THE UNIVERSITY 
 
 OF ILLINOIS 
 
 LIBRARY 
 
 33"2 
 3675

 
 Bw-' 
 

 
 //./•//'/(, 
 
 A 
 
 LETTER 
 
 TO THE 
 
 RIGHT HONOURABLE 
 
 WILLIAM PITT, 
 
 ON THE INFLUENCE OF THE 
 
 STOPPAGE OF ISSUES IN SPECIE 
 
 AT THE 
 
 BANK OF ENGLAND: 
 
 ON 
 
 THE PRICES OF PROFUSIONS, 
 
 AND OTHER COMMODITIES. 
 
 THE SECOND EDITION, CORRECTED. 
 
 By WALTER BOYD, Esq. M. P. 
 
 -redeant in aurum 
 
 Trrupora priscum. — Hor. Ode ii. Carm. lib. 4. 
 
 LOJVDOJV.- 
 
 PRINTED FOR JAMES RIDGWAY, 170, PICCADILLY. 
 
 OPPOSITE BOND STREET. 
 
 1811. 
 
 [Price 41.]
 
 W. I'liut, Printer, Old Bailey, Loudon. 

 
 ADVERTISEMENT 
 
 THIS EDITION. 
 
 Let no man presume against the merits 
 of this publication, by a pre-judgment 
 against the conduct or character of the au- 
 thor. He was zealously attached to Mr. 
 Pitt, and enjoyed his confidence for many 
 years. Let the reader observe the dates 
 of these letters to Mr. Pitt and Mr. For- 
 dyce, before he pronounces that Mr. Boyd 
 was not a man of the first abilities, or that 
 he did not understand the subject.
 
 PREFACE. 
 
 SINCE the following letter was written, 
 several circumstances have occurred to 
 corroborate the facts and reasonings which 
 it contains. 
 
 By the return to an order of the House 
 of Commons, it appears that the amount 
 of bank-notes in circulation, on the 6th 
 December, 1800, was 15,450,9701., which 
 exceeds the sum in circulation on the 26th 
 February, 1797, (viz. 8,640,2501.) by near- 
 ly four-fifths of that circulation. Compar- 
 ed with the average circulation of three 
 years, ending December, 1795, (viz. 
 11,975,573) the circulation on the 6th De- 
 cember, 1800, exceeds that average circula- 
 tion by nearly three-tenths of its amount, 
 s But
 
 Tl 
 
 But, from the mere return of bank-notes 
 (without that of the balances on the books, 
 for which the bank is likewise liable, and 
 of the specie in its coffers), no accurate 
 estimate can be formed of the positive dif- 
 ference between the present and the former 
 circulation. There may be objections to 
 the communication of any specific account 
 of the specie on hand ; but there can be 
 none to such a return as, without specify- 
 ing any sums, may ascertain the proportion 
 which the specie existing in the bank on 
 the 6th December, 1800, bears to that 
 which existed on the 26th February, 1797- 
 
 The exchange with Hamburgh which, 
 when the following letter was written, was 
 31.10, is now 29-10 ; by which means the 
 difference which then existed, of nearly 
 9 per cent, against our currency, is now in- 
 creased to upwards of 1-i per cent. If 
 
 therefore
 
 Vll 
 
 therefore a person residing on the continent, 
 remit funds to this country, to be invested 
 in the three per cents, at the price of 62, 
 it is evident that by purchasing the money 
 so remitted, at 14 per cent, discount, the 
 real price of his three per cents, will be 53 
 eight twenty-fifths, or nearly 53 one-third. 
 
 The price of goto! has fortunately not ad- 
 vanced, in the same proportion, within the 
 same period; the price, which, on the 11th 
 November, was 41. 5s. per ounce, being 
 now 41. 6s., which is a further advance of 
 a little more than one-sixth per cent., 
 thus making the whole premium upon gold 
 101. 8s. 8d. for every 1001. or something 
 more than ten five-twelfths per cent. 
 
 These circumstances, however afflicting 
 ought not to be considered as matter of 
 despondency, seeing the mere conviction
 
 iriu 
 
 of their having all arisen from one great 
 error, if strongly felt, will, with the energy 
 and resources of the country, properly call- 
 ed forth, infallibly lead to the means of re- 
 trieving that error. 
 
 In considering the influence of the ope- 
 rations of the bank of England on the 
 powers of the circulating medium of the 
 country, I have taken no notice of the ca- 
 pital of that establishment, because it forms 
 part of the public debt, which is altogether 
 distinct from that medium. 
 
 31 st December, ISOO.
 
 A 
 
 LETT Ell 
 
 TO THE 
 
 RIGHT HONOURABLE 
 
 WILLIAM PITT. 
 
 Clevelancl-Rozc, 
 \lth November, 1800. 
 
 SIR, 
 
 vJn many occasions, both before and 
 fince the ftoppage of iffues in fpecie at 
 the Bank of England, I have, as you know, 
 given it as my opinion, in converfation as 
 well as in writing, that the embarraffed 
 Circulation of the Metropolis, and the con- 
 fequent diflrefs all over the Country, which 
 began in 1796, and became fo alarming in 
 February 1797, proceeded folely from the 
 particular line of conduct which the Bank 
 of England had thought proper to puifue, 
 from the month of December 1795 to the 
 end of February 1797. To that conduft I 
 have uniformly attributed the diminution of 
 B the
 
 ( 2 ) 
 
 the Means of Circulation * which took 
 place within that period ; a diminution fo 
 difaflrous in its confequences as to depre- 
 ciate, in an alarming degree, the funded 
 Property of the Country, to cramp the ope- 
 rations of Commerce, to check the efforts 
 of Induflry, and finally to bring on that laft 
 ftage of Difcredit, which reduced the Bank 
 itfelf to the unheard of predicament of not 
 being able to anfwer the demands of the 
 Public for Specie, in exchange for its Notes. 
 
 This opinion was not the refult of any 
 partiality of mine for a favourite doctrine. 
 It was confirmed by the general conviclion, 
 which arofe from the labours of the Com- 
 mittees of both Houfes of Parliament. 
 
 * By the words " Means of Circulation/' " Circulat- 
 ing Medium" and " Currency," which are ufcd almoft as 
 fyuonymous terms in this Letter, I underftand always 
 ready money, whether confifting of Bank Notes or fpecie, 
 in contradittiti6tion to Bills of Exchange, Navy Bills, Ex- 
 chequer Bills, or any other negotiable paper, which form 
 no part of the circulating medium, as I have always under- 
 ftood that term. The latter is the Circulator ; the former 
 »re merely objects of circulation. 
 
 The
 
 ( 4 ) 
 
 The fame principles which enabled me 
 to trace to their fource the calamities pro- 
 duced by a ftarved calculation, not only af- 
 ter thofe calamities had become notorious, 
 but during their progreis, and long before 
 the meafure of them was full, lead me now 
 to fufpecl that the increafe in the prices of 
 almofr. all articles of necefTuy, convenience 
 and luxury, and indeed of almoft every fpe- 
 cies of exchangeable value, which has been 
 gradually taking place during the laft two 
 years, and which has recently arrived at fo 
 great a height, proceeds chiefly from the 
 addition to the circulating medium, which I 
 conceive to have been made by the iflue of 
 Bank-notes, uncontrouled by the obligation 
 of paying them, in fpecie, on demand. 
 
 Before the memorable 26th of February 
 1797, it had been the pride and boaft of this 
 country, for more than a century, that the 
 Bank of England, which had contributed fo 
 elfcntially to the extenfion of our Trade, 
 and to the confolidation of our Public Cre- 
 dit, had never, in any inflance, departed 
 from the mofl fcrupulous obfervance of the 
 
 obligation
 
 ( 3 ) 
 
 obligation (which indeed formed the fun- 
 damental condition of its inftitution) of pay- 
 ing every demand upon it, in fpecie, the 
 moment fuch demand was made. While 
 this condition, at once the pledge of its 
 good faith towards a confiding Public, and 
 the proof of its private profperity as a Com- 
 pany, remained inviolate, there was little 
 danger of an exce ffive circulation of Bank- 
 notes ; but, from the moment this condition 
 was difpenfed with, the danger of exceffive 
 iffues became apparent. Indeed it is not to 
 be fuppofed,that a corporation, whofe profits 
 chiefly arife from the circulation of its 
 Notes, and which is exclufively directed by 
 perfons participating in thofe profits, has 
 been, or could poffibly be, proof againft the 
 temptation, which the licence they have en- 
 joyed fince February 1797 has afforded. 
 That they have not refilled this temptation, 
 feems but too probable, from the general 
 advance in prices, which has gradually taken 
 place fince that period. 
 
 I am aware, that it may be faid, that there 
 exilts no proof of the increafe of paper to 
 
 which
 
 ( 5 ) 
 
 which I attribute the increafe of price. It 
 is precifely becaufe no pojitive proof does, or 
 can, publicly exift, of a fact neceflarily fe- 
 crct in it Pelf, 'that I (hall endeavour, by rea- 
 foning from effect to caufe, to eflablifh the 
 exiftcnce of that fa 61, or at leafl: to render 
 the probability of its exiftence fo great, 
 as to warrant my afiuming it in the ob- 
 fervations I have to fubmit to your confi- 
 deration. 
 
 I well remember that, during the year 
 1796, when I affumed as a fact (from the 
 notorious embarraflment of the general cir- 
 culation of the metropolis, and the great 
 fall which the (locks experienced during 
 that year) that the means of circulation 
 were greatly reduced, by the conduct which 
 I attributed to the Bank-Directors ; and 
 when I reprefented to you and others the 
 tendency of the wretched fyftem they were 
 purfuing, it was anfwered that I was mif- 
 taken, and that the Bank had never been 
 more liberal than during that year. But 
 when the crifis to which that eftablifhment 
 was reduced in February 1797, obliged the 
 
 Bank
 
 ( 6 ) 
 
 Bank to difclofe the fituation of its affairs, 
 the truth of the fac~h I had affumed was 
 completely eftablifhed. From what hap- 
 pened on that occafion, I truft it will not 
 be confidered an unnatural or unwarrant- 
 able conclufion, that an appeal to the aftual 
 flate of the affairs of the Bank would 
 equally bear me out in my prefent affump- 
 tion. But it does not reft upon fo narrow 
 a ground as that of a mere inference from 
 what happened on a former occafion. It is 
 fupported, on the one hand, by a great pub- 
 lic effect, fuch as naturally might be ex- 
 pected to arife from the fact, which I affume 
 as the caufe of it. On the other hand, it is 
 fupported by the intereft which the Bank 
 evidently has in the caufe to which I attri- 
 bute that effect ; and it acquires additional 
 ftrength from there being nothing to re- 
 ftrain the purfuit of that intereft. 
 
 Afluming then, that a great increafe of 
 Bank Notes has taken place, fince February 
 1797, and that fuch an increafe could not 
 have happened, in the fame period, if the 
 Bank had been bound to obferve the funda- 
 mental
 
 ( 7 ) 
 
 mental principles of its inftitution, namely, 
 the obligation to pay its Notes in fpecie, on 
 demand, I think myfelf warranted to infer, 
 not only that there is the higheft probabi- 
 lity that the increafe of Bank Notes is the 
 principal caufe of the great rife in the price 
 of commodities and every fpecies of ex- 
 changeable value ; but that the one is, to a 
 certain degree, the inevitable confequence 
 of the other. That the augmentation of 
 the quantity of money, or paper performing 
 the functions of money, in a country, has 
 a tendency to depreciate that money or 
 paper, is a principle univerfally recog- 
 nized. It is invariable in its operation, as 
 the law of gravitation ; and I am not ab- 
 furd enough to impute to the Bank Direc- 
 tors the inevitable effects of an irrefiftible 
 caufe. It is not becaufe the multiplication 
 of the reprefentative figns of money tends 
 to depreciate that money, that I confider 
 the increafe of Bank Notes as an evil. It is 
 becaufe I apprehend that a multiplication of 
 thofe figns has taken place, to an extent al- 
 together difproportioned to the time in 
 which it has been effected, and that it could 
 7 not
 
 ( 8 ) 
 
 not have been produced but by a notorious 
 dereliclion of thofe principles of public ceco- 
 nomy, which no country ever abandoned 
 with impunity. 
 
 I admit that the paper of the Bank of 
 England, in its prefent (late, unites, in a 
 higher degree than any other paper, not 
 convertible into fpecie, that ever was circu- 
 lated in, any country, all the qualities 
 which entitle it to confidence ; but if, in- 
 flead of fo much additional paper, not con- 
 vertible, at pleafure, into fpecie, this coun- 
 try had acquired by fupernatural means,and 
 thrown into every channel of circulation, 
 the fame additional currency in gold and 
 filver, within the fame period, this influx, 
 altogether difproportioned to the progrefs of 
 the induftry of the country, within that 
 period, could not have failed to produce a 
 very great rife in the price of every fpecies 
 of property, not all with equal rapidity, but 
 each by different degrees of celerity, ac- 
 cording to the frequency or rarity of its na- 
 tural contact with money. I do not mean 
 that this rife would have been fo great as 
 
 that
 
 ( 9 ) 
 
 that which has been occafioned by the in- 
 troduction of fo much paper, deftitute of the 
 effential quality of being conftantly con- 
 vertible into fpecie : but if a miracle had 
 produced fo much additional Gold and Silver, 
 it would have required another to have kept 
 amongft us whatever part of fuch additional 
 quantity exceeded the natural digeftive 
 powers of the country. That lurplus quan- 
 tity would have foon found its way into 
 other countries, to feek that employment 
 which it could not readily have found in 
 this. But Bank Notes poffefs no fuch 
 quality. They cannot be exported, except 
 by the intervention of Bills of Exchange on 
 foreign countries purchafed here, or drawn 
 in other countries upon this country, and 
 paid here ; and this channel happens to be 
 narrowed, beyond all former example, by 
 the prohibition of intercourfe with France, 
 Holland, Spain, and other parts of Europe. 
 
 Under fuch circumftances, ought we to 
 be furprifed, that the effects of an increafe 
 of the circulating medium of the metropo- 
 lis (thus operating as the elementary means 
 C of
 
 ( io ) 
 
 of circulation, and communicating its in- 
 fluence to the whole Paper Circulation of 
 the country, which turns, if I may fo ex- 
 prefs myfelf, round it as its common cen- 
 ter) are felt in all the articles of domeftic 
 confumption and expence, and that they 
 are felt the molt in thofe articles which 
 form the nourifhment of the great body of 
 the people? 
 
 Permit me to call your attention to a 
 circumftance of public notoriety in the 
 hiftory of the Bank of England, which will 
 be found not unimportant, in illuftration of 
 the theory I have laid down. 
 
 By the ftatement of the Affairs of the 
 Bank, fubmitted to Parliament, in February 
 1797, it appears that the outftanding de- 
 mands upon the Bank, including the fum 
 of 8,640,2501. due upon its notes, then in 
 circulation, amounted to £.13>770>39° 
 The amount of Gold and Sil- 
 ver, then in the coffers of the 
 Bank, was not Hated; but, 
 in order to account for the 
 prefTure
 
 ( " ) 
 
 preflure which occafioned 
 the Order of Council, it may 
 furely be reafonably fuppofed 
 that it did not exceed £. l ,770,390 
 
 And that, therefore, the Bank 
 had added to the powers of 
 the circulating medium of the 
 country, in the fpace of 103 
 years - - 12,000,000 
 
 By the circulation of Bank 
 
 Notes to the amount of 8,640,250 
 
 And by Credits in the Books 
 
 of the Bank, which may be 
 
 confidered as Bank Notes, 
 
 virtually, though not really 
 
 in circulation, feeing all thofe 
 
 credits might have been con- 
 verted into Bank Notes, at 
 
 the pleafure of the perfons 
 
 fo credited in the Books of the 
 
 Bank - - 5» 1 3°» 1 4o 
 
 £-i3>77°*39° 
 and
 
 ( 12 ) 
 
 and keeping (according to the fuppofition I 
 go upon) only £\ 1,770,390, in fpecie, for 
 paying fuch demands as might be made 
 upon the Bank, in confequence of fuch 
 notes and credits. 
 
 Much has been written in order to ascer- 
 tain the proportion between the circulating 
 money of a country, and the value of the 
 annual produce of the land and labour of 
 that country. The flate of the affairs of 
 the Bank of England, in February, 1797, 
 does not decide this point, which will pro- 
 bably for ever elude the refearches of hu- 
 man ingenuity ; but it (hews how fmall the 
 wheel of circulation is, compared with the 
 immenfe revenue which it is capable of dif- 
 tributing, and the infinite variety and vaft 
 extent of tranfa61ions which it can carry on. 
 The great financial and commercial opera- 
 tions, which had taken place in this country 
 during a century ; the creation of a debt of 
 three hundred millions ; the extenfion of 
 the trade of England to the gigantic fize it 
 had arrived at ; the conftant anticipations 
 
 of
 
 { 13 ) 
 
 of part of the public revenue, and the unin- 
 terrupted payment of the annuities on the 
 public debt, during fo long a period, che- 
 quered, as it has been, with fo great a va- 
 riety of fortune ; all the aftonifhing effecls, 
 which the world had been accuftomed to 
 attribute to the unfathomable credit and re- 
 fources of the Bank of England, had been 
 produced (in fo far as that Bank contri- 
 buted to produce them) by a gradual 
 addition to the powers of the circulating 
 medium of the country, which, at the end 
 of one hundred and three years, is found to 
 amount to no more than twelve millions. 
 But, it will be faid, that the twelve mil- 
 lions I reckon upon, are only the amount 
 of the notes and credits, as they flood after 
 the great reduction of notes, which had 
 taken place between December 1795 and 
 February 1797, and that it would be un- 
 candid to take the period of the greateft re- 
 duction, as a point of comparifon with any 
 fubfequent period. To obviate this objec- 
 tion, I will take the average amount of 
 
 Bank- 
 
 8
 
 ( 14 ) 
 Bank-notes for three years ending Decem- 
 ber 1795, viz. - - £-u>975>573 
 And the credits as they flood 
 
 in February 1797 (having no 
 
 other data by which to efti- 
 
 mate them) - 5, 130,1 40 
 
 17.105,713 
 
 And fuppofe the fpecie, for 
 paying both, to have been 3> 10 5>7 1 3 
 
 Leaving thus an addition to the 
 powers of the circulating 
 medium of the country, of £.14,000,000 
 
 From this eftimated ftatement, as well as 
 from the real Hate, of the affairs of the 
 Bank, (which laft appears to be incontro- 
 vertible, in all refpecls, except as to the 
 quantity of fpecie on hand, which neceffa- 
 rily refts on fuppofition) it may fairly be 
 inferred that an addition of* i-6th, i-8th, 
 
 # Since this letter was written and fent, in manu- 
 fcript, to Mr. Pitt, the Governor of the Bank, as I 
 have been afTured, acknowledged in the Houfe of Com- 
 mons
 
 ( '5 ) 
 
 i-ioth, or even 1-I4th, in the fhort period 
 of three years, to the amount of notes and 
 credits, which was the refult of the accu- 
 mulated credit of a century, under the fyf- 
 tem of unconditional converfion into fpecie, 
 muft, of itfelf, have produced a fenfible ef- 
 fect on the prices of things in general, 
 without reckoning upon the important dif- 
 ference between a fmaller mafs of the 
 means of circulation, conftantly convertible 
 into fpecie, and a greater mafs of thofe 
 means, convertible only in a very fmall de- 
 gree. 
 
 Still, it will be faid, all this reafoning 
 upon the effefts of an increafe of the means 
 of circulation (however juft, if the exift- 
 
 mons, on Thurfday the 27th of November, that the 
 circulation of Bank Notes has been increafed one- 
 fixth or one-feventh fince the ftoppage of iflues in fpecie, 
 in February 1797; but as I was not prefent, I cannot 
 vouch for the accuracy of this report. If, however, it 
 be accurate (and I have no reafon to doubt that it \s) it 
 proves the truth of the fadl which I aflumed as to an 
 increafe of Bank Notes, and eftabliflies even more, with 
 regard to the degree of that increafe, than I fuppofed ne- 
 ceflary to produce all the effecb J attributed to it. 
 
 ence
 
 ( 16 ) 
 
 ence of fuch increafe were proved) proceeds 
 upon what, at beft, can only be called pre- 
 fumptive evidence of its exiftence ; but 
 when, on the one hand, it is confidered 
 what important effects were produced, in 
 1796 and 1797, by the diminution of the 
 means of circulation, and how juftly thofe 
 effects were traced to that caufe, long be- 
 fore its exiftence was actually proved; 
 and, on the other, the rife that has taken 
 place, in the price of almoft every fpecies of 
 exchangeable value, during the period in 
 which the Bank of England has enjoyed the 
 power of ifluing Notes, without being 
 obliged to pay them, it certainly will not be 
 denied, that no prefumptive evidence can 
 poflibly reft on ftronger grounds. If you 
 allow that my theory is juft, and that if a 
 confiderable increafe of the means of circu- 
 lation, fuch as they are, have actually 
 taken place, its confequences would be 
 fuch as I have defcribed them, you will, I 
 think, likewife allow that, with the ftrong 
 circumftances which warrant the fufpicion 
 of the exiftence of fuch increafe, it is highly 
 deferving of the attention of Parliament to 
 
 have
 
 ( 17 ) 
 
 have this point afcertained, by an accurate 
 itatement of the amount of all demands on 
 the Bank of England, and of the gold and 
 filver in its coffers. There ought not to 
 exifi: any reafon for withholding this infor- 
 mation, as long as the Bank avails itfelf of 
 the licence for refufing to pay its notes on 
 demand. In the enquiry, which will natu- 
 rally be ordered, into the caufes of the pre- 
 fent high prices of provifions, it mult be of 
 great importance, that the attention of Par- 
 liament fhould be directed to this point, and 
 that every poflible light fhould be afforded 
 on the fubjeft of circulation, as being, from 
 its very nature, peculiarly complex and 
 obfcure. 
 
 On no fubje£l is the human mind fo apt 
 to miftake a fecondary caufe for a primary 
 one ; on none is it fo apt to afcribe to one 
 object the qualities which belong to ano- 
 ther; and to confound caufes with effects. 
 
 Of this there is a flriking proof in the 
 
 common-place declamation urJon the en- 
 
 creafe of the public debt, as forming an ad- 
 
 D dition
 
 ( i8 ) 
 
 dition to the circulating money of the coun- 
 try ; while the fact is, that the public debfc 
 and the currency of the country are 
 
 tf Diftinft, as is the fwimmer from the flood." 
 
 The firft is a portion of the value of indivi- 
 dual induftry ftored up as a capital yielding 
 an annual revenue ; the fecond occafionally 
 transfers a part of that capital from one per- 
 fon to another. — The one produces a reve- 
 nue; the other dijlributes that revenue ta 
 the different proprietors of it. — The firft is 
 occafionally an object of circulation ; the 
 fecond is the common circulator of the va- 
 lue of all objects. 
 
 Another proof of the confufion of ideas 
 on the fubjecl: of circulation, will be found 
 in the ordinary complaints againft a profu- 
 fion of paper, as proceeding from Country- 
 Banks, to which it has, of late, been pretty 
 much the fafhion to attribute, in part, the 
 great rife in the price of provifions. This 
 is clearly miftaking a fecondary caufe for a 
 primary one.
 
 ( 19 ) 
 
 The Country-Banks, it is faid, by their 
 iffues of paper, create a new medium of cir- 
 culation, by which they enable their cufto- 
 mers, that is, the holders of their notes, to 
 keep longer on hand, than they otherwife 
 could afford to do, the various articles of 
 production neceffary for the fupport of man. 
 But Country-Banks have long been in the 
 practice of iffuing notes, and the complaint, if 
 at all better founded now, than it ever was, 
 can only apply to fuch extraordinary aug- 
 mentation as may have recently taken place 
 in their circulation. Befides, thefe Banks 
 are bound to obferve a degree of moderation 
 in their iffues, to which the Bank of Eng- 
 land is not now reftrained. Every note 
 which the Country Banker iffues is payable 
 on demand, either in fpecie, or in notes of 
 the Bank of England. It may therefore be 
 inferred, that no part of thefe iffues can 
 poffibly remain in circulation, beyond what 
 the encreafing profperity and induftry of the 
 country where they circulate, can fairly ab« 
 forb or digelt. 
 
 Th?
 
 ( *i ) 
 
 The circulation of thefe notes of Country- 
 Banks is under a controul equally falutary 
 as that which reftrained the iflues of Bank 
 of England notes, while that corporation 
 Was bound to pay, and did pay, every de- 
 mand upon it, in fpecie ; and it certainly is 
 a mofl violent flretch of conjecture to fup- 
 pofe,. that exceffive circulation is more 
 likely to arife from the iffue of paper con- 
 ftantly payable on demand, than from that 
 of paper not payable at all. The circulation 
 of Country Bank-notes mud necelfarily be 
 proportioned to the fums, in fpecie, or Bank 
 of England note?, requifite to difcharge fuch 
 of them as may be prefented for payment ; 
 but the paper of the Bank of England has 
 no fuch limitation. It is itfelf now become 
 (what the coin of the country only ought 
 to be) the ultimate element into which the 
 whole paper circulation of the country re- 
 folves itfelf. The Bank of England is the 
 great fource of all the circulation of the 
 country j and, by the increafe or diminution 
 of its paper, the increafe or diminution of 
 that of every Country-Bank is infallibly re* 
 guiated, That the operations of Country- 
 man Jss
 
 ( 21 ) 
 
 Banks tend to facilitate fpeculation and en- 
 terprize, and to augment the general circu- 
 lation of the whole country, is unquestion- 
 ably true ; but they do fo, only in the fame 
 manner as the London Bankers promote 
 fpeculation and enterprize in town. Both 
 have been productive of invaluable advan-' 
 tages to the induftry and trade of the coun- 
 try at large ; and both, like all human in- 
 flitutions, may have been frequently turned 
 to improper purpofes. The balances due 
 on the books of a London Banker to his 
 cuitomers, and the notes in circulation of 
 a Country-Bank equally conftitute the 
 amount of the demands, which the public 
 has a right to make, on the one and on the 
 Other; and the difference between the 
 amount of Bank notes and fpecie referved by 
 each for anfwering fuch demands, and the 
 amount of the fu ins due by each, is equally 
 an addition to the powers of the circulating 
 medium of the country ; although the dif- 
 ference in the one cafe, arife from the u(c 
 of open accounts, and, in the other, from 
 the circulation of promiiFory notes, on de- 
 mand, The edict on the general powers 
 
 of
 
 ( 22 ) 
 
 of the circulating medium of the country 
 is, in both cafes, to augment thofe powers ; 
 to make a final ler fum perform the fame 
 functions, which a larger one (without the 
 intervention of Banks and Bankers) would 
 have been required to perform; and the 
 effect of each, to the Banker in Lombard- 
 ftreet, as to the Country Banker, is to 
 afford a revenue, which, but for their in- 
 tervention, would have been loft to the 
 community. The circulation of Country 
 Bank-notes may be defined Atlive Circula- 
 tion, as proceeding from the proper Act of 
 the Bank which iffues them : that of a 
 London Banker may be called Paffive Cir- 
 culation, as proceeding from the operations 
 of others, who have the power of iffuing 
 their Orders upon him. 
 
 The advances which the London Banker 
 makes to his cuftomers, or to the Public, 
 in confequence of the cafh and Bank-notes 
 depofued with him, and the advances which 
 the Country Banker makes to his cuf- 
 tomers, or to the Public, in confequence 
 of the fums lodgecl with him, upon, 
 
 his
 
 ( 23 ) 
 
 his promiffory Notes, payable on de- 
 mand, muft be greater or fmaller, in pro- 
 portion to the abundance or fcarcity of 
 Bank of England notes or fpecie, at any par- 
 ticular time. The addition to the means 
 of circulation, which arifes from the Lon- 
 don Bankers accounts, and from the notes 
 of the Country Banker, is a fair, lawful, 
 and valuable acquifition to the community. 
 It proceeds from the voluntary confidence 
 of the Public, founded upon the uncondi- 
 tional obligation to repay, on demand, the 
 fums depofited with them, either in fpecie 
 or in the notes of the Bank of England. If 
 the great oftenfible inftrument of circula- 
 tion confifted of coin, inftead of confiding 
 of Bank-notes, not only the London Banker 
 and the Country Banker would do the 
 famebufinefs they now do; but they would 
 probably do a great deal more, on account 
 of the fuperior convenience, which would 
 be found in their fervices, in confequence 
 of fuch a change. It feems a little hard to 
 reftrain, even in idea, fuch truly valuable 
 members of fociety, in the free exercife of 
 
 their
 
 ( H ) 
 
 their talents and credit, under a regimen of 
 Bank-notes, which they would infallibly 
 enjoy, even in a fuperior degree, under a 
 regimen of gold and filver. If the extent 
 of thefe accounts and notes be greatly in- 
 creased, within the lad two or three years, 
 this can only have arifen from the increafe 
 of iffues by the Bank of England, of which 
 the former are merely collateral effects. 
 The inconvenience, arifing from an excels 
 of Country Bank-notes, can only operate as 
 a fecondary caufe. That which arifes from 
 an excefs of Bank of England notes, is a ra- 
 dical and primary caufe, which alone has 
 produced, or can produce, any very import- 
 ant effects on the general circulation of tlte 
 country. \ 
 
 But it may be faid, that the great and ge- 
 neral rife of prices, which I have been 
 mentioning as a proof of the exiftence of a 
 great increafe of Bank-notes, remains itfelf 
 to be proved. To this I reply, that when 
 a facf is proved by the concurring teflimony 
 of a whole community, and when every 
 ^> man
 
 ( 25 ) 
 
 man mull feel the convict ion of its exig- 
 ence, it would be a mere wade of time to 
 defcend to particulars, in order to prove 
 that fa£t. Every man feels, in his abridged 
 comforts, or in his increafed expences, the 
 exiftence of this melancholy truth ; but 
 every man does not know that what, in vul- 
 gar language, bears the name of " Increafe 
 of Price" might, with perhaps more pro- 
 priety, be called " Depreciation of Paper." 
 Of this there is, in the prefent price of 
 Gold-bullion, a very ftrong proof, and one 
 which, from its nature, comes more home 
 to the ordinary feelings and understandings 
 of men, than any other proof whatever. 
 " Portugal Gold in Coin" has, for thefe 
 laft fix months, been felling in the London 
 Market, at 4/. 5J. per ounce. It is of the 
 fame quality with our flandard Gold, of 
 which the Mint-price is 3/. ijs. \o\d. per 
 ounce ; and a pound of the one, like a pound 
 of the other, when coined at the Mint, will 
 produce forty-four guineas and a half, and 
 no more. Therefore, if a pound of Portu- 
 gal gold, be purchafed at 4/. 5J. per ounce, 
 E it
 
 ( 26 ) 
 
 it will coll ^.51 o o 
 
 And only produce, in coin, 
 forty-four Guineas and a half, 
 of which the current value is 46 14 6 
 
 And confequently will occafion 
 
 alofsof - - £. 4 5 6 
 
 This is a difcount which the common 
 currency of the country fuffers, when ex- 
 changed for bullion (in all refpecls equal to 
 our ftandard gold) if nolefs than 8/. js. y%d. 
 for every 100/. or a little more than 8# 
 per cent. 
 
 If the idea of a difcount upon our cur- 
 rency be unpleafant, we may fay, that Gold 
 bears a premium in the Market; but, in 
 that cafe, this premium muft be called 
 gj. $s. for every 100/. or fomething more 
 than g} per cent; becaufe, if 46/. 14s. 6d* 
 in gold, coft 51/. in Bank-notes, 100/. in 
 gold, will coft 109/. 3 s. in Bank-notes. 
 
 I believe there is no example of Guineas 
 having been exchanged otherwife than at 
 
 par.
 
 ( 27 ) 
 
 par. The few that are employed for the 
 common purpofes of occafional domestic 
 circulation, pafs for no more than their cor- 
 refponding current value in paper ; and 
 thefe few have, I believe, hitherto been al- 
 ways readily found, when wanted ; but, 
 it mud be evident, notwithstanding, that 
 the intrinjtc value of the coin of the coun- 
 try, when of the proper weight, or (which 
 comes to the fame) of the materials of 
 which that coin is compofed, is, according 
 to this calculation, 9i per cent, more than 
 that of the general currency of the coun- 
 try. 
 
 While fuch a difference exifts between 
 Gold in its current ftandard value, as coin, 
 and its intrinfic value as a commodity ; or, 
 in other words, while the real value of Gold 
 fo far exceeds that of our currency, however 
 compofed, much of the coin will neceflarily 
 be melted, for the purpofe of profiting by 
 that difference ; the common currency be- 
 ing in all refpe&s, equally effectual for dis- 
 charging debts as our Gold Coin, with all 
 
 the
 
 ( 28 ) 
 
 the intrinfic fuperiority it poflefles Over 
 that currency. 
 
 The fame circumflances which raife the 
 value of Gold in the home-market, necef- 
 farily tend to depreciate our currency when 
 compared with the currency of other coun- 
 tries ; and accordingly we find, that the 
 exchange with Hamburgh, which may be 
 conlidered as the proper criterion, (while 
 our intercourfe with France, Holland, 
 Spain, and fevcral other parts of Europe is 
 fufpended) of which, according to the evi- 
 dence I delivered before a Committee of the 
 Lords in 1797, the par is 34 : 8±s< is now 
 at 31 : 10/. which eftablifhes a, difference of 
 nearly 9 per cent, againft this country. 
 
 While fuch a temptation to export coin 
 exifts, it is in vain to expect that any /aw 
 can prevent its going abroad. 
 
 I am aware that our exchanges have, at 
 times, been as much againft us, even pre- 
 vious to the reftriciion of payments in fpe- 
 
 8 cie
 
 ( 2 9 ) 
 
 cie at the Bank, and that Gold has fre 
 quently borne a premium before that event ; 
 but thefe unfavourable circumftances were 
 never of long duration: and, that they 
 have, from fome temporary caufe, occa- 
 fionally taken place, while no general de- 
 rangement of prices prevailed, diminishes 
 little of the force of their appearing, in 
 common, with fo many other proofs of 
 fuch general derangement. 
 
 In no cafe is it more important carefully 
 to attend to the circumftances, which oc- 
 cafion a revolution in price, than when fuch 
 revolution arifes in the price of exchange, 
 which I have had occaflon frequently to re- 
 mark, often happens from caufes altogether 
 different from, and fometimes even oppofite 
 to, fuch as might be expected to produce it. 
 Extreme diftrefs in the mercantile world 
 frequently produces a great number of 
 drawers on foreign countries, merely upon 
 credit. This has momentarily the fame ef- 
 fect, which would be produced upon the ex- 
 change by a large balance being due by the 
 
 countries
 
 ( 3° ) 
 
 countries drawn upon ; to the country that 
 draws. In the year 1793, during the ex- 
 treme difficulties which the Merchants and 
 Traders experienced, the exchange with the 
 Continent became fo favourable, as to render 
 the importation of gold a very lucrative bu- 
 finefs. It was at that time very generally 
 reported, that guineas were fent abroad, and 
 to this alledged exportation many people 
 attributed the reduction of difcounts at the 
 Bank, that produced the diftrefs, which it 
 required the interference of Parliament to 
 remedy. The gold of this country was then 
 guarded more effectually than any Law 
 could guard it. It could not go out of the 
 kingdom, without an immenfe lofs to the 
 exporter. As no Law could have then car- 
 ried money out of the country, fo no Law 
 of any kind can, in the prefent fituation of 
 the exchange, prevent its going out. 
 
 Again ; a great purchafe abroad, of an 
 article on which this country may ultimately 
 gain a large fum, has the effecl of producing 
 the fame apparent fymptoms of unfavour- 
 able trade, as indicated by the courfe of the 
 
 exchange
 
 ( 31 ) 
 
 exchange, which would be occafioned by a 
 fudden diminution of the confidence of fo- 
 reigners, in confequence of any great na- 
 tional difafter, or in confequence of a change, 
 real or apprehended, in the currency of the 
 kingdom ; but the effects of thefe diftincl: 
 caufes would be very different in their in- 
 fluence on the general profperity of the 
 country, and in their duration. I have 
 thought it right to enter into this explana- 
 tion, in order to fhew that I have not fallen 
 into the error, which otherwife might per- 
 haps have been imputed to me, of having 
 cited, as proofs of the confequence of a 
 paper-currency, not convertible into cafh, 
 the unfavourable ftate of the exchange, and 
 the premium upon gold, while both of thefe 
 circumflances can be proved to have occa* 
 fionally exifled, during a currency of gold 
 and filver, or (which comes to the fame 
 thing) of paper always convertible into, and 
 therefore truly and faithfully performing the 
 functions of, thofe medals. It is not merely 
 becaufe foreign exchanges are againft us, or 
 becaufe bullion is very high, that I fufpe6l 
 there has been a great addition made to our 
 
 currency
 
 ( 32 ) 
 
 currency (as there has unquestionably been 
 an important change in its composition) but 
 finding thefe flrong fymptoms, in common 
 with fo many others, I am fully warranted 
 to afcribe them to the fame great and gene- 
 ral caufe. An unfavourable exchange, and a 
 high premium on bullion have exifted, and 
 may occasionally exift, from caufes not only 
 altogether different from that to which I now 
 attribute them, but of a contrary tendency ; 
 yet fo infeparably are they connected with 
 an excefs of paper-currency, that fuch ex- 
 cess cannot poflibly exift without being 
 accompanied by them. If all the other 
 fymptoms of that fuppofed excefs had exift- 
 ed, and our exchanges and bullion had re- 
 mained unaffe61ed,for any confiderable time, I 
 Ihould have doubted the truth of my theory. 
 
 While the Bank of England paid its notes 
 in fpecie, on demand, if the exchange took 
 an unfavourable turn, and it became advan- 
 tageous to fend gold abroad, no doubt gui- 
 neas were drawn from the Bank in larger 
 quantities than when no fuch unfavourable 
 exchange exifted. Many of thefe guineas 
 
 were
 
 ( 33 ) 
 
 were, no doubt, fmuggled out of the king- 
 dom ; but the confequence of this drain of 
 guineas from the Bank, was not only, of it- 
 felf a powerful antidote to the very evil of 
 an unfavourable exchange, but it naturally 
 led the Bank to take defenfive meafures 
 againft the effecls of this drain, and thefe 
 meafures, in their turn, tended to reftore 
 the exchange to its natural level. In the 
 prefent cafe, entrenched as the Bank is, be- 
 hind the acls of Parliament which not only 
 author fe, but order, the refufal of fpecie in 
 exchange for its notes (except for particular 
 purpofes and for the payment of the notes 
 of ll. and 2l.)» that eftablifhment is not 
 compelled to any exertions to remedy the 
 evil of an unfavourable exchange, or to re- 
 ftore the equilibrium between coin and bul- 
 lion. The profits of the Bank are acquired 
 much more eafily, and to far greater amount, 
 under the regimen of reftriclion than under 
 that of freedom; for we are not to expecl, 
 that the apprehenfion of an increafed depre- 
 ciation, at fome future period, is to diminifh 
 the ardour of the Bank for prefent profits. 
 
 F With
 
 ( 34 ) 
 
 With the profpeft before us of large im- 
 portations of grain (whether really nccejjary 
 or not, I need not now enquire, which 
 mull add infinitely more to the prefTure upon 
 the exchange than any tranfa£lion of equal 
 magnitude, lefs expofed to general obferva- 
 tion, there is but too much reafon to fear 
 that the proportion which now exifts be- 
 tween bullion and paper, and that between 
 our currency and the monies of foreign 
 countries, will greatly increafe, in the next 
 months, unlefs fome powerful meafures be 
 reforted to, in order to counteract the ef- 
 fects of the prefent fyflem. — On the confe- 
 quences of any farther depreflion of the ex- 
 change, and on thofe of the increafed pre- 
 * mium upon gold, which necefTarily muft ac- 
 company it, I (hall fay but little. They 
 muft readily prefent themfelves to your 
 mind, in all the variety of fhapes in which 
 they will bear upon that part of the public 
 refources which is deftined to pay for the 
 fervices, and purchafe the ftores of every de- 
 fcription, whether naval or military, which 
 a (rate of hoftilities more extenfive in its 
 fcale, and confequently in its expenfe, than 
 
 any
 
 ( 35 ) 
 
 any in which this country ever was engaged, 
 rieceflarily requires. In every tranfaclion, 
 whether foreign or domeftic, in which Go- 
 vernment is the purchafer of fervices to be 
 performed, or value to be delivered, any di- 
 minution of the effective powers of the mo- 
 ney with which thefe purchafes are made 
 muft increafe their price, and confequently 
 tend to render the fums, however ample 
 when voted, inadequate to the purpofes for 
 which they are voted. 
 
 The ordinary revenue, as well as the ex- 
 traordinary refources, of the country, for 
 meeting the unavoidable expenfe of the civil 
 government, providing for the payment of 
 the interelt on the public debt, and for de- 
 fraying the expences of the naval and mili- 
 tary fervices of the year, are all receivable 
 in the notes of the Bank of England. The 
 nominal extent of thefe revenues and re- 
 fources (like the nominal price of fervices, 
 not liable to variation, and the fixed charge 
 of interefl on the public debt) can be, and 
 always are, accurately afcertained ; but the 
 effective pavers of the fums deftined to pur- 
 chafe
 
 ( 36 ) 
 
 chafe every kind of fervice, of which the 
 price is not fixed, cannot be ascertained, 
 feeing the money or currency of which 
 thefe fums confift, is liable not only to va- 
 riation, but to a depreciation of which it is 
 impoflible to aflign the limits. 
 
 But the influence of a great depreciation 
 of our money will not be confined to the 
 operations of Government. Not only will 
 Government buy all the naval and military 
 ftores which are imported from abroad at 
 an advance, proportioned to the depreffion 
 of the exchange ; but the whole imports of 
 the Country, of which the value is to be 
 remitted abroad, muft experience a fimilar 
 advance. The effects of this advance on 
 the prices of articles imported, as operating 
 with the tendency to increafe of price, 
 which all other articles muft feel at home, 
 it is painful to confider and unneceffary to 
 ftate. 
 
 I gladly turn to the more pleafing talk of 
 mentioning the probabh good which may be 
 fairly reckoned upon as the concomitant of 
 
 fa
 
 ( 37 ) 
 
 fo much pqfitive evil. If the increafe of 
 prices in the home-market fhould fortu- 
 nately not keep pace with the depreffion of 
 the exchange, all our articles of exportation 
 muft feel the effects of the increafed de- 
 mand in the foreign markets, in confe- 
 quence of the diminished value of Britifh 
 money abroad ; and although, in many of 
 thefe articles, no increafe of demand can 
 add to the quantity to be exported, in many 
 others, this increafed demand may, and, I 
 truft, will, add to the means of fupplying 
 it. Articles imported for the purpofe of 
 being manufactured for exportation are of 
 this defcription : fo are all articles of home 
 production employed in manufactures. 
 Thefe may be greatly extended in confe- 
 quence of the increafed demand which the 
 diminifhed value of Britifh money in fo- 
 reign countries neceffarily tends to create. 
 How much of this probable good may be de- 
 ftroyed by the effects of the evil which mufl 
 accompany it, or whether a probable increafe 
 of induftry in any branch of manufacture 
 proceeding from a caufe which diminifhes 
 the value of the money that is tofet it in mo- 
 tion,
 
 ( 38 ) 
 
 tion, ought to be reckoned upon, without 
 at the fame time, taking into the account 
 the increafe of wages which induflry, un- 
 der fuch circumflances, would have a right 
 to expe£t, are questions into which I fhall 
 not now enter. It is enough to have point- 
 ed out a probable fource of comfort amidfl 
 fo many caufes of uneafinefs, without cal- 
 culating the various chances by which that 
 comfort may be diminifhed. 
 
 The pronation of the means of circulation 
 which has been introduced by the floppage 
 of iffues of fpecie at the Bank, has certainly 
 contributed more than any other caufe to 
 the great rife in the price of flocks which 
 has taken place within the fame period in 
 which a rife has happened in almoil every 
 other object of exchangeable value. This, 
 you will fay, is a very pleafing effect, and 
 ought not to be Hated among the evils of 
 profufe circulation. It is, like every other 
 t^ing, good only to a certain degree. In 
 fo far as any meafure raifes the value of the 
 funded property of the country, and enables 
 Government to borrow upon better terms 
 
 thaa
 
 '( 39 ) 
 
 than otherwife could have been obtained, 
 f uch meafure is decidedly good ; but if it 
 be founded in a circulation radically vitiated, 
 and tend to raife the nominal more than the 
 real value of the funds, and moreover di- 
 minifh the ejficlive powers of the fums bor- 
 rowed, fuch meafure is no longer entitled 
 to approbation. If the fupplies lately grant- 
 ed have not purchafed the fame, or any 
 thing like the fame, fervices to the Public 
 which they would have purchafed in the 
 years preceding the floppage of iffues in 
 fpecie at the Bank; it mull be of little 
 real importance to the Public that the prices 
 of flocks, inftead of being diitinguifhed by 
 the figures 52 and 53, as they were in Fe- 
 bruary 1797, are now diftinguifhed by the 
 figures 63 and 64. 
 
 That thefe fupplies have not purchafed 
 the fame quantity of fervices which they 
 would have purchafed before the change in 
 our currency took place, I may venture to 
 aflert without the fear of contradiction. If 
 you call for proof, I may appeal to the re- 
 cords of Parliament, or to the teilimony of 
 5 your
 
 ( 40 ) 
 
 your own mind, which, as the beft inform- 
 ed commentator on thefe records, muft, I 
 am lure, be decifive on this point. 
 
 When it is confidered that fince February 
 1797, the addition to the funded debt (in- 
 cluding what was then floating in the mar- 
 ket in the {hape of Scrip of the loan of eigh- 
 teen millions, raifed by voluntary fubfcrip- 
 tion) is no lefs than 168,946,9201. 17s. 3d. 
 and that, during the period in which this 
 immenfe addition has taken place, the price 
 of three per cents has rifen from 53 -§• to 
 64. y ; who that ever turned his thoughts to 
 fuch fubjefts, can have a doubt with regard 
 to the real caufe of an effe£l which thus runs 
 in direct oppofition to all that had been ex- 
 perienced from the firft introduction of the 
 funding fyftem, until the period that pro- 
 duced the profufion of paper to which I at- 
 tribute it? In the firft four years of the war, 
 the three per cents fell from 80 to 53 \, and, 
 within that period, 88,840,1201. 14s. were 
 funded. In the lafl four years, the three 
 per cents have rifen from 53 -§• to 64 § : and 
 yet, in this laft period, there have been 
 funded 168,946,920!. 17s. 3d.
 
 ( 4i ) 
 
 Here we have a^aufe which, in one pe- 
 riod of four years, produces z.faU of 26 \ per 
 cent ; and the fame caufe, only nearly doubled 
 in point of force, which, in another period 
 of four years, produces a rife of 11 per cent. 
 The only counteracting circumftance of im- 
 portance which can be mentioned, is the 
 Redemption of the Land-Tax, of which the 
 operation upon the funds, to the 5th Ja- 
 nuary 1800, has been that of taking out 
 of the market, flock to the amount of 
 
 The effect of that admirable inflitution 
 of a Sinking Fund of one per cent, of the ca- 
 pital (lock created, cannot, with propriety, 
 be dated as operating upon the funds, dur- 
 ing the laft four years, in any greater degree 
 than during the four former years, all the 
 loans railed in both periods having equally 
 the fame proportional Sinking-Fund at- 
 tached to them. 
 
 But it may be faid, that, of the fum of 
 
 168,946,920/. funded in the lad four 
 
 vears, 56,445 ; oool. are provided for out of 
 
 G the
 
 ( 42 ) 
 
 the Tax on Income, and confequently are 
 not to be confidered as an addition to the 
 permanent debt of the country.— This part 
 of the public debt is certainly didinguifhed 
 by circumftances of a very peculiar nature, 
 confidered, as they affect, the country at large; 
 but they do not, in my opinion, bear much 
 upon the queftion reflecting the price of 
 flocks; becaufe the fum of 56,445,000/. 
 (of which the intereft and final extinction 
 are to be defrayed out of a fpecific burden 
 which the country is to bear for that pur- 
 pofe,) forms, neverthelefs, a part of the ge- 
 neral capital of three per cent, flock, and 
 confequently adds to the preflure upon the 
 market as much as any other portion of that 
 flock. It feels in no greater degree than any 
 other portion of the fame flock the effect of 
 the general influence of the purchafes of 
 three per cent, flock, which the Tax on In- 
 come may fujnifh the means of making 
 after discharging the intereft andexpence of 
 management of that portion of the public 
 debt. That fuch a finking- fund would be 
 fenfibly felt, in time of profound peace, I 
 readily acknowledge; and I am equally 
 
 willing
 
 ( 43 ) 
 
 willing to admit, that its influence in fup- 
 porting the price of flocks may have been 
 important; but if that influence had only- 
 contributed effentially to prevent a farther 
 fill, I fhould confider that as fully all the 
 effect which fuch an influence could have 
 produced. But, that it fhould have had the 
 effe£t of contributing, in any very great de- 
 gree, to the rife of 1 1 per cent, in the price 
 of the whole funded property of the country, 
 in direct oppofition to the natural effect of 
 fo vafl; an increafe of that property, is, I muff, 
 fay, fo infinitely beyond the operation of 
 any caufe which exifted before the period 
 in which it took place, that we muft con- 
 clude it has been produced by a caufe 
 which never exifted in any other period. 
 But it will be laid, That the price of Stocks 
 does not neceffarily depend upon the pro- 
 portion between the quantity of them in 
 exiilence, and that of the money in circu- 
 lation, nor upon the operations of Sinking- 
 Funds of fmaller or greater extent ; but 
 that it is liable to be, and frequently is, very 
 much influenced by circumftances of a po- 
 litical nature, as well as by the greater or 
 
 fmaller
 
 ( 44 ) 
 
 fmaller portion of general confidence in the 
 good faith and profperity of the country, 
 which happens from time to time to pre- 
 vail. I readily admit the full force of the 
 obfervation ; and, if there had been any im- 
 portant change, within the laft four years, 
 in the political, financial or commercial 
 fituation of the country (except the increafe 
 of Paper-Money and its confequences) I 
 fhould readily have allowed to fuch a change 
 all the operation that could be fuppofed due 
 to it. 
 
 This is all I fhall fay on this part of the 
 fubjecl, which I feel it to be impoffible to 
 treat, as it deferves to be treated, without 
 departing from that line of enquiry which 
 I propofed to purfue in this addrefs. 
 
 I have endeavoured to (hew that the fyf- 
 tem of Paper-Money, not convertible into 
 fpecie, at pleafure, tends to diminish the va- 
 lue of the annuities which the country 
 grants in borrowing. It may not be amifs 
 now to confider briefly the influence of the 
 fame fyftem on the interefl which the 
 £ country
 
 ( 45 ) 
 
 country has bound itfelf to pay to its credi- 
 tors, on the whole public debt. This is the 
 point of view, of all others the molt inte- 
 refting to a country, fo long diftinguifhed 
 \>y its high fenfe of honour in all its en- 
 gagements with its creditors. If we con- 
 template the probable future depreciation of 
 paper as it may arTecl the creditors of the 
 flate, we are well warranted to conclude, 
 that the profufion of paper, which has blown 
 up the nominal value of the capital of the 
 public debt, is fraught with the feeds of the 
 deftruclion of real public credit. This depre- 
 ciation of paper the creditors of the public 
 now feel, perhaps even without fufpecling 
 its exiftence, in common with every other 
 clafs of people; but when it becomes more 
 palpable (as it infallibly muft, if the prefent 
 fyftem is perfevered in), the odium which 
 it mud entail upon the country, (landing, 
 in this refpect, in the character of a debtor, 
 paying a real debt with a nominally equal, 
 but really inferior value, is rather to be de- 
 precated than defcribed. Iffuch a period 
 fhould arrive, the public creditors will be 
 juftly entitled to charge their debtor with 
 
 having
 
 ( 4S ) 
 
 having" kept his promife to their ear, and 
 broke it to their hope' 9 If a period mould 
 arrive when a dividend of 100/, in Bank- 
 notes will not exchange for more of the 
 conveniences of life than 50/. did a few 
 years ago, will not the perfon receiving 
 fucfr dividend, be entitled to charge this 
 country with having failed in its engage- 
 ments as effecluallv, as if an Acl of Parlia- 
 ment had ordered a guinea to pafs for two- 
 and-forty millings ? Is your mind made up 
 to receive fuch a reproach ? Have you efti- 
 mated the extent of its confequences ? Can 
 you look forward, with indifference, to 
 the foffibility, nay to the probability, of its 
 being, one day, directed againfi: your Admi- 
 niftration ? I truft you cannot. I gladly 
 cherifh the hope that you will not (hut your 
 ears to the voice of truth, although it pro- 
 ceed from a quarter, neither diflinguifhed 
 by favour nor fortune; but that, foured 
 from the fafcination of a paper- fyftem, you 
 will, while it is yet in your power, make 
 one great effort to refcue the country from 
 an impending calamity, not the lefs dan- 
 gerous for being little fufpecled. 
 
 is
 
 ( 47 
 
 N 
 
 It may be faid, that the circulation of the 
 notes of the Bank of England is not en- 
 forced by law, but refls entirely upon confi- 
 dence. This is a refinement which, upon 
 examination, will be found not to poflefs 
 much folidity. The Bank of England is 
 authorifed by law to refufe the payment in 
 fpecieofthe molt important defcription of 
 its notes. The public had been accuftom- 
 ed, for upwards of a century, to receive 
 thefe notes in all payments ; and, not ef- 
 timating, as it deferved, the important 
 change which the Legiflature introduced, 
 when it permitted the Bank to ijfue, and not 
 to pay, their notes, the fame public readily 
 took thefe notes, when deftitute of the qua- 
 lity which originally gave, and ultimately 
 mud fupport, their value, with the fame 
 confidence, as when they poflefled that 
 quality. But there was little choice left to 
 the public, even if there had been (as, I 
 believe, there was not) any latent principle 
 ofdiftrult. The paper of the Bank of Eng- 
 land formed the principal means of circu- 
 lation in the metropolis. That paper, when 
 deprived of the original condition of its 
 
 circulation
 
 ( 48 ) 
 
 circulation, received from Parliament a 
 fan&ion, much ftronger than it ever en- 
 joyed when that condition was inviolate. 
 The whole revenue of the (late was receiv- 
 able in it. The annuities on the public debt 
 were paid in it. The oppofition of indivi- 
 duals to a fyftem, fo powerfully protected, 
 would have been nugatory; but the efifecls 
 of that fyitem are nearly the fame as thofe 
 which would have refulted to the commu- 
 nity at large, from a plain and pofitive law, 
 obliging all perfons to receive Bank-notes 
 as cam. The true tell by which to try the 
 truth of the adertion, That the circulation 
 of Bank-notes is free, not forced, would be 
 to withdraw the authority under which the 
 Bank refufes to pay them in fpecie. If, in 
 that cafe, public confidence continued to 
 repofe as fecurely as it is now fuppofed to 
 do, then indeed might their circulation be 
 juftly faid to reft on confidence ; but the very 
 circumilance of continuing the power of 
 refufing the payment proves inconteftably 
 that authority or necejfuy, not pure, un- 
 mixed confidence, forms the balis of the cir- 
 culation of Bank-notes, in their prefent 
 
 ftate.
 
 ( 49 ) 
 
 flate. But fome of the ardent friends of 
 the prefent fyftem fcruple not to affert 
 that the Bank has never, for a moment, loft 
 fight of thofe rules of conduct, during the 
 fufpenfion of iffues of fpecie, by which they 
 were regulated, in their profperous days, 
 before that fufpenfion took place. If this 
 be true, it affords the ftrongeft poflible rea- 
 fon for abandoning a reftriclion which, in this 
 cafe, muft not only be altogether unnecef- 
 fary, but, to give it no hardier epithet, is cer- 
 tainly derogatory to the dignity of the Bank. 
 But while this reftri&ion continues ; while 
 the circulating money of the country confifls 
 of paper, not unconditionally converti- 
 ble into fpecie, and of which the iffues 
 are under no other controul than that of 
 the corporation whofe profits depend upon 
 them, it is impoffible to ftifle the fufpicion, 
 that thefe iffues may have been extended 
 much beyond the limits by which they 
 would have been bounded, had the Bank 
 continued to be fubjecled to the falutary ob- 
 ligation of paying it's notes on demand. 
 While this falutary obligation exifled, every 
 Bank-note was a true and faithful reprefen- 
 H tative
 
 C 50 ) 
 
 tative of Gold and filver 5 and, while it 
 preferved this legitimate title of confidence, 
 the public had no right to enquire into the 
 extent of the circulation of Bank-notes ; 
 but the cafe is widely different indeed, when 
 that legitimate title to confidence is fuf- 
 pended, and when an unprecedented rife in 
 the prices of all the neceflaries and conve- 
 niences of life, as well as of every fpecies 
 of exchangeable value, indicates fome great 
 and general principle as the caufe of fuch a 
 revolution. Can you, Sir, or any man, af- 
 fign any caufe fufEciently general in its ef- 
 fects and powerful in its operation, to ac- 
 count for a change fo general in the prices 
 of all, or very nearly all, articles of necef- 
 fity, convenience and luxury, as well as of 
 every fpecies of property or exchangeable 
 value, within fo fhort a fpace of time, ex- 
 cept the one to which I attribute it ? I by 
 no means pretend that the high price of 
 grain (which the general voice feems to at- 
 tribute to the effect of an unfavourable fea- 
 fon) is fclely occafioned by the general caufe 
 of e.vcefs of paper circulation, not founded, 
 as all paper circulation ought to be, in the 
 P precious
 
 ( 5i ) 
 
 precious metals. I only contend that, if 
 there be (as is alledged) a real fear city of 
 grain, the effe6ta of this fcarcity mud be 
 very much increafed by the general caufi 
 which I conceive to have produced the ge- 
 neral rife of the price of every thing. 
 Your mind muft look down, with fcorn, 
 upon the ftale and inadequate caufes of the 
 high price of provifions which have been 
 alfigned for it by fome men, more diftin- 
 guifhed by their flation than by their ac- 
 quirements. You well know that partial 
 caufes never can produce general effecls. 
 You cannot fail to have fought for a great 
 and general caufe for the folution of the 
 phenomenon which excites the general 
 wonder. That phenomenon, I again affert, 
 in all probability, arifes from an increafe of 
 the reprefentative figns of money, totally 
 difproportioncd to the time in which it has 
 been effected, and to any progrefs which 
 the induftry of the country can pofhbly have 
 made, within that time : and fuch an in- 
 creafe never could have exifled, but for the 
 ram attempt to extend the empire of credit 
 
 bevond
 
 ( 52 ) 
 
 beyond thofe limits which the eternal laws 
 of nature had marked out for it. 
 
 A great rife has taken place in the price 
 of every fpecies of exchangeable value durr 
 ing the fhort period of two years. The 
 public mind is on the rack to difcover the 
 caufe of this rife, of which the moft alarm- 
 ing effects are manifefled in the great ar- 
 ticle of bread. One fays, that there is a 
 real fear city of grain, owing to an uncom- 
 monly bad feafon, lafl year, and a fcanty 
 crop, this year. How this knowledge was 
 acquired, I am utterly ignorant ; but as it 
 comes from a noble Duke, high in the ad- 
 miniflration of the internal affairs of this 
 country, it is to be prefumed that it was 
 not promulgated on flight or doubtful 
 grounds. This, however, I mull be per- 
 mitted to fay, that if there did exifl: fuffi- 
 cient reafon to believe the fcarcity to be 
 real, the influence of that caufe cannot have 
 loft any of its force by the extraordinary 
 publicity given to it. 
 
 Another
 
 ( 53 ) 
 
 Another fays, There is no fcarclty ; but 
 a fet of foreftallers and regraters have mo-? 
 nopolized the grain of the country, and fell 
 it out at fuch prices as they think proper to 
 fix, from time to time. He invokes the 
 feverity of the laws againft thofe offenders, 
 with all the illiberal virulence of the dark 
 age which called fuch imaginary offenders 
 into exiftence. He deplores the repeal of 
 the good old code which delivered over 
 fuch offenders to the wholefome chaftife- 
 ment of penal flatutes, and feeks, in the 
 common law of the land, for the means of 
 refloring the fpirit of thofe flatutes whic h 
 fo long difgraced the jurifprudence of Eng- 
 land. The age we live in is, fortunately, 
 too enlightened, for fuch exploded notions 
 to gain much ground ; but as they have 
 the pafhons and prejudices of the lower or- 
 ders of the community flrongly on their 
 fide, they mud, particularly when fanc- 
 tioned by flation and fortune, tend greatly 
 to increafe the evil of fcarcity and of dearth, 
 as well as to excite a fpirit of fedition of the 
 mofl dangerous tendency, in the people. 
 While I thus avow my (I If the irreconcil- 
 able
 
 ( 54 ) 
 
 able enemy of all fuch public ceconomy as 
 profeffes to produce plenty, by means which 
 lead directly to want, I am not the Iefs per- 
 fuaded that exceflive circulation of paper 
 mud give rife to much fpeculation in grain 
 as well as in every other article: But to 
 attempt to check Speculation by punifhing 
 Speculators, is, of all the crude and imprac- 
 ticable fancies that ever was formed, the 
 mofthopelefs and unprofitable. To draw the 
 line between fair and honourable mercantile 
 purfuits, and that illiberal and extorfive 
 conduct which is too often practifed under 
 their name, requires a hand of fuch infinite 
 delicacy, a touch of fuch exquifue nicety, 
 as cannot fairly be ex peeled in the ordinary 
 practice of any Court of Law. In the fame 
 profcription which might be honeflly in- 
 tended for the ungenerous and unworthy 
 advantages which individuals may, and do, 
 take, of the general diftrefs, in all probabi- 
 lity would be involved, the fair, honourable, 
 praife- worthy purfuits of thofe who, while 
 they are promoting their own intereft, ac- 
 tually adminifter to all the effential comforts 
 of the community. To punifh Speculators 
 
 then*
 
 f 55 ) 
 
 then, I confider altogether a vain and fruit- 
 lefs attempt. It mufl tend to check the efforts 
 of enterprize and induftry, which is cer- 
 tainly not the intention even of thofe who 
 join mod loudly in the cry againft foreftal- 
 lers and regraters — Their object is to puniftt 
 improper /peculation ; but they do not confi- 
 der, that any Law which human wifdom 
 can devife to rep re fs the one, may, nay mull, 
 be, in a great degree, deftru&ive of the 
 other. But although I am of opinion that 
 Law neither can, nor ought to Attempt to, 
 regulate fpeculation, I know and believe that 
 it is perfectly within the province of the 
 Legiflator to with-hold all improper fup- 
 port to fpeculation of any kind ; and there- 
 fore that it is the duty of Parliament no lon- 
 ger to authorife even the poflibility of an 
 extenfion of the means of circulation be- 
 yond thofe limits which the experience of a 
 century (in perfect unifon with the pureft 
 theory, as well as with every principle of 
 good faith and common fenfe) had fanclion- 
 ed with its approbation. The paper circu- 
 lation of the country never was, nor could 
 be, dangerous from the f peculations it gave 
 
 rife
 
 ( 5$ ) 
 
 rife to, as long as the great primary wheels 
 which fet it in motion, turned upon an axis 
 of Gold and Silver, becaufe the obligation 
 to maintain that axis in a proper ftate of 
 flrength, formed a falutary and effectual 
 check upon any excefs in the circulation it 
 had to fupport. .To interfere in the exer- 
 cife of the rights which the Bank of Eng- 
 land, or the London Bankers, or the Coun- 
 try Banks, or the Farmers, or the Corn- 
 Dealers, or any other clafs of Traders 
 juftly pofleYs over their own credit and 
 induftry, would be impolitic, unjuft, and 
 unavailing ; but to reftore the currency of 
 the country to its priftine purity, to confine 
 it within thofe limits which good faith and 
 good fenfe equally point out for it, is not 
 only proper and practicable, but indifpen- 
 fably neceffary, in order to prevent the 
 numberlefs calamities which the uncon* 
 trouled circulation of paper not convertible 
 into fpecie, muft infallibly produce. To 
 bring back the circulation of Bank-notes to 
 the original condition of their circulation, 
 is merely to correct: an abufe which never 
 ought to have exifted. This would not 
 
 be
 
 r 57 > 
 
 be a novelty. The prefent fyftem is a no- 
 velty, and one of the mofl dangerous ten- 
 dency *. 
 
 The opinion of a third perfon is, That the 
 fcarcity and high price of Bread- corn pro- 
 
 * If I believed (as fome people do) that the refumption 
 of payments in fpecie at the Bank of England would 
 embarrafs Administration, I (hould not contend for 
 that refumption. To recommend any tneafure which 
 might have the effect of weakening the efforts of this 
 country in the ftruggle it has to maintain, as long as fuch 
 ftruggle is judged neceflary, (whatever opinion I may 
 individually entertain of the means of fuflaining, or of the 
 duration of, that ftruggle) would be altogether inconfift- 
 ent with the ideas of public fpiiit which I have ever 
 held. It is becaufe I feel the mod complete conviction, 
 that the real refources of this country are now, and al- 
 ways have been, too folid and extenfive to require the aid 
 of forced paper-money, that dangerous quack-medicine, 
 which far from reftoring vigour, gives only temporary 
 artificial health, while it fecretly undermines the vital 
 powers of the country that has recourfe to it.— It is be- 
 caufe I am intimately convinced that the refumption of 
 payments in fpecie at the Bank, by the manner of carry- 
 ing it into effeel, may be rendered perfectly confident 
 with the trueft interefts of Government, of the Brink 
 itfelf, and of the public at large, that I thus prefs the 
 ncceffity oFthat refumption. 
 
 I ceed
 
 ( 58 ) 
 
 ceed from a great addition made to the po^ 
 pulation of the country. How fuch a caufe 
 fhould fo fuddenly produce an effect of fuch 
 magnitude, does, I own, exceed my com- 
 prehenfion. At what period the feeds of 
 this extraordinary increafe were fown, I 
 cannot even guefs ; but it is neceffary ta 
 fuppofe that there mufl have been fome one 
 or two years of uncommon fecundity, in 
 order to account for the extraordinary addi- 
 tion to our population which, in this parti- 
 cular year, has fo greatly enhanced the 
 price of corn. The progrefs of population, 
 like the growth of the individual, is fo gra- 
 dual and imperceptible as to efcapethe no- 
 tice of the mod vigilant obferver, otherwife 
 than in its effects ; and as in the growth 
 of an individual, it can never happen to any 
 parent to be furprized with a child of two 
 years old all at once flarting into the di- 
 menfions of one of twelve, fo, in my humble 
 opinion, it is not probable that it fhould 
 happen to any ccuntry to find its population 
 had, in one or two years, made fuch aa ex- 
 traordinary fhoot as only could have been 
 expected in half a century ; and yet fuch a 
 5 fhoot
 
 ( 59 ) 
 
 {hoot it muft have made, if anincreafed po- 
 pulation be admitted as the caufe of the very 
 high price of provifions in this particular 
 year. 
 
 By a fourth, the high price of provifions 
 is placed to the account of the war. This 
 is a good general head for carrying all doubt- 
 ful points to, all unappropriated difafters, all 
 flray calamities, and incidental difappoint- 
 ments of every defcription. I fh all not touch 
 upon this extenfive fubject further than to 
 fay, that I fee nothing in the mode of con- 
 ducing this war, during the laft two or 
 three years, which ought to occafion any 
 refult affecting provifions different from 
 what almoft all other wars, and this very 
 war, during the firft four years of its dura- 
 tion have generally produced. Whether 
 the mode by which the means of carrying 
 on the war have been raifed, have or have not 
 contributed to the high price of corn as well 
 as of every other neceffary of life is quite 
 another confideration, and belongs to the 
 general object of this enquiry, which is to 
 cqnfider the influence of the prefent paper- 
 currency
 
 ( 6o ) 
 
 currency on the prices of commodities in 
 general. It is fufficient, for the prefent 
 purpofe of eftimating the credit due to the 
 afTertion, that the high price of grain is oc- 
 cafioned by the war, to fay, that no fuch 
 conclufion is warranted by what has hap- 
 pened in other wars. 
 
 It has been referved for me to affign, as 
 the caufe of the general rife, which almoft 
 all things have experienced, within the laft 
 two or three years (and which grain, as the 
 article that comes mod frequently in con- 
 tact with money, feels the fooneft and the 
 mo ft) the exiftence of a great Bank, in veiled 
 with the power of ifluing paper, profefling 
 to be payable on demand, but which, in 
 facl, the Bank which iflues it, is not obliged 
 to pay. 
 
 Now, Sir, let it be fuppofed, for a mo- 
 ment that the celebrated author of the En- 
 quiry into the Caufes of the Wealth of Na- 
 tions were alive, and that his opinion were 
 afked with regard to the caufe of this revolu- 
 tion in prices j Let it be fuppofed, likewife, 
 
 that
 
 ( 61 ) 
 
 that he had been truly informed ofevery thing 
 of importance that had happened, during 
 the laft four years of the Loans that had been 
 raifed, the Taxes that had been laid, the 
 Land-tax that had been redeemed, the In* 
 ereafe of Exports and Imports that had 
 taken place, and, above all, the fyftem of 
 Finance which had been eftablifhed, by way 
 of throwing upon the prefent generation 
 a great (hare of the burden which formerly 
 ufed to be entailed upon pofterity ; but that 
 the circumftances of the ftoppage of pay- 
 ments in fpecie at the Bank, and the confe- 
 quent power o'iijfuing^ without being oblig- 
 ed topay, Bank-notes, had been carefully 
 kept from his knowledge. What would the 
 opinion of that great man be, refpecting 
 the four firft great afiigned caufes of the 
 high price of grain, and of their effecl on 
 the general rife of the prices of all other ob- 
 jects of exchangeable value ? May it not be 
 prefumed that he would fay, That a fcarcity 
 of grain produced by a bad feafon is an ob- 
 vious and a natural caufe of the increafe in 
 the price of that article ; but that the occa- 
 sional high price of grain does not necefla- 
 
 rily
 
 f 62 ) 
 
 rily produce an advance in the price of all 
 other commodities. In proof of this, he 
 would refer you to the prices of Grain of 
 the years 1795 and 1796, which, on an 
 average will I believe, be found not much 
 lower than thofe of 1799 and 1800;* a,U 
 though they were not accompanied with 
 the general rife of all other commodities 
 and objects of exchangeable value, which 
 diftinguifhes thefe laft two years. I need 
 not fay, what every line of his valuable 
 work tends to mow, That he would depre- 
 cate all interference on the part of Govern- 
 ment, (whether directly, in the form of 
 prohibition and reftraint, or indirectly, 
 through the channel of Courts of Law) 
 with the free exercife of the induftry of 
 every man, in his own way, and that he 
 would treat with contempt the juftly ex- 
 ploded doctrine of the confequences of Fore- 
 flailing and Regrating. 
 
 May it not be fuppofed, farther, that he 
 would fay, That any effect from an encreafed 
 population muft, like the caufe which pro- 
 * See Appendix, A. 
 
 duced
 
 ( 63 ) 
 
 duced it, be gradual; and that no fuch ef- 
 fect could be fo fenfibly felt in the fhort 
 fpace of one or two years ? 
 
 He certainly would not admit that the 
 war, though it neceffarily muft tend to the 
 wafte of many articles of provifion, and in- 
 volve the country in great expence, had 
 produced an effecl: on the prices of commo- 
 dities, which no former war, or even a for- 
 mer period of the prefent war, had ever 
 produced. He would find none of the af- 
 figned caufes, which are partial, equal to 
 the effects, which are general. He would 
 naturally proceed to enquire, Whether 
 fome important caufe might not have di- 
 minifhed the value of Gold and Silver. He 
 would begin to fufpect fome aftoniftiing 
 increafe of the quantity of thofe metals, or 
 of their powers. But, although he might 
 confider fuch an increafe perfectly practi- 
 cable in a period of twenty or thirty years, 
 he would know that no fuch immenfe in- 
 creafe could take place in the fhort fpace of 
 three or four years, either of the metals 
 themfelves, or of their powers, by the cir- 
 culation
 
 ( 64 ) 
 
 culation of paper payable in thofe metals* 
 on demand, the only fpecies of circulation 
 which he did or could recommend. At 
 this period of his enquiry, let it be fuppofed 
 that he is informed of the ftoppage of the 
 iflue of fpecie at the Bank of England, fince 
 the 26th of February 1797, and of the per- 
 miflion which the Bank has fince enjoyed, 
 of iffuing,^ libitum, without being bound 
 to pay, its notes, profefiing to be payable, 
 on demand* 
 
 Would he not fay that this caufe is, of 
 itfelf, adequate to all the extraordinary rife 
 which had taken place ? Here, he would 
 obferve, that " Circulation is not only car- 
 ried on by a new wheel," but that the 
 wheel is altogether of a different fort of 
 materials from thofe of which fuch wheels 
 ufedto be made. He would fay, that not 
 only the currency of the country had been 
 Ranged from a certain to an uncertain 
 llandard, but that the quantity of it, in all 
 probability, had been greatly augmented by 
 the ifluing of paper, without the obligation 
 of paying it on demand ; and that thus the 
 
 prices
 
 ( 65 ) 
 prices of all objects of exchangeable value 
 necefTarily feel the influence of a pofidvc 
 degradation of the Jlandard, and of a proba- 
 ble augmentation of the quantify of money 
 in the country, any one of them amply fuf- 
 ficient to account for a confiderable rife, 
 but both united, adequate to ftiil greater 
 effects than any that had already been pro- 
 duced. He would recommend to thofe 
 who are entrufted with the great interefts 
 of the country, to examine, without delay, 
 whether or not the Directors of the Bank 
 of England had yielded to the almoiiirre- 
 fiftible temptation to which they had been 
 expofed ; for he would confider, that, in 
 all probability, thofe Gentlemen, far from 
 thinking it their duty to withhold the ad- 
 vances folicited from them, may have 
 thought they were rendering a meritorious 
 fervice to the country, by lending liber ally ^ 
 on good fecurity, the paper-money which 
 Parliament had inverted them with the 
 power of coining. 
 
 How indeed fliould the Bank-Dire&ors 
 
 ever have fuppofed they were doing mif- 
 
 K chief,
 
 ( 66 ) 
 
 chief, by fupplying amply with their notes 
 the various channels of circulation (in the 
 form of advances on loans, anticipations of 
 the revenue, difcounts to merchants, and 
 all the endlefs variety of ways through 
 which their paper comes into general ufe), 
 when the executive Government of the 
 country has, within thefe eight months, 
 actually bargained with them for the loan 
 of three millions of that paper-money, as if 
 they had been three millions of coin, or of 
 notes payable in coin, on demand, and that 
 Parliament has, in conlideration of the loan 
 of that paper-money, for fix years, without 
 intereft, prolonged the exclufive charter of 
 the Bank of England for 21 years after the 
 expiration of its prefent charter? With the 
 impreflion upon their minds, that every 
 frefh addition to their circulating paper was 
 a new fervice rendered to their country, and 
 with the flill more powerful and certain 
 conviction that it was, at the fame time, an 
 addition to the fources of profit to theBank ; 
 to fuppofe they would be reftrained by the 
 fufpicion that they were doing mifchief, 
 when thus promoting what they may have 
 7 con-
 
 ( 6? J 
 
 confidered both as a public and a private ad- 
 vantage, would be to expect from them a 
 line of conduct utterly incompatible with 
 the ideas which led to the fyftem of ifTuing 
 paper not payable on demand. If they 
 had juftly eftimated the tendency offuch a 
 fyftem ; if they had thought, as it became 
 the acting guardians of public credit to 
 think, on that fubje£t,, they would have 
 fpurned the boon which they accepted ; they 
 would have remonflrated agaiuft the idea of 
 a parliamentary prohibition to hTue fpecie 
 in payment of their notes, as a meafure big 
 with the principles of danger and ruin, in- 
 ftead offheltering themfelves under it, as 
 they have done, for upwards of three years. 
 By accepting the indulgence which that 
 prohibition gave them, they afforded an in- 
 fallible ftandard for afcertaining the depth 
 of their conceptions. 
 
 From the firft dawn of the idea of fuf- 
 pending the payment of their notes, as a 
 matter of fuppofed neceflity, to the mer- 
 dian blaze of wifdom which difcovered in 
 that fufpenfion, a mine of wealth for the 
 
 Bank
 
 ( 68 ) 
 
 Bank and the country, the tranfition was 
 natural and the interval, which divided 
 them, fmall. Are you, Sir, quite fure that 
 this idea was excluiively theirs f Did you 
 not, on the contrary, in February 1797, 
 when all your care, as a Statefman, ought 
 to have been to prevent any violation of 
 public faith, admit the dangerous and delu- 
 five idea that the paper of the Bank of Eng- 
 land, if once unfettered by the condition of 
 being payable on demand, would amply fup- 
 ply the deficiency of currency,then fo loudly 
 complained of, and furnifh fuch abundance 
 of the means of circulation as would facili- 
 tate loans and anticipations of the public 
 revenue, give new life to trade and manu- 
 factures, and, above all, tend to raife the 
 price of funded property, and, as a neceflary 
 confequence, infure to your Adminiftration 
 the conftant fupport and unbounded devo- 
 tion of the Monied interefl: ? For the real 
 credit and honour of that Adminftration 
 ( to which I have never ceafed to be a friend, 
 althoughl have often had occalion to lament, 
 and, in lbme in fiances, been the victim of, 
 
 its
 
 ( 6 9 ) 
 
 its errors) I wifti you could anfwcr in the 
 negative. 
 
 When I call to mind the conduct purfued 
 by the Bank of England, for a confiderable 
 time previous to the fufpenfion of the pay- 
 ment of its notes, there appear in it many 
 circumitances which almoft warrant the 
 fufpicion that, inftead of really dreading that 
 fufpenfion as an evil, they rather looked to 
 it as an advantage. At what particular pe- 
 riod the idea of turning this real calamity 
 into an imaginary benefit, was firft con- 
 ceived it is impoflible to afcertain ; but it 
 feems natural enough to conclude, that it 
 muft have fpeedily followed that of the fup- 
 pofed necelfity of fufpending the payment 
 of Bank notes. If this be true, it will ac- 
 count for that line of conduct which the 
 Bank purfued for many months previous to 
 the 26th of February 1797. For, if it had 
 been really in contemplation to reduce the 
 means of circulation to that extreme fear- 
 city which might prepare the public mind 
 for the introduction of any fyftem, however 
 exceptionable, that fhould promife relief, 
 
 the
 
 ( 70 ) 
 
 the Bank of England could not have acted 
 more confidently than they did, in order to 
 produce fuch an effect.* Be this as it may, 
 I am well warranted to maintain that, un- 
 lets the ftoppage of the iflues of fpecie at 
 the Bank had been confidered as a fource of 
 future facility and advantage (whether the 
 idea originated with the Directors, or with 
 you) not only the Bankwould havepurfued 
 a different line of conduct before that event, 
 but the whole of the meafures which fol- 
 lowed would have had a different tendency 
 from that which they evidently had. In- 
 flead of endeavouring to repair the edifice 
 of public credit, thus fhaken in its principal 
 pillar ; inftead of accelerating, by every 
 pofTible exertion, the refumption of the un- 
 conditional payment of its notes, the great 
 object which engrofTed the attention of the 
 Bank appears to have been, to accuftom the 
 public to the more convenient doctrine of 
 fuch payment being altogether unn«cef- 
 ary. + 
 
 * See Appendix B. 
 
 t Was the rife of the exchange with Hamburgh 
 from 36 to 38 : 5, *hich took place in the laft ten 
 
 months
 
 ( 7i ) 
 In anfwer to all this reafoning, it may be 
 faid, that the cenfures I now beftow fo freely 
 upon a great public meafure,taken upwards 
 of three years ago, are mere ex pojlfatlo ob- 
 fervations, and that they are, therefore, lefs 
 entitled to attention than they would have 
 been if they had been urged at the time it 
 was taken. To this I would reply, that, 
 in fo far as an individual (whofe opinion on 
 matters of Finance had, in more countries 
 than one, been confidered of fome weight^ 
 could interfere in a meafure of this fort, I 
 did at the time teftify, in the moft une- 
 quivocal manner,my decided difapprobation 
 of the meafure. On the 26th of February 
 1797 (the very day on which the Order of 
 Council for fufpending the payments in 
 fpecie at the Bank, was iffued, and while I 
 was altogether ignorant that any ftep had 
 actually been takenj I learned, that it was 
 
 months of 1797 (and which certainly was not effected 
 without the knowledge and co-operation of the Bank) 
 intended to (hew ho.v much better every thing went 
 on under the fyflcm of Reflriclion than under that of 
 Freedom; the device was not without ingenuity. It 
 is only to be regretted that it had not reftcd on a better 
 foundation.
 
 ( 72 ) 
 
 in contemplation to refort to fome extraor- 
 dinary meafure or other in order to put an 
 end to the run upon the Bank. Ignorant 
 of the nature of the meafure propofed, but 
 apprehenfive left it mould, in any degree, 
 tend to the eflablifhing of a paper-currency, 
 not conftantly convertible into cam, I wrote 
 a letter, defcribing in the ftrongeft lan- 
 guage, the apprehenfions I entertained, and 
 painting, with all the force I could give to 
 words the fatal tendency of any meafure of 
 that kind. *This letter I addreffed toafriend, 
 who had, on many occafions, conveyed my 
 ideas to you, and improved them with his 
 own ; entreating that he would not only 
 Ihew you my letter, but fupport the doctrine 
 it contained, with all that fuperiority of un- 
 derftanding for which you yourfelf, in com- 
 mon with the reft of the world, knew him 
 to be diftinguiftied. This friend did accord- 
 ingly call upon you early the next day ; 
 but, not finding you at home, he carried 
 my letter to a friend of your's, defervedly 
 high in the eftimation of his country, and to 
 whom as the official organ of the Houfe of 
 
 * See Appendix C. 
 
 Commons,
 
 f 
 
 73 ) 
 
 Commons, the fubjecl: of it could not be un- 
 interefting. What his obfervations were, 
 upon the perufal of it, I (hall not now men- 
 tion. Whatever they were, they came too 
 late ;' for the Order of Council w r as then in 
 general circulation. Why I did not, on any 
 future occafion, take any public opportunity 
 of manifefting my opinion, you can be at no 
 lofs to difcover, when y,ou recoiled the cruel 
 eircumftances in which I was then placed, 
 and thofe, flill more dreadful, which have 
 fince occurred to annihilate my commercial 
 exiftence in this country*. The do&rine 
 which I now hold I have always held ; in 
 my greateft profperity, as in the adverfity 
 which now overwhelms me ; and it is no 
 flight proof of the purity and folidity of the 
 principles which any man profeffes, that 
 the greateft poflible change of fortune makes 
 none in thofe principles. 
 
 * If this were the place to treat of any thing perfonal 
 to myfelf, it would not be a difficult tafk to fhow how 
 much the misfortunes, which have befallen me in this 
 country, have been connected with the great interefts 
 of the public. 
 
 L But
 
 ( 74 ) 
 
 But it will perhaps be faid, that the refult 
 of the labours of the Committees of both 
 Houfes of Parliament, was a general con- 
 viction, that the Trade and Finances of the 
 Country required a more extended circula- 
 tion than that to which the miflaken con- 
 duel of the Bank had reduced it ; and that 
 there was no better mode of obtaining that 
 extended circulation, than by exempting the 
 Bank from the condition of paying, on de- 
 mand, the notes they might iflue. Was 
 this doclrine worthy of a great and enlight- 
 ened country ? Was it worthy of a Minifter 
 who had flaked his fame upon his jufl con- 
 ceptions of public faith, and public profpe- 
 rity ? Were there, indeed, no other means 
 of extending the circulation of the country 
 than by the ra(h and fatal refolution of au- 
 thorizing a paper-currency not convertible 
 into f'pecie? Was not this cutting, infteadof 
 un-tying the Gordian knot of the then ex- 
 ifling difficulties ? Innovation has been the 
 great danger againft which your adminiftra- 
 tion has laboured, and in many refpecls 
 with fuccefs, to defend this country. But 
 
 is
 
 ( 75 ) 
 
 is there, in the annals of hiflory, any inno- 
 vation more remarkable or more dangerous 
 than this was ? Can any two things be more 
 effentially different than the circulation of 
 paper, conllantly convertibleintofpecie, and 
 that of paper, fo convertible, only at the 
 pleafure of the Corporation which iffues it ? 
 — But, it will be afked, How could the cir- 
 culation of the country be fupported at all, 
 after the extremity to which matters had 
 been brought, on the 26th February 1797, 
 othcrwife than by the floppage of iffues in 
 fpecie ? To this I anfwer boldly, By the 
 operation o f well founded confidence alone 
 upon the public mind, ofVfhich fo unequi- 
 vocal a proof was given by the Meeting at 
 the Manfion Houfe which immediately fol- 
 lowed the ftoppage; by purfuing the fame 
 meafures, under a fyftem of uninterrupted 
 iffues of fpecie, which it is probable the 
 Bank *?ally did puriue, under that of re- 
 straint, for a confiderable time after the ftop- 
 page took place ; by treading back thofe 
 lteps, which, from December 1795 to ^ e " 
 bruary 1797, had led to the very difcredit 
 
 that
 
 ( 76 ) 
 
 that occafioned the ftoppage.* By purfuing 
 this line of conduct the palfied circulation 
 of the metropolis would, in a very fhort 
 time, have recovered that activity and vi- 
 gour of which it had been deprived by the 
 itarving fyftem practiced for upwards of 
 fourteen months; and if it had regained 
 only what it had thus been deprived of, in 
 all probability it would have maintained 
 that eafe and plenty of currency which ex- 
 ifled before that ftarving fyftem was intro- 
 duced. It might indeed have been inade- 
 quate to the purpofes of buoying up the 
 funds, in oppofition to the natural effecl of 
 an immenfe increafe of debt, and of admini- 
 flering to the various fchemes of fpeculation 
 to which an excefs of currency naturally 
 gives birth; but, in all probability, it would 
 
 * See the evidence of Henry Thornton, Efq. and 
 mine before the Committee of the Lords on the caufes 
 which led to the Order of Council of the 26th of Febru- 
 ary, 1797. The remarkable coincidence between the 
 opinions of two perfons, who were not then even known 
 to each other, on a fubjecT; fo abllrael in its nature, ftruck 
 many of the friends of both parties. 
 
 have
 
 ( 77 ) 
 
 have been found perfectly fufficient for all 
 thefober purpofes of rational enterprize and 
 well-directed induftry. 
 
 When I obferved that our eKehansres 
 with foreign countries, inflead of falling in 
 value, upon the floppage of the iffues in 
 fpecie (as might naturally have been ex- 
 pected), rofi greatly above their natural le- 
 vel with thofe of other countries, I con- 
 cluded that this was the falutary confe- 
 quence of the circulating medium of the 
 country (although no longer poffeMing its 
 original purity) being reftored to that abun- 
 dance from which it had been mod unna- 
 turally and improperly reduced, and I gladly 
 indulged the hope that as long as the circu- 
 lation mould not much exceed the limits it 
 had retained, in December 1795, the incon- 
 veniences arifing from fo radical a change 
 in its compqfition, might, in a great degree, 
 be obviated. 
 
 I rejoiced to fee the great principle of 
 Gravitation (which gives to forced paper its 
 tendency to depreciation, as to the flone in 
 
 the
 
 ( 78 ) 
 
 the air, its tendency to fall) fufpended, as it 
 were, in favour of this Country ; but I well 
 knew that the principle itfelf could not be 
 dejlroyed. In all the various flages of im- 
 provement, which the financial fituation of 
 the country has appeared to experience (and 
 great and flattering indeed they have been), 
 I have found it impoffible to check the rif- 
 ings of diffatisfaclion and diftruft in my mind. 
 When I faw the value of the founded pro- 
 perty of the country rife full ten per cent, 
 at the end of feven years of war ; when I 
 faw the heaviefl taxes, that had ever been 
 levied upon the fubjecl, paid, if not without 
 a murmur, at lead without much apparent 
 difficulty dr reluclance ; when I faw the 
 amount of our exports and imports increafe 
 beyond all former example, I rejoiced moll 
 cordially in all thefe fymptoms of national 
 profperity; but when I remembered that 
 the Bank of England did not pay its notes 
 on demand, I trembled for the fafety of the 
 edifice on which that profperity relied.* 
 
 * See Appendix D. 
 
 I have
 
 ( 79 ) 
 
 I have thus difchar^ert what I felt to be 
 a duty I owed to my country, by calling 
 your attention, as the confidential fervant of 
 your Sovereign, more efpecially charged 
 with the care of every thing that concerns 
 the profperity and happinefs of his people, 
 to what I conceive to be an evil of no ordi- 
 nary magnitude. I am aware that there 
 are, in my perfonal fituation, circumftances 
 which, while they are unfavourable, in the 
 extreme, to the confideration of any fubjetr. 
 of a public nature, and particularly of one 
 fo important and intricate as that on which 
 I have ventured to addrefs you, tend, at the 
 fame time, to diminifh much of the force 
 which the fame obfervations would poiTefs, 
 if coming from any perfon not fo fituated. 
 But, on the other hand, I have the confo- 
 lation, peculiar to the very circumftances 
 in which I am placed, of knowing that no 
 opinions or arguments of mine, which are 
 not in themfelves jufl and folid, can poiTi- 
 bly make much imprefiion upon the public 
 mind; feeing they are altogether unfup- 
 po.ted by thofe adventitious circumftances 
 of fituation which fo fiequently give value 
 
 to
 
 ( 8o j 
 
 to opinions that otherwife would pofTefs 
 none. 
 
 I am not infenfible of the confequences 
 which may refult to myfelf perfonally, from 
 thus attacking a meafure fo generally fup- 
 ported by the friends of your Adminiftra- 
 tion, as well as by the " countlefs multitude" 
 of perfons whom either intereft, or habit, 
 or policy, or neceflity has attached inva- 
 riably to the views of the Bank of England. 
 But thefe confiderations have not been fuf- 
 fkient.to reprefs the ftill ftronger fenfe of 
 that duty which, in all fituations, and at all 
 hazards, every good fubjecl: owes to the 
 country that gave him birth. 
 
 I have the honour to be, 
 Sir, 
 Your mod obedient 
 
 Humble fervant, 
 WALTER BOYD.
 
 ( 81 ) 
 
 POSTSCRIPT, 
 
 29th Novembei , 1800. 
 SIR, 
 
 WHEN I ftated in my letter 
 of the nth inftant (fent to you on Wed- 
 nefday the 26th) the peculiar obfcurity of 
 the fubject of circulation, I little dreamt 
 that fo early and ftriking a proof would be 
 afforded of the truth of what I then ad- 
 vanced. 
 
 In all the newfpapers of yefterday that I 
 have feen, the report of your fpeech in the 
 Houfe of Commons, on Mr. Tierney's mo- 
 tion for going into a Committee to confider 
 of the State of the Nation, makes you fay, 
 ( what I have great difficulty to believe you 
 ever faidj by way of proving that there 
 was not a redundancy of the circulating 
 medium, " that Exchequer bills bore a pre- 
 mium, inftead of being at a difcount." It 
 appears to me altogether incomprehenfible 
 M that
 
 ( 92 ) 
 
 that this circumftance, which naturally of- 
 fers itfelf as a fymptom of an excefs of that 
 medium, mould have been adduced by you 
 as a proof of the reverfe. After viewing it 
 in every light, I find myfelf obliged to fup- 
 pofe, either that the newfpaper report of 
 your fpeech is incorrect, or that you had 
 not fufficiently confidered the argument you 
 then ufed. 
 
 Exchequer bills are payable in Bank- 
 notes. They bear an intereft of 3^d. per 
 centum, per diem ; and as no poflible doubt 
 can be entertained of their being punctually 
 paid, in Bank notes, when due, it is per- 
 fectly natural, that the holders of Bank- 
 notes mould exchange, for bills of that de- 
 fcription, the Bank-notes not immediately 
 neceffary for their current payments. 
 
 Exchequer- bills form no part of the cir- 
 culating medium, or ready money of the 
 metropolis. They are, like every other fpe- 
 cies of negotiable paper, objects, which that 
 medium, or ready money, circulates. The 
 circumftance, therefore, of their bearing a 
 
 premium
 
 ( 33 ) 
 
 premium does certainly indicate a great 
 abundance of the money or medium of cir- 
 culation, (ince it is thus employed in pur- 
 chafing them, notwithftanding that premium. 
 If a fcarcity of Bank-notes (or, in other 
 words, of the circulating medium) exifled, 
 Exchequer-bills, inftead of bearing a pre- 
 mium, would afluredly be at a difcount. It 
 does therefore appear incomprehenfible 
 how a premium upon Exchequer-bills 
 fhould be confidered as no proof of a re- 
 dundancy of Bank-notes, while a difcount 
 on Exchequer-bills would infallibly be the 
 confequence of a fcarcity of Bank notes. 
 When Exchequer-bills bear a premium, 
 their price is high. When grain rifes to a 
 certain pitch, its price is likewife high ; but 
 it certainly never entered into the concep- 
 tion of any perfon to fuppofe, that the high 
 price of grain was a proof of there being no 
 fuperabundance of money. It is, on the 
 contrary, very natural to infer, from the 
 high price of grain, as from the high price 
 of Exchequer bills, and of every other ob- 
 ject of exchangeable value, that money (or 
 its reprefentative fign) is abundant in the 
 extreme Thefe
 
 ( U ) 
 
 Thefe confiderations cannot furely have 
 efcaped your attention, and therefore I mud 
 fuppofe that your argument has been mif- 
 ftated ; for it would be a fuppofition alto- 
 gether unworthy of the Finance Minifter 
 of this country, to imagine (however other 
 men may be miftaken on fuch points) that 
 he ftiould have fallen into fo palpable an 
 error as to advance, in the great Council of 
 the nation, in fupport of a conclufion, an 
 argument which direclly militates againft 
 that conclufion. 
 
 If I had been able (confidently with my 
 feelings, under the peculiar circumftances 
 in which I was placed) to attend my duty 
 in Parliament on Thurfday, I fhould not 
 have had to truft to newfpaper report only 
 for what fell from you, in the, debate of 
 that night, and you would, confequently, 
 have been fpared the trouble of this fecond 
 addrefs. 
 
 I have the honour to be, 
 Sir, 
 Your molt obedient 
 
 humble fervant, 
 WALTER BOYD,
 
 ( 85 ) 
 
 APPENDIX. 
 
 A. ( See page 62. ) 
 
 MONTHLY AVERAGE PRICES of Wheat, 
 per Quarter, in England and Wales, calcu- 
 lated according to the Weekly Averages, as 
 given in the London Gazette, for the whole 
 of the Year 1795, and to the end of October 
 179^; and for the whole of 1799* and to the 
 end of October 1800, being two periods of 
 twenty-two months each. 
 
 ltd urns 
 
 s. 
 
 d. 
 
 Returns s. d. 
 
 95. Jan. 
 
 4 
 
 56 
 
 6 
 
 1799. Jan. 
 
 4 
 
 49 6 
 
 Feb. 
 
 4 
 
 *i 
 
 4 
 
 Feb. 
 
 4 
 
 49 11 
 
 March 
 
 4 
 
 59 
 
 11 
 
 March 
 
 4 
 
 50 4 
 
 April 
 
 4 
 
 62 
 
 2 
 
 April 
 
 4 
 
 53 5 
 
 May 
 
 5 
 
 64 
 
 10 
 
 May 
 
 4 
 
 60 10 
 
 June 
 
 4 
 
 70 
 
 1 
 
 June 
 
 5 
 
 63 11 
 
 July 
 
 4 
 
 64 
 
 5 
 
 July 
 
 3 
 
 65 11 
 
 August 
 
 4 
 
 108 
 
 4 
 
 August 
 
 5 
 
 ?« 11 
 
 Sept. 
 
 4 
 
 79 
 
 
 
 Sept. 
 
 4 
 
 75 5 
 
 Oct. 
 
 5 
 
 76 
 
 9 
 
 Oct. 
 
 4 
 
 83 6 
 
 Nov. 
 
 4 
 
 83 
 
 9 
 
 Nov. 
 
 5 
 
 89 9 
 
 Dec. 
 
 4 
 
 86 
 
 3 
 
 Dec. 
 
 4 
 
 93 10 
 
 96. Jan. 
 
 5 
 
 91 
 
 10 
 
 1800. Jan. 
 
 4 
 
 94 8 
 
 Feb. 
 
 4 
 
 93 
 
 6 
 
 Feb. 
 
 4 
 
 101 11 
 
 , March 
 
 4 
 
 100 
 
 
 
 March 
 
 5 
 
 107 11 
 
 April 
 May 
 
 5 
 
 84 
 
 3 
 
 April 
 
 4 
 
 111 11 
 
 4 
 
 75 
 
 7 
 
 May 
 
 5 
 
 120 2 
 
 June 
 
 4 
 
 80 
 
 2 
 
 June 
 
 3 
 
 126 7 
 
 July 
 
 5 
 
 80 
 
 11 
 
 July 
 
 4 
 
 134 10 
 
 Auguit 
 
 4 
 
 75 
 
 11 
 
 August 
 
 8 
 
 103 5 
 
 Sept. 
 
 4 
 
 64 
 
 5 
 
 Sept. 
 
 4 
 
 105 10 
 
 Oct. 
 
 5 
 
 6! 
 
 4 
 
 Oct. 
 
 4 
 
 103 2 
 
 General average 
 
 77 
 
 2 
 
 General average 
 
 87 3 
 
 8 
 
 
 
 
 
 B. 
 
 (See
 
 ( 86 ) 
 
 B. (See page 70.) 
 
 THE following papers will serve to establish incon- 
 testably three great points alluded to in this 
 Letter, viz. 
 
 1. The reality of the existence of the scarcity of mo- 
 
 ney in 1796, even at so early a period of that 
 year as the %d of April ; 
 
 2. The purity of the principles upon which a remedy 
 
 for that scarcity was devised, and 
 
 3. The perfect correspondence of the doctrine relative 
 
 to the operations of the Bank of England, and 
 those of the London Bankers, as laid down in 
 the report of the 5th of April, 1790, with the 
 doctrine laid down in the preceding letter to Mr. 
 Pitt of the llth of November, 1800. 
 
 RESOLUTIONS of a Select Meeting of 
 Gentlemen interested in, and acquainted with 
 the principles of, internal Circulation, held at 
 the London Tavern, on Saturday, the 2d of 
 April, 1796\ 
 
 Sir Stephen Lushington, Bart, in the Chair. 
 
 Resolved,
 
 ( 87 ) 
 
 Resolved, 
 
 1. That it is the opinion of this Meeting that 
 there has existed for a considerable time past, 
 and does exist at present, an alarming scarcity 
 of money in the City of London. 
 
 2. That this scarcity proceeds chiefly, if not 
 entirely, from an increase of the commerce of 
 this Country, and from the great diminution of 
 mercantile discounts, which the Bank of Eng- 
 land has thought proper to introduce in the 
 conduct of that establishment, during the last 
 three months. 
 
 3. That it is the opinion of this Meeting that 
 the interruption of Commerce, by cramping the 
 circulation, from whatever cause, is highly in- 
 jurious to private credit and the interests of the 
 public at large (more especially in time of war) 
 inasmuch as the revenues and resources of the 
 country must suffer thereby. 
 
 4. That it is the opinion of this Meeting that 
 the present scarcity of money threatens the most 
 serious calamities; inasmuch as no Merchant, 
 Trader or Manufacturer, can depend upon con- 
 verting into Cash any of the Bills of Exchange, 
 
 which
 
 ( 88 ) 
 
 which he receives in the ordinary course of his 
 business ; and that such Bills being the natural 
 means, by which the British Trader has been 
 always accustomed to provide for the discharge 
 of his engagements, there is the greatest reason 
 to fear, that a longer suspension of this natural 
 and indispensable resource, may be productive 
 of the most fatal consequences to public and 
 private credit. 
 
 5. That it is the opinion of this Meeting that 
 the extraordinary reduction of the Discounts of 
 the Bank of England does not proceed from 
 any distrust or doubt of the solidity of the 
 Bills presented there for discount, no suspicion 
 of any house, except one that failed, having 
 transpired (so far as has come to the knowledge 
 of this Meeting) during the period of full three 
 months that the scarcity of money has pre- 
 vailed. 
 
 6. That it is the opinion of this Meeting that 
 the circumstance of the existeuce of so unex- 
 ampled a scarcity of money during so long a 
 period, without any failure of note (except the 
 one above alluded to) is a very strong proof of 
 the general solidity of the transactions of the 
 tra.de of this Country. 
 
 7. That
 
 ( 39 ) 
 
 7. That it is the opinion of this Meeting that 
 the measure adopted by the Bank of England, 
 may have been deemed necessary and proper 
 by the Directors, under the present circum- 
 stancesofthat establishment, and that therefore 
 it is not probable that any representation from 
 this meeting- to the Directors of the Bank would 
 be attended with any effect towards the relief 
 of the trade of this Country. 
 
 8. That it is the opinion of this Meeting that 
 if means can be devised for augmenting the Cir- 
 culating Medium of the Country, so as to re- 
 store it to what it was previous to the late Reso- 
 lution of the Bank of England, for diminishing 
 their discounts, without infringing the exclusive 
 privilege of Banking granted to the Bank of 
 England, and without violating any principle of 
 public faith or confidence, it is the duty of 
 every friend to the trade of England to give 
 such a measure the most steady and vigorous 
 support. 
 
 9. That a Committee of seven persons be 
 named (four of whom may be impowered to 
 act) to digest the outlines of a plan in confor- 
 mity to the ideas suggested in the eighth resolu- 
 tion ; and that they do report the same to this 
 N Meeting
 
 ( 50 ) 
 
 Meeeting on Tuesday morning at half past ten 
 o'clock precisely, previous to its being commu- 
 nicated to the Chancellor of the Exchequer. 
 
 10. That the following Gentlemen be named 
 & Committee for the above purpose: 
 
 The Chairman, 
 
 Walter Boyd, Esq. 
 
 Sir James Sanderson, Bart, 
 
 Mr. Alderman Anderson, 
 
 Mr. Alderman Lushington, 
 
 John Inglis, Esq. 
 
 J. J. Angerstein, Esq. 
 
 11. That a copy of these Resolutions, signed 
 by the Chairman, be transmitted this evening t© 
 the Right Honourable the Chancellor of the 
 Exchequer, and that the Chairman do at the 
 same time request a conference with him on 
 Tuesday, the 5th of April, between the hours of 
 twelve and four. 
 
 12. That the thanksof this Meeting be given 
 to the chairman for his zealous conduct on this 
 occasion. 
 
 13. That this Meeting do adjourn till Tues- 
 day next, the 5th of April, at half past ten 
 o'Clock, 
 
 Report
 
 ( 51 ) 
 
 Report of the Committee, drawn up by Mr. 
 Boyd, and approved by the Meeting of the 
 5th April, 1796- 
 
 YOUR Committee are of opinion that, in 
 order to place in the clearest point of view pos- 
 sible, the proposal they have to submit to your 
 consideration on the subject of a remedy for the 
 present alarming scarcity of money, it will be 
 proper to consider previously the nature of what 
 is understood in England by the word money, 
 or, in other words, what the circulating medium 
 of this country consists of. 
 
 It is a well-known truth, that the specie of this 
 country is not equal to the purposes of circulat- 
 ing the whole value of the national industry and 
 commerce in their present extended state. The 
 Gold and Silver that would be necessary for that 
 purpose, were any thing to reduce our circula- 
 tion to mere specie, could not be procured with- 
 out giving as the value of it,such a portion of the 
 national industry as would equal the addition 
 made to the powers of the specie by the use of 
 paper currency. If twenty millions were the 
 total amount of our specie, and forty millions 
 were necessary to carry on the circulation of 
 5 the
 
 ( 92 ) ' 
 
 the trade and industry of the country ; unless 
 the deficiency of twenty millions could be sup- 
 plied by paper currency, it would be neces- 
 sary either to barter twenty millions of the pro- 
 duce of our industry to procure the balance, or 
 to reduce our trade and industry to half their 
 extent. 
 
 By the happiest exertion of the good sense of 
 the country, in combining the effects of confi- 
 dence with those of capital, the pozvers of our 
 Specie have been carried much beyond the li- 
 mits fixed by its amount. By the wise introduc- 
 tion of a paper currency, constantly convertible 
 into Gold and Silver, that currency has justly 
 acquired all the powers which Gold and Silver 
 possess. • 
 
 The circulating medium of this city con- 
 sists chiefly of Bank of England Notes, for con- 
 verting which into gold and silver, when called 
 for, the Bank keeps a large quantity of coin in 
 its coffers, though not the full amount of the 
 notes in circulation. The difference between 
 the amount of the notes in circulation and the 
 specie kept for paying them, is a clear addi- 
 tion to the powers- of the money of the country. 
 This is the first great augmentation, which the 
 
 circulating
 
 ( 99 ) 
 
 Circulating medium of the country receives from 
 the combined powers of Confidence and Capital : 
 But this is not the only one. 
 
 The sum of money which every Merchant, 
 Trader, or Manufacturer, and indeed almost 
 every man of whatever description, finds it ne- 
 cessary to keep altogether unemployed, to an- 
 swer the various calls of business and expense, 
 is generally deposited, not in his own strong 
 faox, but in the hands of his Banker; and this 
 Banker, from being the depositary of a great 
 number of such sums, finds, from experience, 
 that the whole of these sums cannot, according 
 to the natural course of things, be all wanted at 
 once ; but, on the contrary, while he possesses 
 good credit, that a part of these deposits will 
 fully answer all the calls that can be made upon 
 him. He therefore employs a part of these de- 
 posits in discounting Bills of Exchange, by 
 which means he draws a revenue from what, in 
 the hands of his customers, would have been a 
 dead unproductive fund. The sum he thus 
 employs is another clear addition to the powers 
 of the money of the country. 
 
 The ready money, which Bankers keep by 
 them toanswer the calls of their customers, con- 
 sists
 
 ( 94 ) 
 
 sists chiefly of Bank of England Notes, and it 
 is a matter of curious consideration to observe 
 the effects which the circulation of Bank Notes, 
 and the deposit of Bank Notes with Bankers, 
 have upon the general circulation of the coun- 
 try. The following supposition will illustrate 
 their effects. If the Bank should make it a rule 
 to keep in coin, one-third of the whole amount 
 of their Notes in circulation, and the amount 
 of their notes should be forty-five millions, the 
 amount of their coin would, of course, be fifi- 
 teen millions. Therefore there would be, in 
 this case, an addition to the circulating medi^ 
 um of the country of thirty millions. But if 
 twenty-one of the forty- five millions of notes 
 are deposited with Bankers, and these Bankers 
 keep one third of the notes so deposited to an- 
 swer the demands which may be made upon 
 them, there will be a further addition to the 
 powers of the circulating medium, of fourteen 
 millions ; so that; in fact, the effect to the ge- 
 neral circulation of the country will be precisely 
 the same as if the Bank had circulated forty- 
 five millions of notes, and kept only one mil- 
 lion of coin for paying them. No Bank could 
 ever be so imprudent as to keep so small a ba- 
 lance with so large a circulation, and yet, by the 
 combined effects of Confidence and Capital,and
 
 ( 95 ) 
 
 the intervention of the Bank, and a number of 
 private Bankers, not only the same effects are 
 produced to the country, but they are produced 
 without any risk or imprudence. 
 
 Thus it appears that the chief gains of private 
 Bankers are not (as has been often errone- 
 ously supposed) what the public Bank would 
 gain if they did not exist, but, on the contrary, 
 what, but for them, would be absolutely lost to 
 all the world. 
 
 These observations upon the combined effects 
 of the two great Engines of circulation in this 
 country lead your Committee to consider whe- 
 ther it may not be practicable to introduce ano- 
 ther with perfect safety, in order to supply the 
 present deficiency occasioned by the diminution, 
 of Bank Notes. 
 
 The respect for the faith of parliament, which 
 ought to be preserved inviolate, as well as your 
 instructions, confine the researches of your Com- 
 mittee, on this occasion, to such measures as 
 shall neither infringe the privilege of exclusive 
 Banking granted to the Bank of England, nor 
 violateany principle of publicfaith orconfidence. 
 Narrow as your Committee feels the ground 
 
 marked
 
 r §6 ) 
 
 marked out for their researches, they are not 
 without hope* that they may be successful. 
 
 The first object of enquiry seems to be, to as- 
 certain in what the privilege of exclusive bank- 
 ing granted to the Bank of England consists. 
 By exclusive banking are w£ to understand deal- 
 ing in Discounts ? Surely not,seeing every mer* 
 cantile House, however numerous its partners, 
 is in the daily exercise of this right. Is deal- 
 ing in Bullion the privilege that is not to be in- 
 vaded ? this cannot be the case, seeing every 
 Merchant, every company of Merchants, are at 
 perfect liberty to deal, and to deal in it every 
 day. 
 
 Does the exclusive privilege consist in the pur- 
 chase of Exchequer Bills and other Govern- 
 ment securities? No, this field is open to all the 
 world. 
 
 In what then does it consist ? 
 
 The privilege of exclusive banking enjoyed 
 by the Governor and Company of the Bank of 
 England as defined by the Acts of Parliament 
 under which they enjoy it, seems to consist in 
 the power of borrowing, owingi or taking up 
 
 money
 
 ( 97 ) 
 
 money on their bills or notes payable on de. 
 mand. No other body politick or corporate, 
 nor any persons united in covenants of partner- 
 ship exceeding the number of six, being per- 
 mitted to borrow, owe, or take up money on 
 their Bills or Notes payable on demand, or at 
 any less time than six months from the borrow- 
 ing thereof. In proposing therefore any new 
 species ofpaper to supply the present deficiency 
 in the quantity of circulating medium, it is in- 
 dispensibly necessary that such Paper should not 
 be payable sooner than in six months from the 
 date of issuing it. But paper payable in six 
 months can make no addition to the circulating: 
 medium of the country, unless means can be 
 found to give such paper all the qualities of 
 ready money. This, in the opinion of your 
 Committee, may be accomplished by the follow* 
 ing means. 
 
 Let a board consisting of twenty-five mem* 
 bers be constituted by act of Parliament for the 
 support of credit, to act without fee or reward. 
 
 Let this Board be authorised, to issue promis- 
 sory Notes payable in six months from the re- 
 spective dates of issuing them, together with 
 interest at the rate of L^di per day per 1001. on 
 ll. 18s. per centum per annum, upon receiving 
 O the
 
 ( 9$ ) 
 
 the value in gold and silver, Bank of England 
 notes or in bills of exchange, having not more 
 than three months to run. 
 
 These promissory notes will be readily taken 
 in payment by all Bankers, Merchants, and 
 others, if the board be provided with a fund of 
 ready money for exchanging such of them as 
 may, from time to time, be presented for that 
 purpose ; nay, they will be preferred to cash, 
 in as much as, while they remain idle, they will 
 in fact be producing a small interest. 
 
 This ready money fund will easily be provided 
 by the voluntary deposits of the Bankers, Mer- 
 chants, and others, who will be happy, in order 
 to promote the general good, (particularly when 
 it can be done not only without loss, but even 
 with advantage to themselves) to carry a part of 
 their ready money to this Board, and receive a 
 return in the new notes at six months date, 
 which new notes, from the establishment of the 
 fund for exchanging them, as they may be pre- 
 sented, will to all intents and purposes, perform 
 the functions of money, and thus replace the 
 banknotes so carried to the board. But, while, 
 by the establishment of this Board,a new species 
 of paper is introduced facilitating the general 
 
 circulation
 
 ( 99 ) 
 
 circulation, care must be taken that the opera- 
 tions of this new board do not tend to destroy 
 anypart of the presentcirculating medium, which 
 consists chiefly of bank notes. 
 
 For this purpose it is proposed that theReady- 
 Money-Fund, to be kept by the Board for ex* 
 changing the new notes, as they happen to be 
 presented,shall consist of Bank of England notes 
 and not of specie ; the grand object of the esta- 
 blishment of this Board being merely to supply 
 the deficiency of the circulation, as now per- 
 formed by the bank of England, and not, by 
 any means to diminish that circulation. 
 
 The establishment of this Board cannot, with 
 any colour of reason, be construed into an in- 
 fringement of the charter of the Bank of Eng- 
 land ; 
 
 Because, 
 
 1st. It is not a Bank established for the bene- 
 fit of individuals,and interested in rivalling the 
 Bank of England, but a Board erected for the 
 express purpose of furnishing to trade, a tempo- 
 rary assistance which the Bank of England do 
 not find it convenient, or perhaps do not think 
 
 themselves
 
 ( ioo ) 
 
 themselves sufficiently authorised under their 
 present powers to give. 
 
 2d. The notes which it is proposed this Board 
 should issue will he not only different from those 
 of the Bank of England in one essential point, 
 that of bearing interest while unpaid, but their 
 tenor will be perfectly conformable to the law 
 laid down in the acts of parliament which grant 
 to the Bank its exclusive privelege. 
 
 3d. So completely removed is the proposed 
 establishment of the Board from all idea of in- 
 croaching upon the exclusive privilege of the 
 Bank, that the Bank itself could not more care- 
 fully guard itsprivilege orpreserveits advantages 
 than the present proposal does. 
 
 Not a single note of the Bank of England will 
 he forced out of circulation by the proposed 
 Board, beyond what the Bank itself chooses — ; 
 the circulation which will arise from the esta- 
 blishment of the present Board will be precisely 
 what the Bank of England does not afford — it 
 will not be part of the present circulation of the. 
 Bank, which will be transferred to theBoard,but 
 a new circulation founded upon, and so perfectly 
 favourable to, that of the |3anlv, as that Banls: 
 5 notes;
 
 ( 101 ) 
 
 notes are therein considered, as the specie of the 
 country* and the new notes only as paper^cur- 
 r«ency. 
 
 4th. The establishment of this Board, is only 
 resorted to, on the spur of a moment, as an ex- 
 pedient for remedying a greatnational evil which 
 threatens ruin to private credit,and which there- 
 fore must materially involve the^eneral interests 
 pf the country. 
 
 %* The interview with the Chancellor of the 
 Exchequer did accordingly take place ; 
 and the Committee there learnt that it 
 had been proposed by the Bank-Direc- 
 tors as the best remedy for the scar- 
 city of money, that the floating debt 
 should be funded — The Minister said, 
 that he would first try what this would 
 do towards removing the scarcity of 
 money; and, that if it should answer 
 the purpose, the establishment of a 
 Board for the support of credit would 
 be unnecessary. 
 
 t It had not then entered into the contemplation of th« 
 writer of this report, that Bank-notes, here considered as 
 equivalent to specie, were, one day, to ba deprived of their 
 only title, to that < qui? a!enc«. 
 
 The
 
 ( 102 ) 
 
 The floating debt was funded, by means of 
 the Loan of 7,500,0001. which was 
 contracted for en every liberal terms, 
 upon the prospect held out to the con- 
 tractors, of a total change of system on 
 the part of the Bank. How this pro- 
 spect was realised, the distresses of the 
 city in the end of May 1796, can 
 testify. 
 
 Mr
 
 ( 103 ) 
 
 C. (See Page 72.)' 
 
 Monday Morning, 2 o 1 Clock. 
 27 th February, 1797. 
 
 My Dear Friend, 
 
 THE more I think, the more I am alarmed 
 at declaring Bank-notes a legal tender, because 
 although the conditionof their being stillpayable 
 in coin, softened down very much my repug- 
 nance to the measure, I see that the inevitable 
 consequence of such a law will be to create a 
 very great run upon the bank, and that it will 
 lead to the dreadful crisis of the bank itself being 
 dispensed with paying them in coin. Should 
 such a period arrive, I should deplore it more 
 than any calamity that can befal this country; 
 because, not only from my reflections on the 
 nature of money and credit for a great part of 
 my life, but also from what passed, under my eyes 
 in France in the year 1788,* (not a full year 
 before the revolution), I am warranted to say 
 that all the absurdities of the doctrine of tran- 
 substantiationare really nothing tothemonstrous 
 principle \that a sterile piece of paper is equal to 
 gold. As long as it can be converted into gold, 
 it truly deserves the name, and performs the 
 
 * Th« Writer was then establiihed as a Banker in Paris, 
 
 functions
 
 ( 104 } 
 
 functions of, money. The moment it is forced 
 upon the public, without that precious quality* 
 it becomes a violated engagement, whose value 
 is liable to the greatest depreciation. The ef- 
 fects of a forced paper-currency on our ex-« 
 changes with foreign countries, on the prices of 
 goods and property of every kind, it is needless 
 to enumerate to you. You cannot be ignorant 
 of them. They lead to all the convulsions which 
 a free and happy country ought to deprecate, as 
 the greatest of evils 
 
 In the year 1788, the Paris bank * was run. 
 upon. I was active in bringing coin from Flan- 
 ders, and in throwing funds into the bank by 
 every possible means. The run continued eight 
 or ten days. The hank kept its ground, and 
 all the coin which had been carried away was 
 brought back again. For this time the true 
 principles prevailed, and the bank was saved : 
 but a few months had not elapsed until a second 
 run was made, which lasted only a single day, 
 because the bank-directors, with unpardona- 
 ble folly, secretly solicited an order of council 
 
 * TheCaisse d y Escompte, a publicBank, divided into sham 
 ■with a capital of 100,000,0001, livres tournois, equal to 
 4,375,0001. sterling, and having in circulation notes to the 
 amount of ue.irly as much more. 
 
 for
 
 ( 105 ) 
 
 for making their notes a legal lender, and dis- 
 pensing with their paying them. The very 
 night this order was solicited, a meeting of 
 bankers was held, and the apparent ease which 
 a forced circulation of notes offered, led them 
 to agree that this was the only measure for sav- 
 ing themselves and the country — two indivi- 
 duals, one other banker* and myself excepted, 
 who expressed the most unequivocal opposition 
 to the project. 
 
 On no occasion did I ever take so warm a part 
 against any measure ; and I take God to wit- 
 ness, I did so from the most intimate conviction 
 that ruin must inevitably be the consequence. 
 I lived to see all my predictions realised, and 
 the authors of the scheme curse their blind 
 infatuation, which had led them to propose a 
 measure which most assuredly paved the way to 
 that ruinous system of paper which swallowed 
 up so many fortunes,and destroyed all the sacred 
 respect for property in that country. 
 
 I don't say that the surmise I had from the 
 
 city, of the measure in contemplation, ought to 
 
 excite all these gloomy apprehensions. I hope, 
 
 and believe, that I exaggerate things: but I 
 
 *Mr. Perregaux, 
 
 P do
 
 ( 106 ) 
 
 do assure you, that I think such a step as even 
 what we talked of to day, is big with such in- 
 finitely importantconsequences as to render the 
 utmost caution and circumspection necessary 
 before any thing is resolved upon. Depend 
 upon it, that a step of this sort cannot be of a 
 neutral kind. It must produce great effects&nd. 
 therefore it ought to be well weighed. 
 
 Fear is apt to grasp at any thing that looks 
 like safety ; but on that account, the counsels 
 of Fear must be cautiously avoided. Principles 
 must be resorted to, and above all, the natural 
 tendency of the human mind ought to be care- 
 fully considered. This tendency ought to sa- 
 tisfy every man that the run upon the Bank has 
 a» much better chance of being stemmed by as- 
 sociations, and the exertions of public-spirited 
 men, than by any Lam which in the least de- 
 gree encroaches upon the free and voluntary 
 circulation of their Notes. 
 
 I am sure you will acquit me of any sinister in- 
 tention in thus throwing out my ideas to you on 
 this subject at so late *, or rather at so early an 
 
 * Written in the night betwcea Sunday the 26th, and 
 Monday the 27th February. 
 
 hour.
 
 ( 107 ) 
 
 houroThe fact is,that such a measurewould pro- 
 bably produce a temporary ease in the general 
 circulation, and of course give me greater ease 
 as to my oxvn transactions : but I should ill de" 
 serve the place I hold in your esteem, if I with- 
 held my opinion from you on a subject of this 
 momentous kind. 
 
 As it was whispered in the city on Saturday, 
 that the Speaker had been taking some part in 
 this business, I regret exceedingly that I have 
 not the honour of being particularly known to 
 him, because I should have taken the liberty to 
 wait upon him on this occasion ; but as you 
 have frequently occasion to see him, you may- 
 show him this letter, if you think proper, I shall 
 go early to the city, in order to be able to at- 
 tend the House in the evening* 
 
 J am always, my dear Friend, 
 Your's most faithfully, 
 
 WALTER 30YD, 
 
 John Fordyce, Esq.
 
 ( 103 ) 
 
 D. (SeeFage7S.) 
 
 IT may be said, that the great increase of 
 our imports and exports, and the considerable 
 addition made to the funded property of the 
 country, within the last four years, fully justify 
 the increase of the circulating medium which 
 has taken place within that period. If the 
 great increase of the public debt, and of our 
 imports and exports be considered as evidence 
 of a similar increase, in every branch of the na- 
 tional industry, the observation would be enti- 
 tled to some weight ; but I doubt much if any 
 man can be found hardy enough to maintain 
 this to be the case, and at the same time able 
 to support his opinion with arguments or evi- 
 dence. The addition to the public debt is 
 not a new capital, acquired by the country 
 within the period in which that addition has 
 been made. Only a very small part of it can 
 possibly have been acquired within that time ; 
 and therefore the great proportion of it must 
 ha^ve formerly existed, under various other 
 forms, many of them, in all probability, more 
 favourable to the productive powers of industry 
 than when they were converted into part of the 
 public debt. 
 
 The
 
 ( 109 ) 
 
 The real increase of the wealth and industry 
 of the country, within so short a period as four 
 years, must have been great beyond what the 
 most sanguine imagination can suppose, to have 
 added, by natural means, either four-fifths or 
 three-tenths to the primary circulator of that 
 wealth and industry ; and if, by artificial and 
 exceptionable means, the powers of that circus 
 lator have been augmented greatly beyond 
 what they would have been if no such means 
 had been resorted to, the consequence must, of 
 necessity, be that augmentation in the prices of 
 commodities, which now bears so hard on all 
 those classes of society whose revenue does not 
 vary with those prices. 
 
 The total amount of the official value of all 
 Imports into Great Britain, for the years 1794, 
 1795, and r/96, was £. 63,213,103. 
 
 The total amount of the official value of all 
 Exports, for that period, was £. 84,390,336. 
 
 And the total amount of the official value of 
 both Imports and Exports, for that period, was 
 1 . 152,603,439. 
 
 Making an annual average of £. 50,857^813. 
 
 The
 
 ( no ) 
 
 The total amount of the official value of all 
 Imports into Great Britain for the years 1797, 
 1798, and 1799, (supposing the Imports from 
 India to be the same for 1799 as for 1798) was 
 £. 78,817,055. 
 
 The total amount of the official value of all 
 Exports for the same period, was £\ 98,499,485. 
 
 And the total amount of the official value of 
 both Imports and Exports, for that period, was 
 £.177,387,140. 
 
 Making an annual average of £.59,129,046, 
 which, compared with theaverageof three years 
 ending in 1796, is an increase of a little more 
 than one-sixth of that average. 
 
 Admitting, for the sake of argument, (what 
 I am very far from admitting, in point of fact) 
 that an increase of Imports and Exports under 
 any circumstances., and particularly under the 
 peculiar circumstances of the present war, im- 
 plies a similar increase inall the other branches of 
 national industry ; and that such increase of 
 Imports and Exports required a proportional 
 augmentation of Bank- Notes; still, even in this 
 8 view
 
 ( 111 ) 
 
 view of the subject, it will be found, that the 
 increase of Bank-Notes greatly exceeds that of 
 Imports and Exports, the increase of Bank- 
 Notes being, according to one mode of esti- 
 mation in the proportion of four-fifths, and, 
 according to another, in the proportion of 
 three-tenths of their former amount; while 
 the increase of Imports and Exports has only 
 been in the proportion of one-sixth of their 
 former amount. 
 
 Thus the very principle upon which an in- 
 crease of Bank-Notes is defended, with the 
 greatest appearance of success, is decisively 
 against the degree of that increase ; but a re- 
 ference to the period of three years immediately 
 preceding that which has just been considered, 
 will show that the principle itself (though incon- 
 testably true with regard to the whole productive 
 powers of the country) is, and must be, falla- 
 cious t when applied to any one branch of the 
 national industry, as indicative of the progress 
 of all the others. 
 
 The amount of the average Imports and Ex- 
 ports for three years ending in 179', u:ls 
 £ 42*804,410, 
 
 The
 
 ( 112 ) 
 
 The amount of the average Imports and 
 Exports for three years ending 1796, was 
 £.50,867,818. The average increase, therefore, 
 was £'8, 663, 403, '-or nearly one-fifth of their 
 former amount. 
 
 The average-circulation of Bank-Notes for 
 three years ending in 1793, was £. 1 1 .,000,043. 
 
 The average circulation for three years end- 
 ing in 1796, Was £. 1 1, 844, 216. 
 
 The average increase therefore was £344, 173, 
 or only somewhat more than one- thirty-third 
 part of their former amount. 
 
 It was originally intended to have given 
 comparative statements of prices in 1796 
 and 1800; but considerations of public 
 expediency have determined me to drop 
 this part of my purpose 
 
 THE END. 
 
 W. Flint, Printer, Old Bailey, London*
 

 
 :x.i ■■'*-.■ - ] \-