperity of the industrious classes. Allow 
 no means of extension to the currency by the 
 aid of paper money, lay taxes as formerly, which 
 shall be paid by the producer out of his profits, 
 and as his price cannot be raised for want of a 
 currency capable of extension, he must lose the 
 amount of those taxes by a diminution of his 
 profits. This may be a comfortable doctrine for 
 the rich consumer to advocate ; but I am fully 
 persuaded, that had the taxes, which have been 
 imposed during the late war, been attempted 
 thus to be wrung out of the hard earnings of 
 those who work for their living, we should have 
 had those hands raised against us, which were 
 then lifted up in our defence. 
 
 But "the sum required by the tax (says Mr. 
 Ricardo) must be raised, and the question simply 
 is, whether the same amount shall be taken 
 from individuals, by diminishing their profits ^ 
 or by r^aising the prices of the commodities 
 on which their profits will be expended. Tax- 
 ation under every form, presents but a choice of 
 evils ; if it do not act on profit, or other sources 
 of income, it must act on expenditure ; and pro- 
 vided the burthen be equally borne, and do not 
 depress reproduction, it is indifferent on which 
 it is laid."* 
 
 * Pol. Econ. p. 184. 
 G
 
 82 PAPER MONEY VINDICATED. 
 
 But with this concession, he remarks properly 
 enough, that "corn and all home commodities 
 would not be materially raised in price, without 
 an influx of the precious metals ; for the same 
 quantity of money could not circulate the same 
 quantity of commodities at high, as at low prices ; 
 and the precious metals never could be pur- 
 chased with dear commodities. When more 
 gold is required, it must be obtained by giving 
 more, and not fewer commodities in exchange 
 for it. Neither could the amount of money be 
 supplied by paper, for it is not paper that regu- 
 lates the value of gold as a commodity, but gold 
 that regulates the value of paper. Unless, then, 
 the value of gold, could be lowered, no paper 
 could be added to the circulation without being 
 depreciated. And that the value of gold could 
 not be lowered, appears clear, when we consider 
 that the value of gold, as a commodity, must be 
 regulated by the quantity of goods which must 
 be given to foreigners in exchange for it. When 
 gold is cheap, commodities are dear; and when 
 gold is dear, commodities are cheap, and fall in 
 price. Now, as no cause is shewn why foreigners 
 should sell their gold cheaper than usual, it does 
 not appear probable that there would be any in- 
 flux of gold. Without such an influx, there 
 could be no increase of quantity, no fall in its 
 value, no rise in the general price of goods." * 
 
 * Pol. Econ. p. 186.
 
 PAPER MONEY VINTDICATED. 83 
 
 According to this doctrine, we are bound up 
 in a golden chain, from which there is no pos- 
 sibility of escape ; and though the choice of pay- 
 ing the taxes by a diminution of profits, or a rise 
 of prices, is offered us, the truth comes out that 
 we have " Hobson's choice," the first or none. * 
 The principle is undoubtedly correct, that 
 without an injiu.v of gold, " there could be iio 
 increase of quantity, no fall in its value, no i^ise 
 in the general price of goods." But what shall 
 we say to the fact, that ever since the year 
 1797, there has been a rise in the general price 
 of goods ? Is it not a proof that there must 
 have beeji an ittfliLv of gold? — since, otherwise, 
 there would have been no increase of quantity, 
 no fall in its value. How, then, is that influx 
 
 * Mr. Ricardo did not perceive that paper money, if it added 
 to prices only so much beyond gold as the taxes called for, 
 would not disturb in any degree the natural price of commodi- 
 ties ; that it would leave us at liberty to sell them abroad, or 
 to bring the productions of foreigners for sale here, with the 
 same advantage as before. He did not see, that with this 
 addition to natural price, the taxes would be charged to the 
 consumer without the necessity of an influx of gold to sup- 
 port them — which, as he correctly reasons, could not be 
 had. He speaks, indeed, of the depreciation of paper in 
 comparison with gold, as if he conceived the way in which 
 the taxes might be added ; but he did not suffer his mind to 
 dwell long enough on the idea to discover that, if the depre- 
 ciation was nothing more than the difference between natural 
 price on the one hand, and taxation, added to natural price, 
 on the other, it was not a depreciation to be condemned, but 
 " a consummation most devoutly to be wished." 
 
 G 2
 
 84 PAPER MONEY VINDICATED. 
 
 to be accounted for ? Mr. Ricardo thinks that 
 it could ojily have been obtained in consequence 
 of foreigners selling their gold cheaper than 
 usual ; and, as no cause is shewn why this 
 should be the case, he disbelieves the evidence 
 of his eyes and ears, and concludes it not pro- 
 bable that there could be any influx. He wholly 
 forgets that he had just before stated another 
 condition on w^hich gold could be obtained from 
 foreigners : — *' When more gold is required, it 
 must be obtained by giving more, and not fewer, 
 commodities in exchange for it." If, then, fo- 
 reigners would not sell their gold cheap, that is, 
 for fewer commodities, and certainly there is no 
 cause shewn why they should, they might sell 
 it dear, or for more commodities ; and why they 
 should do that, the dearness itself, that is, the 
 quantity of commodities given in exchange for it, 
 shews cause enough. 
 
 That we had higher prices during the war is 
 indisputable, though Mr. Ricardo's theory could 
 not admit it to be possible ; and that gold was 
 obtained from foreigners by buying it dear, in 
 order to sustain those high prices, is no less 
 certain, though the whole science of political 
 economy should totter to its fall at the disco- 
 very. The following table exhibits melancholy 
 proof of the fact : —
 
 PAPER MONEY VINDICATED. 85 
 
 THE REAL VALUE OF ALL IMPORTS AND EXPORTS, 
 
 (Including Colonial Produce) for periods 
 from 1788 to 1829. 
 
 of five years, 
 
 5 Years 
 ending 
 5th Jan. 
 
 1792 
 
 Official Value 
 
 of all Imports 
 
 for 5 years. 
 
 £88,583,760 
 
 Official Value 
 
 of all Exports 
 
 for 5 years. 
 
 £93,109,710 
 
 Excess of all 
 Exports over 
 all Imports. 
 
 £4,525,950 
 
 1803 
 
 136,190,325 
 
 163,966,239 
 
 27,775,914 
 
 1808 
 
 129,774,165 
 
 153,269,023 
 
 23,494,858 
 
 1813 
 
 143,609,365 
 
 184,102,917 
 
 40,493,552 
 
 1819 
 
 156,573,587 
 
 259,292,114 
 
 102,718,527 
 
 1824 
 
 154,989,624 
 
 246,530,466 
 
 91,540,842 
 
 1829 
 
 201,917,388 
 
 287,295,060 
 
 85,377,672 
 
 ** It is a general law of prosperous com- 
 merce," says President Quincy Adams, " that 
 the real value of exports should by a small, and 
 onli/ a small, balance exceed that of imports — 
 that balance being a permanent addition to the 
 wealth of the nation."* This maxim is the 
 dictate of experience, as well as the conclusion 
 to which common sense would naturally lead an 
 enquiring and impartial mind. But to hear 
 many of our English politicians talk, you would 
 suppose that they really believe, since they 
 strenuously maintain, a doctrine directly the 
 reverse. They look at the difference between 
 our exports and imports not only without alarm, 
 but with complacency, and even pride, and con- 
 gratulate themselves and the nation, that we are 
 so wondrously fortunate as to have increased 
 our wealth by 90 millions during the war, and 
 
 * Message to Congress, 2nd December, 1828.
 
 86 PAPER MOXEY VINDICATED. 
 
 by 280 millions during these " piping times of 
 peace," all in the precious metals ! They 
 
 " At one slight bound high overleap all bound," 
 
 and light on conclusions widely different from 
 those of the cool and considerate American. 
 
 But a little reflection must convince every 
 one of the impossibility of permanently retaining 
 a large annual influx of the precious metals in 
 any country. Take the increase at only a mil- 
 lion per annum : in 100 years, we should have 
 drawn 100 millions from the rest of the world, 
 which, while it added to prices here, would 
 decrease prices every where else, and so would 
 offer, every successive year, a stronger induce- 
 ment to people to go abroad, and carry either 
 their income or their principal with them. 
 
 Secondly, — From this annually increasing 
 quantity' of the precious metals here, prices 
 would generally advance, the consequence of 
 which would be an increasing loss on the sale 
 of all exported goods in the common market of 
 Europe, or a total cessation of trade. This in- 
 creasing loss would diminish the ability of the 
 producer to pay such high prices, and thus tend 
 indirectly to bring ours down to those of the 
 Continent. 
 
 Thirdly. — Those who sold goods to England 
 would receive high prices in the precious me- 
 tals, which they would not use to buy our high-
 
 PAPER MONEY VINDICATED. S7 
 
 priced commodities with, but would take to the 
 Continent, where they could employ it to greater 
 advantage, and this would directly tend to bring 
 down our prices to the continental level. 
 
 Thus, by our own people carrying goods 
 abroad, which have cost the producers a larger 
 sum here in gold or silver than they can ex- 
 change them for, and by foreigners taking our 
 precious metals out of the country when prices 
 with us are higher than on the continent, that 
 superfluity of gold and silver, which appears to 
 constitute a permanent addition to the wealth of 
 the nation, will be found to be a fleeting trea- 
 sure, as impossible to be kept here as it would 
 be to hedge in the cuckoo. If we will have it, 
 so as to sustain much higher prices than other 
 nations, we must get it every year by giving real 
 value for it, and lose it again as often, that we 
 may have the opportunity, so long as prices are 
 kept up, of ?'e-acquiring it : still 
 
 " dropping buckets into empty wells, 
 
 And growing old in drawing nothing up." 
 
 The following table shews, 1. the price to 
 which gold would have risen, had we authorised 
 its exchange against paper at the market price ; 
 
 2. the actual price to which it rose during the 
 war, as far as the latter can be ascertained ; and 
 
 3. the average price of the best wheat; for 
 periods of 5 years each.
 
 88 PAPER MONEY VINDICATED. 
 
 ASSUMED AND ACTUAL PRICE OF GOLD. 
 
 5 Years 
 ending 
 1793. 
 
 1792 
 
 Proportional 
 Excess of 
 Exports. 
 
 •9514, or 5 p. 
 
 £. 
 ct. 4 
 
 Assumed 
 Price of 
 
 Gold. 
 
 s. d. 
 
 1 9. 
 
 £. 
 .3 
 
 Actual 
 
 Price of 
 
 Gold. 
 
 s. d. 
 
 17 lOA . 
 
 Average 
 
 of best 
 
 Wheat. 
 
 £. s. d. 
 
 . 2 12 9 
 
 1803 
 
 •8305,-17 
 
 .. 4 
 
 11 
 
 3. 
 
 .4 
 
 11 . 
 
 . 4 11 8 
 
 1808 
 
 •8467,-16 
 
 .. 4 
 
 10 
 
 4. 
 
 .4 
 
 0., 
 
 . 3 19 6 
 
 1813 
 
 •7800,-22 
 
 .. 4 
 
 15 
 
 0. 
 
 .4 
 
 12 2 ., 
 
 . 5 14 10 
 
 1819 
 
 •6039,-40 
 
 .. 5 
 
 9 
 
 0. 
 
 .4 
 
 5 8.. 
 
 . 4 10 
 
 1824 
 
 •6388,-37 
 
 .. 5 
 
 6 
 
 8. 
 
 .3 
 
 17 lOi . 
 
 . 3 5 10 
 
 1829 
 
 •7027,-30 
 
 .. 5 
 
 1 
 
 2. 
 
 .3 
 
 17 lOi . 
 
 .380 
 
 It appears from this table, that before the 
 war, our prices a little exceeded those of other 
 countries, causing us a loss of about 5 per cent, 
 in our exports, or Al millions in 5 years. 
 
 During the war, from 1799 to 1813, our 
 prices so far exceeded those of other countries 
 as to cause us a loss of from 16 to 22 per cent., 
 amounting, in the course of the 15 years, to 91 
 millions, or 6 millions per annum. 
 
 In the 5 years ending 1819, we lost 40 per 
 cent, by all our exports, making a sum of J 02 
 millions, or more than 20 millions annually : 
 one-eighth more than all the loss of the\5 years 
 of war. 
 
 For the next five years, the loss was 37 per 
 cent., amounting to 91 millions, or 18 millions 
 per annum. 
 
 For the five years ending 1829, it was 30 per 
 cent., being 85 millions, or 17 millions per 
 annum. 
 
 The whole amount from 1799 to 1829, a
 
 PAPER MONEY VINDICATED. 89 
 
 period of thirty years, is 37 1 millions, which, 
 allowing for sums drawn from this country by 
 absentees since the war, or as subsidies to 
 foreign states during the war, leaves a loss of 
 more than 300 millions. 
 
 How many more millions we are to lose, before 
 our exports come down to the ** law of pros- 
 perous commerce^" in relation to our imports, is 
 a question worth considering by all classes of 
 the community : by the productive, who have 
 hitherto sustained the whole weight of this use- 
 less expenditure of their strength, their time, 
 and their talent ; as well as by those who will 
 henceforth share it with them. Sir Matthew 
 Decker, who wrote on Foreign Trade near 100 
 years ago, well observes, that " The merchant, 
 the manufacturer, and the sailor, who at first 
 view appear to have the greatest interest in 
 trade, will, on examination, be found not to be 
 so deeply concerned in its well or ill being as 
 the landholder, whose interest seems more re- 
 mote, and who (with sorrow it must be said) 
 too often, by his indifference, gives occasion to 
 suspect, that he thinks he hath no concern 
 in it at all. 
 
 ** The former are not fixed to a country ; 
 their effects are all moveables, vendible in many 
 parts of the world ; if they are oppressed in 
 one place, they can soon pack up and fly to 
 another, where greater freedoms invite them ; 
 they may indeed be bound by leases of lands
 
 90 PAPER MONEY VINDICATED. 
 
 or houses, but parchment chains seldom prevent 
 despairing fugitives : therefore, the number of 
 people in any country, as well as their well 
 being, depends entirely on trade. 
 
 " The landholder hath an immoveable pro- 
 perty, valuable only to some few of his neigh- 
 bours or countrymen ; the produce of which, if 
 trade carries not off, nor brings in people to con- 
 sume, but on the contrary, by its decay drives 
 his consumers away ; his tenants must decay, 
 break, fly ; his lands be untenanted : he may 
 indeed sell at one price or another ; but when 
 the bulk of his neighbours are in as bad a situa- 
 tion as himself, and all rents declining, the 
 value of untenanted farms and empty houses 
 must be very low, 
 
 ** The traders are, indeed, the first pinched ; 
 but then they have the first warning to avoid 
 the calamity, which, coming but by degrees to 
 the ultimate, the landholders, they are the 
 longer lulled in a deceitful security. 
 
 *' Who, then, is most concerned in point of 
 interest with regard to trade ; he whose pro- 
 perty is in moveables, who hath the first warn- 
 ing, and the greatest choice of purchasers ? or 
 he, whose property is immoveable, who feels 
 not the danger until it is far advanced, hath the 
 least choice of purchasers, and those declining- 
 ones, too, like himself? 
 
 " As men rationally pursue their own inter- 
 est, this indifference in our landholders is mon-
 
 PAPER MONEY VINDICATED. 91 
 
 strous. Is it pride which makes them think the 
 subject beneath them ? All foreign courts are 
 now studying it attentively. Is it the fear that the 
 subject is too intricate ? A little attention will 
 make it as easy to them as to foreigners. Is it 
 their places that engross all their time ? What 
 they think they get by these, they may doubly 
 lose in their lands. Is it their pleasures they 
 now make their chief business ? Alas ! they 
 are paying very dear for them, and deservedly 
 too, if that is the case. — These causes may 
 affect some few ; but the general one I take to 
 be the craft, covetousness, or false notions of 
 interest in our ancestors, who thought to lay 
 the burden of taxes as remote as possible from 
 their lands, by laying them on trade, and to 
 buttress that up by prohibitions ; both which 
 have had quite contrary effects, and their chil- 
 dren's feet are catched in the traps their fore- 
 fathers laid for others.'' * 
 
 A difference of exchange between gold and 
 paper, of from 16 to 22 per cent, during the 
 war, and from 30 to 40 since, would have saved 
 us the greater part, if not the whole, of these 
 immense losses, — would have prevented our 
 goods from becoming a drug in every part of 
 the world, — would have spared the lives of 
 millions who have prematurely found a grave 
 
 * Sir Matthew Decker's Essay on the Causes of the De- 
 cline of Foreign Trade. Preface. Edinb. 1756.
 
 92 PAPER MONEY VINDICATED. 
 
 in over-exertion, to keep their families above 
 want, • — would have enabled us to retain at 
 home the intelligent and industrious part of our 
 population, whom we are shipping off every 
 month, by thousands, to countries more favor- 
 able to honest labour, and humble virtue, — and 
 last, but not least, would have deprived the 
 opponents of the Factory Bill of their main 
 argument — the impossibility of obtaining a sale 
 for their goods in the foreign market, unless 
 they are manufactured by children, whose low 
 wages in this country are equal to those of men 
 abroad. 
 
 No credit is due to the sagacity of any one 
 for the employment of ipa-per as an instrument 
 of taxation ; for we resisted its use as long as we 
 could — we tried to do without it sooner than 
 we were able ; and should we, at last, acquiesce 
 in its adoption, it is because we have no other 
 refuge from national bankruptcy and a revo- 
 lution. The struggle to return to the old sys- 
 tem has been fatal to the fortunes, health, and 
 lives of millions of our countrymen, but we re- 
 main unconvinced of our error ; yet the delay 
 has had some good effects : and if, in the end, 
 we are forced to take that only course which 
 Providence has opened out for us, we shall be 
 recompensed. A scene of peace, order, and 
 plenty, will succeed to the terrible distrac- 
 tions of the late, and the frightful forebodings of 
 the present period. Other countries, following
 
 PAPER MONEY VINDICATED. 93 
 
 our example, will attain a greater degree of free- 
 dom and ease than the world has witnessed under 
 any form of government for near 3000 years. The 
 slavery of the soul — that worst of slavery, will 
 cease ! Every man will sit under his own vine and 
 fig-tree, none making him afraid. Mammon's 
 empire will be destroyed ; for no one will care 
 for riches, where all may easily have enough. 
 Art, science, and literature, will present their 
 reasures freely to all people ; and those who 
 have a taste for their enjoyment, will not want 
 means or leisure to indulge it. Above all, charity 
 and true piety, having then ample scope and 
 opportunity for action, will be found, we may 
 hope, in every breast, since all must be 
 sensible what great mercies they have had 
 bestowed upon them by Divine Providence, 
 and how necessary it is that they should shew 
 their gratitude to the Giver of all good, by en- 
 deavouring to extend the benefits and blessings 
 which they themselves enjoy, to others in 
 distant regions, who are less fortunately cir- 
 cumstanced in regard to civilisation, religion, 
 and liberty.
 
 APPENDIX. 
 
 No. I. 
 
 Leading Article, extracted from " The Times," 
 Thursday, March 7, 1833. 
 
 We have seldom been more struck with any display of hu- 
 man folly or arrogance than with the contemplated project 
 of a Currency Club, mentioned by our city correspondent. 
 Hitherto we have had, indeed, a great assortment of such as- 
 sociations, composed of different kinds of people, acting under 
 different laws, and directed to the accomplishment of different 
 objects. We have had clubs of epicures, of gamblers, of con- 
 spirators, and of conservatives, — of country gentlemen and 
 merchants, — of beef-steak eaters, of artists, and players, — of 
 literary characters, — of " eccentrics,'' — of " odd fellows," 
 and formerly even of " fat" or " lean men," — clubs directed 
 to the promotion of good fellowship, — to the encouragement 
 of art and science, — to the support of charity, — to the ce- 
 lebration of the memory of distinguished statesmen or the ad- 
 vancement of political doctrines ; but it was reserved for the 
 present time, so fertile in novelties, to organize a club of ban- 
 kers and speculators, who boldly announce their hostility to 
 the sovereign, (we mean not, however, to accuse them of high 
 treason), — who declare malice prepense against His Majesty's 
 mint, — who avow their intention of insinuating their fingers 
 into our pockets or coffers to clip our coin or to exchange it 
 for rags, — who profess a kind of jugglery calculated, in si- 
 lence and secrecy, to defraud creditors and to alter contracts, 
 — and who, not content with the appalling fluctuations of na- 
 tional and private fortune, already occasioned by tampering 
 with our monetary system (from which we have just escaped) 
 would plunge us anew into all the agonies and dangers of 
 panics, bankruptcies, and bank restrictions.
 
 96 APPENDIX. 
 
 Some of the persons whose names are mentioned in con- 
 nexion with this scheme we readily admit to be honourable 
 men, who are afflicted with a kind of monomania on the subject 
 of currency, and who resemble their associated speculators in 
 nothing else than in that distemper ; but we must warn them 
 all equally of the danger and dishonesty of their undertaking. 
 With the exception oj" 11. notes, we have at present as much 
 paper ajloat as the wants of the country require,* or the credit 
 of indivdiuals can command. ^ The smaller paper has been 
 ■wisely withdrawn from circulation, because it was found 
 that pieces of gold and pieces of bank credit of the same deno- 
 mination could not circulate together, — that the paper, " hav- 
 ing wings to fly," always left the metal behind in the coffers or 
 cellars of the banker, and that the facility of coining this spe- 
 cies of paper money in any abundance had a tendency to de- 
 preciate the whole of the circulating medium, after having se- 
 parated itself from the gold, which was to be the only mea- 
 sure of its value. In demanding then, for the country banks, 
 and for the Bank of England, the unlimited renewed power of 
 issuing \l. notes, the currency-club gentry mean to banish 
 sovereigns from circulation, and to abolish the present metallic 
 standard. If they do not mean this, they mean absolutely 
 nothing, because there is no legal restriction to the issue of 
 bank-notes at 51., or at any sum above that amount, on which 
 they can hang any complaint. We are thus always insured of 
 a circulation of gold for smaller amounts, because it does not 
 come into competition with notes, and we thus always retain 
 in our hands the means of testing the value of that paper by 
 the general standard of the rest of the world, and not by the 
 fancy of the parties who modestly propose to usurp the King's 
 prerogative of the coinage. 
 
 Let us take the whole amount of gold thus retained in cir- 
 culation, — let us mark it at any sum which the cheap currency 
 speculators may suggest, — let us call it 15,000,000Z. or 
 20,000,000/., as they choose, — and let us then calculate the 
 
 * Fallacy I, p. 3. f Fallacy 2, p. 5.
 
 APPENDIX. 97 
 
 interest on this mass of unproductive capital, for which a paper 
 credit (on an unerring system, never yet invented) might be 
 safely substituted, and the loss of that interest will be found 
 to be the only loss which we sustain, even on their own prin- 
 ciples, by adhering to our present system.* Is this too much 
 to pay for a secure standard ? Will a million a-year be grudged 
 as a guarantee against monetary fluctuation and commercial 
 convulsion by the richest and the greatest nation in the world ? 
 
 But, say the speculators of the proposed currency club, if 
 we were allowed to issue one pound notes, we could afford 
 them in greater abundance than we can afford sovereigns, 
 as we should have to stimulate the activity of our note engra- 
 ver, and money would thus become more plentiful all over the 
 land. To be sure it would, — and what would be the conse- 
 quence? Why, it must become depreciated in the exact pro- 
 portion of its increased abundance.^ A certain amount of the 
 property of a country represented either by the precious metals 
 or by their substitutes is necessary to perform all its current 
 exchanges, or to be the medium of all its pecuniary transac- 
 tions. By increasing that quantity, whether of metals or 
 paper, we do not increase the number of transactions, we do 
 not even increase the relative proportion of real circulating 
 capital. By raising its quantity we depreciate its value to the 
 same extent, and its power of supporting industry remains the 
 same. 
 
 But this depreciation, arising from an increased quantity, 
 though it could not stimulate industry, or increase the real 
 wages of labour, would exercise a formidable influence on all 
 the fixed contracts, money capital, and pecuniary obhgations 
 of the nation. It would entirely alter the relation of debtor 
 and creditor, — it would enable Government to pay the fund- 
 holder with a smaller portion of the national income ,X and if 
 effected with this view, it would be equivalent to a system of 
 wholesale plunder and robbery. 
 
 If the proposed Currency Club, then, really understand the 
 
 * Fallacy 4, p. 12. f Fallacy 6, p. 17. \ Fallacy 7, p. 25. 
 
 H
 
 98 APPENDIX. 
 
 effect of their own principles, and can see that the necessary 
 consequence of their increased paper issues would be a general 
 spoliation of allmortgagees , creditors, andfundholders* they 
 would be fit companions for the author of the Mississippi 
 scheme, and might even appropriately hold their sittings with 
 a certain subterranean club described by Gil Bias. If, on the 
 other hand, they intend no depreciation of our currency, and 
 mean that it should be continued at its metallic standard, there 
 never was a time in which they could with less justice complain 
 of its scarcity. Let them go to the Bank of England and they 
 will find that its accumulating deposits show an almost 
 alarming abundance of unemployed money : let them inquire 
 in the city for a loan, and if their credit is good, they may find 
 it, as we have been lately told, at 2 per cent.f 
 
 Does this state of things indicate any necessity for tamper- 
 ing with our currency from its insufficiency to answer the wants 
 of industry, or the demands of trade ? If people of enterprise 
 have credit, they may obtain plenty of accommodation, and 
 surely that would be a calamitous condition of things where 
 a facility of creating unreal weath would excite a fever of 
 speculation, to be followed, as in 1825, by convulsion and 
 ruin.X 
 
 Money Market and City Intelligence, March 6th. 
 
 One of the topics of discussion to-day in the city has been 
 the formation of a club, which is understood to be projected by 
 some men of great property, and some influence in Parliament, 
 for the purpose of forcing on the Ministry measures for increas- 
 ing the currency, which they consider to be the only cure for 
 all the evils with which the country is afflicted. A preliminary 
 meeting is said to have been held yesterday, at the house of 
 Lord Western, for this purpose, at which nearly a hundred 
 gentlemen attended, and that meeting was adjourned to this 
 day, at the house of another member of Parliament, because 
 
 * See p. 25. f Fallacy 3, p. 7. J Fallacy 5, p. 14.
 
 APPENDIX. 99 
 
 the place in which they met was not sufficiently spacious for 
 deliberation. We have not been able to collect many of the 
 names of the individuals engaged in this project, but it is 
 stated that among those who have more conspicuously taken 
 the lead in it are Sir Charles Burrell, with Mr. Mathias and 
 Mr. Thomas Attwood. If the numbers and rank of the parties 
 had not been represented here in so formidable a light as they 
 have been, no attention would certainly have been paid in the 
 city to the statement, for our best practical men would treat 
 with utter ridicule the notion of a new issue of paper at a time 
 when all are complaining that the rate of interest is depressed 
 far lower than it ought to be, and /ear that the redundance of 
 capital will drive us once more into all the mad schemes and 
 speculations q/ 1824 and 1825, with a repetition of all the 
 fatal consequences to which they then led. As it is, they wait 
 with some curiosity, and no small degree of anxiety, to ascer- 
 tain in what way the project will further develop itself. We have 
 heard it even said, — but this part of the project shocks all be- 
 lief, — that it is proposed to have the further issues of paper 
 (called for, according to the notions of the projectors, by the 
 state of the country) inconvertible either into gold or silver ; 
 in other words, that we are to adopt exclusively a paper cir- 
 culation. 
 
 * See p. 16. 
 
 H 2
 
 JOO APPENDIX. 
 
 No. II. 
 ILLUSTRATIONS 
 
 OF PRINCIPLES LAID DOWN IN THE COURSE OF THIS 
 WORK ; FROM THE REPORT OF THE BANK CHARTER 
 COMMITTEE. 
 
 The following Tables show, in some degree, the loss 
 which the productive classes sustain, hy not being able 
 to charge taxation in addition to natural price. 
 
 1. 
 
 Contract Prices of Provisions supplied to the Royal 
 Hospital Chelsea, from 1818 to 1832. 
 
 The whole ration contracted for at per head, per diem, consist- 
 ing oi bread, cheese^ butter, beef and mutton, salt and oatmeal, 
 was, in 1819, Is. 0|d.: in 1832 8id. 
 
 Potatoes, in 1826, 6s, 5rf. per cwt. of 1201bs.: in 1832,3s. lOd. 
 Beer, in 1818, 10s. Qd. per barrel : in 1829, 7s. 
 
 Candles, in 1820, 7s. \\d. per dozen : in 1832,5s. 3c?. 
 
 Coals, in 1818, 44s. 2d. per chaldron : in 1831, 33s. 4c?. 
 
 Contract Prices of Provisions supplied to the Royal 
 Hospital Greenwich, from 1818 to 1831. 
 
 Flour, in 1818, 3/. 6s. 9|rf.per sack, in 1830, 21. 14s. llrf. 
 
 Meat, 2^. 17s. Id. per cwt 2l.2s.6d. 
 
 Butter, .... 1 1<?. per lb. .... Q\d. 
 
 Cheese, .... 6c?. . . . . 4cf. 
 
 Malt, .... 4/. Is. 8|c?. per quarter, .... 2/. 16s. l^rf.
 
 APPENDIX. 101 
 
 3. 
 Prices of the following Articles at Smithfield Market. 
 
 July. July- 
 
 819 Wheat, 58s. to 80s. per quarter. 1832 48s. to 74s. 
 
 ... Beef, 4s. 6d!. to 5s. 4rf. per 8 lb. St 3s.2c?.to4s.2cf. 
 
 . . . Mutton, 4s. 6d. to 5s. 2d. 3s. to 4s. 4d. 
 
 ... Coals, 32s.6(£.to39s.3d.perchal. 1831 24s. 6d. to 29s. 
 
 . . . Iron bars, 13/. to 14/. per ton. 1832 61. 5s. 
 
 ... Ditto pig, 8/. to 9/. 10s. 4/.10s.to4Z.15s 
 
 ... Cheese, Ches., 78s. to 84s, percwt 40s. to 70s. 
 
 ... Glou., 74s. to 86s. .... 38s. to 66s. 
 
 . . . Butter, Cork, 100s. to 104s. 1831 80s. 
 
 821 Yorksh. 52s. per firkin .... 40s. to 42s. 
 
 For Prices at Greenwich Hospital, in 1813, see p. 45 of 
 this Pamphlet, compared with which, 
 
 Flour has fallen from 93s. to 54s. lid. per sack. 
 
 Meat 75s. Icf. to 43s. 6ci. per cwt. 
 
 Butter Is. 2c?. to 6 |c?. per lb. 
 
 Cheese Sd. to 4c?. 
 
 5. 
 Prices of the following Articles in 1819 and 1832. 
 
 January, 1819. January, 1832. 
 
 Sugar, fine Jamaica, 86s. to 89s. per cwt. 56s. to 58s. 
 
 Ditto, fine Havannah, 60s. to 68s. 32s. to 33s. 
 
 CoflTee, fine Jamaica, 143s. to 146s. 96s, to 100s. 
 
 Ditto, Java, 158s. 55s. to 62s. 
 
 Cotton,BowedGeorgia, Is. 5c?, to Is. 8c?, perlb, 5d. to 7c?, 
 
 Ditto, Bengal, 6|c?. to 9c?. 4§rf. to 5^d. 
 
 Hemp, Riga, Rhine, 50Z. perton, 39Z. to 40/. 
 
 Ditto, Petersburgh, 46/. 37/. 10s. 
 
 Tallow, Yellow Soap, 78s. per cwt, 42s. 6d. 
 
 Ditto, Petersburgh, 74s, 42s. 6d. 
 
 Whale Oil, Greenland, 36/. to 37/. per ton. 34/. 
 
 Ditto Spermaceti, 93/. 74/, 
 
 Deals, Memel, 22/. to 23/, per 100 16/. 10s. to 18/. 
 
 Timber, Ditto, 6/. 15s. to 6/. 17s. 6d. per load 51. to 51. 10s. 
 
 Tobacco, Virginia, 12c?. to 13c?. per lb. 4|c?, to 5d.
 
 102 APPENDIX. 
 
 Tables which indicate that an Abundance of Money in 
 the City, is at present connected with the Stagnation 
 of Trade. 
 
 1. 
 
 An Account of the Annual average amount of 
 Commercial Paper under discount at the Bank, in 
 London, in each year, from the year 1795. 
 
 1795.. 
 
 ,..£2,946,500 
 
 1814.. 
 
 £13,285,800 
 
 1796.. 
 
 ,.. 3,505,000 
 
 1815.. 
 
 ..14,947,100 
 
 1797.. 
 
 .. 5,350,000 
 
 1816.. 
 
 ..11,416,400 
 
 1798.. 
 
 .. 4,490,600 
 
 1817.. 
 
 .. 3,960,600 
 
 1799.. 
 
 .. 5,403,900 
 
 1818.. 
 
 .. 4,325,200 
 
 1800.. 
 
 .. 6,401,900 
 
 1819.. 
 
 .. 6,515,000 
 
 1801.. 
 
 .. 7,905,100 
 
 1820.. 
 
 .. 3,883,600 
 
 1802.. 
 
 .. 7,523,300 
 
 1821.. 
 
 .. 2,676,700 
 
 1803.. 
 
 ..10,747,600 
 
 1822.. 
 
 .. 3,366,700 
 
 1804.. 
 
 .. 9,982,400 
 
 1823.. 
 
 .. 3,123,80a 
 
 1805.. 
 
 ..11,366,500 
 
 1824.. 
 
 .. 2,369,800 
 
 1806.. 
 
 ..12,380,100 
 
 1825.. 
 
 .. 4,941,500 
 
 1807.. 
 
 ..13,484,600 
 
 1826.. 
 
 .. 4,908,300 
 
 1808.. 
 
 ..12,950,100 
 
 1827.. 
 
 .. 1,240,400 
 
 1809.. 
 
 ..15,475,700 
 
 1828.. 
 
 .. 1,167,400 
 
 1810.. 
 
 ..20,070,600 
 
 1829.. 
 
 .. 2,250,700 
 
 1811.. 
 
 . . 14,355,400 
 
 1830.. 
 
 .. 919,900 
 
 1812.. 
 
 ..14,291,600 
 
 1831.. 
 
 .. 1,533,600 
 
 1813.. 
 
 ..12,330,200 
 

 
 APPENDIX. 103 
 
 2. 
 
 An Account of the Average Aggregate Amounts of 
 Public and Private Deposits in the hands of the 
 Bank, /row 1807. 
 
 Years. Public Dep. Private Dep. 
 
 1807.. £12,647,551.. £1,582,720 
 
 1808 1 1,761 ,448 1,940,630 
 
 1809 1 1,093,648 1,492,190 
 
 1810 11, 950,047 1,428,720 
 
 1811 10,191,854 1,567,920 
 
 1812 10,390,130 1,573,950 
 
 1813 10,393,404 1,771,310 
 
 1814.... 12,158,227.... 2,374,910 
 
 1815 11,737,436 1,690,490 
 
 1816 10,807,660 1,333,120 
 
 1817 8,699,133. ...1,672,800 
 
 1818.... 7,066,887 1,640,210 
 
 1819 4,538,373 1,790,860 
 
 1820 3,713,442 1,325,060 
 
 1821 3,920,157 1,326,020 
 
 1822 4,107,853 1,373,370 
 
 1823 5,526,635 2,321,900 
 
 1824 7,222,187 2,369,910 
 
 1825 5,347,314 2,607,900 
 
 1 826 4,214,27 1 3,322,070* 
 
 1827 4,223,867 3,931,370 
 
 1828 3,821,697 5,701,280 
 
 1829 3,862,656 5,217,210 
 
 1830 4,761,952 5,562,250 
 
 1831.... 3,948,102.... 5,201,370 
 
 • Increased amount from this time arising from increase of accounts.
 
 104 APPENDIX. 
 
 What is meant in the City hy an Abundance of Money. 
 (Evidence of Thomas Tooke, Esq.) 
 
 5451. Can you state what is precisely meant, in the City, by 
 an abundance and scarcity of money in the country? — It 
 means strictly a tendency to a fall or rise in the rate of dis- 
 count. When money is said to be scarce in the City, it means 
 that either an advanced rate of discount is required, or that 
 only the first-rate description of bills, or those which have the 
 shortest date to run, are discounted at the previously current 
 rate. 
 
 5452. Then it is by no means synonymous with the abun- 
 dance or scarcity of currency ? — By no means. 
 
 5453. With the same amount of currency, there may be a 
 greater or less degree of scarcity of money ? — Yes : the rate 
 of discount may fall with a circulation, looking only to the 
 numerical amount, very contracted. 
 
 An excessive Issue of Paper will correct itself. 
 (Evidence of J. Horsley Palmer Esq., Governor of the Bank.) 
 
 86. In times of great commercial prosperity, would not the 
 leaving to the Public the correction of a redundant currency 
 lead to a greater redundancy, and to excessive speculation ? — 
 I think not. 
 
 122. How do you regulate your issues according to the 
 Foreign Exchanges ? — By the notes being returned for gold 
 or silver for export. 
 
 123. Do you regulate them from the returns you have of 
 what the Foreign Exchanges are, or from the action which 
 takes place upon the Bank ? — The action which takes place 
 upon the Bank. 
 
 124. Do you find that the alteration in the action upon the
 
 APPENDIX. 105 
 
 Bank is simultaneous with an alteration in the rate of the 
 Foreign Exchanges, and that it is the case invariably ? — 
 Certainly. 
 
 370. Have you any idea that the Bankers can maintain a 
 larger circulation in their districts than the wants of the country 
 at the time require? — No. 
 
 Government should supply paper vioney, and Banks conduct 
 the Banking business. 
 
 181. "What do you consider as the principal function which 
 it is the duty of the Bank to perform? — To furnish the 
 paper money with which the Public act around them ; — and 
 to be a place of safe deposit for the public money, and for 
 the money of individuals who prefer a piiblic body, like the 
 Bank, to private bankers. 
 
 182. Are not those functions the functions of a Govern- 
 ment rather than a private company ? — That is for the Go- 
 vernment to determine. 
 
 191. Are you aware, that during the whole of the War, 
 when the interest of money was high, and when 5 per cent 
 was rather a low interest to pay, the Bank of England were 
 very large discounters in commercial paper? — I believe that 
 the Bank of England could not have been discounters of 
 commercial paper at that period, if it had not been for the 
 Restriction Act. 
 
 478. Be so good as to state to the committee, in what 
 respect you think the private banker affords better accommo- 
 dation to the circulation of the country towns, than would be 
 derived from the existence of Branch Banks of the Bank of 
 England ? — I am most decidedly of opinion, that all banking 
 business is better done by private bankers than by public 
 bodies : there are more facilities offered in the way of credit 
 by a private banker, than can be offered under the existing 
 
 I
 
 106 APPENDIX. 
 
 regulations by a Branch of the Bank of England, which gives 
 no credit to any one ; and there are forms required to be 
 adhered to in acting with the Bank, which are extremely in- 
 convenient in conducting private business. 
 
 488. In speaking of banking business, do you mean the 
 ordinary business of a Bank of deposits, namely, receiving 
 deposits and lending money, or do you include circulation 
 and issue? — I am alluding simply to banking business, totally 
 unconnected with the circulation. 
 
 Return of the number of Commissions of Bankrupt, 
 issued against Country Banks since 1780. 
 
 1780.. 
 
 .. 
 
 1797.. 
 
 .. 2 
 
 1814.. 
 
 ..27 
 
 1781.. 
 
 .. 2 
 
 1798.. 
 
 .. 3 
 
 1815.. 
 
 ..25 
 
 1782.. 
 
 .. 2 
 
 1799.. 
 
 ,.. 6 
 
 1816.. 
 
 ..37 
 
 1783.. 
 
 .. 2 
 
 1800.. 
 
 ... 5 
 
 1817.. 
 
 .. 3 
 
 1784.. 
 
 .. 3 
 
 1801.. 
 
 ... 3 
 
 1818.. 
 
 .. 3 
 
 1785.. 
 
 .. 1 
 
 1802.. 
 
 ... 2 
 
 1819.. 
 
 ..13 
 
 1786.. 
 
 .. 
 
 1803.. 
 
 .. 5 
 
 J820.. 
 
 .. 4 
 
 1787.. 
 
 .. 
 
 1804.. 
 
 ... 2 
 
 1821.. 
 
 ..10 
 
 1788.. 
 
 .. 3 
 
 1805.. 
 
 ... 9 
 
 1822.. 
 
 .. 9 
 
 1789.. 
 
 .. 1 
 
 1806.. 
 
 ...5 
 
 1823.. 
 
 .. 9 
 
 1790.. 
 
 .. 
 
 1807.. 
 
 ,.. 1 
 
 1824.. 
 
 ..10 
 
 1791.. 
 
 .. 1 
 
 1808.. 
 
 ... 5 
 
 1825.. 
 
 ..37 
 
 1792.. 
 
 1. 1 
 
 1809.. 
 
 ... 4 
 
 1826.. 
 
 ..43 
 
 1792.. 
 
 ..22 
 
 1810.. 
 
 ..20 
 
 1827.. 
 
 .. 8 
 
 1794.. 
 
 .. 2 
 
 1811.. 
 
 .. 4 
 
 1828.. 
 
 .. 3 
 
 1795.. 
 
 .. 5 
 
 1812.. 
 
 ,..17 
 
 1829.. 
 
 o 
 
 1796.. 
 
 ... 3 
 
 1813.. 
 
 ... 8 
 
 1830.. 
 
 ..14
 
 APPENDIX. 
 
 107 
 
 No. III. 
 
 Official and Declared Value of Exports of British and 
 Irish Produce and Manufactures ; and Official Value 
 of Exports of Foreign and Colonial Merchandize from 
 Great Britain ; and Official Value of Imports into the 
 same, for the foUowino- years. — {Pari. Paper, No. 243. 
 Sess. 1830). — From M'Culloclis Diet, of Commerce. 
 
 Years 
 ending 
 Tth Jan. 
 
 EXPORTS. 
 
 IMPORTS 
 
 Britisli and Irish Produce 
 
 and Manufactures from 
 
 Great Britain. 
 
 Foreign & Co- 
 lonial Merchan- 
 dize from Great 
 Britain. 
 
 Into Great 
 Britain. 
 
 
 Official Value, 
 
 Declared Value 
 
 Official Value. 
 
 Official Value. 
 
 
 £. 
 
 £. 
 
 £. 
 
 £. 
 
 1799 
 
 18,556,891 
 
 31,252,836 
 
 8,760,196 
 
 25,122,203 
 
 1800 
 
 22,284,941 
 
 35,903,850 
 
 7,271,696 
 
 24,066,700 
 
 1801 
 
 22,831,936 
 
 36,929,007 
 
 11,549,681 
 
 28,257,781 
 
 1802 
 
 24,501,608 
 
 39,730,659 
 
 10,336,966 
 
 30,435,268 
 
 1803 
 
 25,195,893 
 
 45,102,230 
 
 12,677,431 
 
 28,308,373 
 
 1804 
 
 20,042,596 
 
 36,127,787 
 
 8,032,643 
 
 25,104,541 
 
 1805 
 
 22,132,367 
 
 37,135,746 
 
 8,938,741 
 
 26,454,281 
 
 1806 
 
 22,907,371 
 
 37,234,396 
 
 7,643,120 
 
 27,334,020 
 
 1807 
 
 25,266,546 
 
 39,746,581 
 
 7,717,555 
 
 25,554,478 
 
 1808 
 
 22,963,772 
 
 36,394,443 
 
 7,624,312 
 
 25,326,845 
 
 1809 
 
 24,179,854 
 
 36,306,385 
 
 5,776,775 
 
 25,660,953 
 
 1810 
 
 32,916,858 
 
 46,049.777 
 
 1 2,750,358 
 
 30,170,292 
 
 1811 
 
 33,299,408 
 
 47,000,926 
 
 9,357,435 
 
 37,613,294 
 
 1812 
 
 21,723,532 
 
 30,850,618 
 
 6,1 17,7.^0 
 
 25,240,904 
 
 1813 
 
 28,447,912 
 
 39,334,526 
 
 9,533,065 
 
 24,923,922 
 
 1814 
 
 * 
 
 * 
 
 * 
 
 * 
 
 1815 
 
 32,200,580 
 
 43,447,373 
 
 19,157,818 
 
 32,620,771 
 
 1816 
 
 41,712,002 
 
 49,653,245 
 
 15,708,435 
 
 31,822,053 
 
 1817 
 
 34,774,521 
 
 40,328,940 
 
 13,441,665 
 
 26,374,921 
 
 1818 
 
 39,2.'^3,467 
 
 40,349,235 
 
 10,269,271 
 
 29,910,502 
 
 1819 
 
 41,960,555 
 
 45,180,150 
 
 10,835,800 
 
 35,845,340 
 
 1820 
 
 32,983,689 
 
 34,252,251 
 
 9,879,236 
 
 29,681,640 
 
 1821 
 
 37,820,293 
 
 35,569,077 
 
 10,525,026 
 
 31,515,222 
 
 1822 
 
 40,194,681 
 
 35,823,127 
 
 10,602,090 
 
 29,769,122 
 
 1823 
 
 43,558,488 
 
 36,176,897 
 
 9,211,928 
 
 29.432,376 
 
 1824 
 
 43,166,039 
 
 34,589,410 
 
 8,588,096 
 
 34,591,264 
 
 1825 
 
 48,024,952 
 
 37,600,021 
 
 10,188,596 
 
 36,056,551 
 
 1826 
 
 46,453,022 
 
 38,077,330 
 
 9,155,305 
 
 42,660,954 
 
 1827 
 
 40,332,^54 
 
 30,847,528 
 
 10,066,,503 
 
 36,174,350 
 
 1828 
 
 .'51,279,102 
 
 36,394,817 
 
 9,806,343 
 
 43,489,346 
 
 1829 
 
 52,019,728 
 
 36,150,379 
 
 9,928,655 
 
 43,536,187 
 
 1830 
 
 55,465,723 
 
 35,212,873 
 
 10,606,441 
 
 42,311,649 
 
 Records destroyed by fire.
 
 108 APPENDIX. 
 
 Meaning of Official Value. 
 
 " The Official rates of vakiation may be regarded as a common 
 denominator, and as such, attended with great advantage, as an 
 Indicator of' Quantity ; and assuming, as it seems reasonable to do, 
 that the rates assigned in 1694, accorded with the current value of 
 the time, they are now doubly interesting, as shewing the change 
 that has since taken place in the value of the several articles." — Mar- 
 shall's Tables, 120th. 
 
 fftlNTED BY STEWART AND CO, OLD BAILEV.