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 AT 
 LETTER 
 
 TO THE 
 
 RIGHT HOx\. ROBERT PEEL, 
 
 M. P. FOR THE UNIVERSITY OF OXFORD, 
 
 ON THE 
 
 PERNICIOUS EFFECTS 
 
 OF A 
 
 VARIABLE STANDARD OF VALUE, 
 
 ESPECIALLY AS IT REGARDS 
 
 THE CONDITION OF THE LOWER ORDERS 
 
 AND 
 
 THE POOR LAWS. 
 
 BY ONE OF HIS CONSTITUENTS. 
 
 Laissez nousfaire. 
 
 SECOND EDITION. 
 
 OXFORD, 
 
 PRINTED FOR JOHN MURRAY^ ALBEMARLE-8TREET, 
 LONDON. 
 1819.
 
 BAXTER, PRINTBK, OXFORD.
 
 LETTER, 
 
 Sfc. 
 
 SIR, 
 
 In addressing to you these remarks 
 upon the state of our currency, and its connexion 
 with some of the most important interests of so- 
 ciety, I have presumed partly on the political re- 
 lation now subsisting between us, but still more on 
 the manliness and candour which your parliament- 
 ary conduct has always exhibited, and which assures 
 me that I shall obtain one reader at least who will 
 think for himself, and who will not fear, upon a great 
 practical question, to declare what he thinks, how- 
 ever adverse his opinions may be to those whose 
 general Hue of politics he approves. Another mo- 
 tive for this choice is, that the sanction of such a 
 name will probably engage the attention of many 
 readers for whom the subject itself has few attrac- 
 tions, or who think perhaps that the discussion it
 
 has undergone is already complete, and that no addi- 
 tional Hght can now be thrown upon it. To such rea- 
 soners I have only to point out the simple fact, that 
 the present Chancellor of the Exchequer maintains 
 doctrines which are at variance with writers hitherto 
 regarded as the greatest authorities in political 
 economy — that this controversy still subsists be- 
 tween his published opinions and theirs — and that 
 his practical measures are still regulated by the 
 opinions he has avowed. Unless therefore we are 
 prepared to abandon these authorities, and adopt 
 a new theory of money, we must regard the ques- 
 tion as one still undetermined, and considering 
 its deep and universal interest, deserving of the 
 most careful investigation. 
 
 Before I proceed however to lay before you the 
 view I have taken of this important subject, I must 
 be permitted to observe, that the didactic ^ir 
 which may appear in some of these statements, 
 unsuitable as it is to the epistolary form, and par- 
 ticularly as addressed to one who is himself far 
 superior to the writer in political experience and 
 knowledge, is yet almost inseparable from the me- 
 thod of inquiry here pursued. When first prin- 
 ciples are brought in question, it is necessary to 
 explain and vindicate the very elements of the 
 science: at any rate it is impossible satisfactorily 
 to maintain an argument on practical measures
 
 without pointing out the dependency of our posi- 
 tions on those first principles which are generally 
 received as true. In the discussion which has 
 hitherto taken place, in and out of Parliament, the 
 advocates of our present financial system have 
 sometimes adopted one, sometimes another of 
 these methods. At one time they deny the funda- 
 mental principles alledged by their opponents— at 
 another they dispute the connexion between the 
 cases adduced and those principles — but still 
 oftener do they seek to involve the question in 
 darkness and mystery, by bringing forward facts, 
 apparently at variance with those principles, and 
 leaving their adversaries to account for them — thus 
 playing a safer part than if they openly denied 
 the principles themselves ; and by a trick of so- 
 phistry, throwing a discredit upon their adversary, 
 because he cannot at the moment either disprove 
 the facts, or reconcile them at once with his own 
 theory. 
 
 To this latter practice I shall particularly advert 
 in the sequel ; conceiving, as I do, that it is highly 
 disingenuous, and unworthy of the station and cha- 
 racter of those who frequently resort to it. Every 
 one knows how difficult it is to make the generality 
 of men, especially of men who are engaged, as all 
 are more or less, in practical dealings, contemplate 
 (juestions of this kind steadily and impartially. A 
 B 2
 
 considerable effort is necessary to enable them to 
 abstract these ideas from the crowd of adventitious 
 circumstances in which they are always enveloped, 
 and still more from the personal interests involved 
 in them. And when this end is accomplished for 
 a time, and the truth is perceived and acknow- 
 ledged, how soon is the attention exhausted, and 
 the mind returns with pleasure to that state of 
 slovenly repose in which we are too apt to indulge, 
 unless when excited by considerations of interest 
 or duty. If it be true even in morals that 
 
 Our better mind 
 Is but a Sunday's garment, then put on 
 When we have nought to do, but at our work 
 We wear a worse for thrift, 
 
 still more natural is it, in matters which belong 
 rather to the province of intellect than of moral 
 duty, that the purer speculations of science should 
 be of rare occurrence and short-lived. Those ex- 
 traneous particulars which have by a laborious pro- 
 cess been separated in order to exhibit the main 
 ingredient in its unmixed form, soon rush together 
 and become blended as intimately as before, when 
 the scientific purpose is answered, and the power- 
 ful test which had expelled them is withdrawn. 
 There is then a strong and constant tendency in 
 the public mind to this confusion of the simple
 
 elements of science in the practical concerns of 
 life : and it is painful to see the authority of 
 men high in station employed not to correct 
 these errors, but to sanction and confirm them. 
 Independently of the actual mischief flowing from 
 the errors themselves, one may be allowed, with- 
 out incurring the charge of Quixotic enthusiasm, 
 to lament that the cause of truth itself should be 
 thus exposed to unexpected difficulties— difficulties 
 not of the ordinary kind arising out of the pre- 
 judices and ignorance of the vulgar, but from the 
 influence of men of talent and reputation ; whose 
 aid one might rather have anticipated in behalf of 
 reason against prejudice. 
 
 That the opposite course should have been pur- 
 sued and should have prevailed, I can only account 
 for, by considering the nature of the Cause in 
 support of which these financial doctrines were 
 first avowed, and the political hostility to that cause 
 which was declared by many of their adversaries. 
 Whatever my own opinion of the doctrines may 
 be, it certainly does not arise from any disappro- 
 bation of the policy then pursued, nor from any 
 leaning towards the foreign politics of its oppo- 
 nents. On the contrary, if that cause had required 
 much greater pecuniary sacrifices from this nation 
 than have been made, according to my judgment 
 it was well worth them all. The nation, I believe.
 
 6 
 
 would have cheerfully borne more : and now that 
 the contest has been brought to a glorious issue, 
 they would have looked back with pride instead of 
 regret on the exertions it had cost them. But on 
 this very account. I lament that sophistry and de- 
 lusion should have been employed to effect that 
 for which the simple truth was alone sufficient. 
 The cause was worthy of better means : and to the 
 credit of the late Mr. Perceval it should be ob- 
 served, that he always grounded the obnoxious mea- 
 sure of a forced paper currency, not as his succes- 
 sor in office has done, upon the denial of all the 
 soundest maxims of political economy, but on the 
 necessity of the measure in order to sustain the 
 conflict in which we were then engaged. This 
 ground is intelligible and manly. It admits the 
 departure from established principles, but defends 
 it as the means of avoiding a greater evil. The 
 choice is thus fairly placed before the country : 
 and by the very mode of stating the case, it is at 
 least implied that when the emergency is past, 
 there will be an end also of those irregular pro- 
 ceedings to which it gave birth. Had this ground 
 been steadily maintained, the country would have 
 had the satisfaction of doing that generously, 
 which they have now been told was no sacrifice at 
 all. They might have indulged an honest pride in 
 facing the difficulties of their situation with their
 
 eyes open, instead of yielding to representations 
 Which disguised the danger, which insulted the un- 
 derstanding of the wise, and deprived even the ig- 
 norant of the credit of making a voluntary tribute 
 to so great a cause. 
 
 It is an old reflection, that men submit cheer- 
 fully to irregular acts of power which they regard 
 as necessary, but not to injustice under colour of 
 right. A reflection which Lord Clarendon follows 
 up by some judicious remarks on the effect of that 
 unwise as well as unjust decision of the twelve 
 judges in the case of Ship-money. " That pressure,'* 
 he observes, " was borne with much more cheer- 
 ** fulness before the judgment for the king, than 
 " ever it was after: men before pleasing themselves 
 " with doing somewhat for the king's service, as a 
 " testimony of their affection, which they were not 
 " bound to do ; many really believing the neces- 
 " sity, and therefore thinking the burden reason- 
 " able ; others observing, that the advantage to the 
 " king was of importance, when the damage to 
 " them was not considerable ; and all assuring 
 " themselves, that when they should be weary, or 
 " unwilling to continue the payment, they might 
 " resort to the law for relief, and find it. But 
 " when they heard this demanded in a court of 
 " law, as a right, and found it by sworn judges 
 " of the law adjudged so, upon mirk grounds and
 
 8 
 
 " reasons as every slander-by was able to swear 
 " ivas not laiv, and so had lost the pleasure and 
 *' delight of being kind and dutiful to the king; and 
 *' instead of giving, were required to pay, and by a 
 " logic that left no man any thing which he might 
 ^' call his own, they no more looked upon it as 
 " the case of one man, but the case of the king- 
 " dom, nor as an imposition laid upon them by the 
 " king, but by the judges ; which they thought 
 " themselves bound in conscience to the public 
 " justice not to submit to." 
 
 How far this memorable case bears upon the 
 question before us, as a perversion of law, I shall 
 explain hereafter. Even under that view of it there 
 appear to me to be no slight grounds of alarm in 
 the language which the Chancellor of the Exchequer 
 has thought fit to hold : — but at present I would 
 point out more particularly the close analogy sub- 
 sisting between his perversion oi reason and their 
 perversion of law, in support of a measure of state, 
 and the corresponding effect naturally produced 
 in the minds of all those who watch the proceeding. 
 For myself, I could not more correctly describe 
 the feeling excited by his speeches and the votes of 
 Parliament which followed upon them, than by 
 adopting the words of the eloquent historian just 
 cited. And the more the subject is examined, the 
 more, I am perfiuaded, will the public feel the ne-
 
 9 
 
 cessity of some explicit disavowal, on the part of 
 Government, of such pernicious doctrines. 
 
 It will be my endeavour, in the latter part of 
 this Letter, to exhibit with as much conciseness as 
 is consistent with perspicuity, the several tenets 
 which Mr. Vansittart has maintained on the sub- 
 ject of our currency, in opposition not only to his 
 Parliamentary adversaries, but to the ablest writers, 
 whose opinions have been universally adopted 
 throughout Europe ; and more especially to analyze 
 the reasoning by which his measures have been 
 supported. But it will be expedient in the first 
 place to premise some observations, on the im- 
 portance of this subject — on its intimate connection 
 with our laws, our morals, our religion, in short, 
 with every constituent of social welfare and hap- 
 piness. It is, I fear, but too common to regard a 
 question of finance as important only to the public 
 transactions or to the foreign commerce of the 
 country : and people in general are apt to turn a deaf 
 ear to discussions in which they fancy they have 
 no immediate interest. Financial pamphlets, it 
 has become familiar to remark, produce no im- 
 pression on the public mind. It is on this well- 
 known fact that our finance minister seems prin- 
 cipally to rely for the success of his measures. 
 For if once the generality of people of education 
 could be persuaded that they affect all the most
 
 10 
 
 valuable interests of life — that there is really no 
 mystery in the thing itself, (for after all it is 
 only a question of simple arithmetic, and the 
 whole difficulty consists in preserving an exact 
 method, and clearing away irrelevant matter 
 which obstructs the view, while the art of him who 
 is in the wrong on a question of accounts consists 
 in embarrassing and confounding the question and 
 hiding the simple truth,) they would doubtless ex- 
 ercise that independence of mind for which our 
 country is justly celebrated, and compel by the in- 
 fluence of public opinion that deference to truth 
 and justice, which is so conspicuous in every other 
 branch of our public administration. 
 
 It happens unfortunately too for such enquiries, 
 that men are apt to overlook the simplest and 
 most fundamental truths, merely because they are 
 elementary. The successive improvements which 
 are engrafted on the rude elements of any art, 
 by degrees engross all their attention, and impede 
 rather than assist the view, in case any derange- 
 ment or unexpected difficulty should occur which 
 calls for an examination of first principles. Dex- 
 terity in practice is by no means a criterion of 
 well-grounded knowledge. It is often acquired by 
 the very neglect of that knowledge ; the attention 
 which such knowledge demands being profitably 
 transferred to the rapid execution of measures
 
 11 
 
 really but not apparently connected with it. Thus 
 in all improved machinery, the operation would be 
 retarded if the workmen were continually reflect- 
 ing on the several principles of its construction, 
 and the connexion they have with the ultimate 
 effects produced. There is in fact no motive for 
 such mental exertion, and the end being not only 
 as well but even more expeditiously attained with- 
 out it, it soon is not only disregarded as useless, 
 but despised as pedantic. Hence it is that practical 
 men are of all others least qualified to judge of 
 new and unforeseen cases. Habit has already 
 with them superseded reflection : they come to the 
 consideration with minds preoccupied : and if be- 
 sides this their interests are involved, as they al- 
 ways are to a certain degree, in the question, there 
 is hardly any hope of a fair and impartial judg- 
 ment : for even the propositions of Euclid, says a 
 philosophical writer, would become subjects of con- 
 troversy, if the passions and interests of mankind 
 were affected by the result. 
 
 Notwithstanding, however, this prejudice in fa- 
 vour of practical opinions as opposed to theory, 
 I will venture to premise a few of the established 
 positions, however trite, on which the subsequent 
 reasoning is founded. 
 
 The great importance of a permanent standard, 
 as the instrument of commerce, as a common 
 c2
 
 12 
 
 measure, by which the value of all commodities 
 may be expressed, no one denies. Certain pro- 
 perties in what we call the precious metals seem 
 to have determined all mankind, from the earliest 
 ages, to adopt them in preference to other things 
 for this purpose. Besides their intrinsic value as 
 articles of luxury, they unite the requisites of being 
 portable, divisible, imperishable, distinguishable, 
 in a higher degree than any other substance. 
 Their quantity also is moderate, and not easily 
 increased : and hence arises that main property of 
 being less subject to variation in value than other 
 commodities. That they also are variable, as 
 well as other things, but in a much less degree, 
 was long ago observed by a profound and accurate 
 writer ^ This circumstance, arising in the world 
 at large from the indefinite increase in quantity to 
 which they are liable, disqualifies them indeed for 
 being a perfect instrument, but still leaves them 
 by far the best that can be employed for that use : 
 and the universal concurrence of mankind is deci- 
 sive testimony to this point. Their variation in 
 value in particular countries is of course owing to 
 the fluctuations of demand and supply, an evil 
 which has always a tendency to correct itself — and 
 
 r * n«(r^£< |ttev ei/v km) tSto to uvri' is yig ui) l<rcv ^vvecrxt' ofca^ dl 
 ^^XiToit f^huy fix>^M)i. Arist. Eth. Nicom. lib. v. cap. 5.
 
 13 
 
 which can never be excessive or even considerable 
 where mutual intercourse is uninterrupted. 
 
 It should here be observed, that admitting the 
 continual production of these metals to exceed the 
 wear and tear and loss and secretion, yet it by no 
 means follows that an absolute increase in quantity 
 would lessen their value. The principal demand 
 for them being for the purpose of money, in pro- 
 portion as mankind multiply and commerce is ex- 
 tended, this demand will be increased. It may 
 often exceed the supply, and thus raise their value, 
 as seems to have been the case for two or three 
 centuries before the discovery of America ; and 
 even now, if the art of commerce had not been 
 improved by the institution of banks, and the great 
 extension of credit, the annual supply from America 
 would probably have fallen far short of the increased 
 demand, in consequence of the spread of civilized 
 population over the face of the globe, and the great 
 increase of it in old countries. 
 
 The rapid depreciation of these metals after the 
 working of the mines in South America has be- 
 come a matter of trite remark. But there are cir- 
 cumstances attending it, more instructive and more 
 deserving the attention of a practical statesman 
 than the fact itself. I mean, the backwardness of 
 mankind in perceiving this fact, their unwillingness 
 to allow it, their proneness to account for the
 
 14 
 
 change of prices by every other cause than the 
 true one, the consequent unfairness and inequality 
 in all contracts made for a length of time, the dis- 
 turbance caused in the several relations of society, 
 the hardships and depressions of some, the ruin of 
 others, the difficulties thrown in the way of adjust- 
 ment, and the discord, reproach, vexation, and 
 anxiety which was thus spread through every de- 
 partment of life. 
 
 Whoever is conversant with the history of those 
 times, especially with that branch of history which 
 enters into the detail of life and manners, must 
 have had frequent opportunities of verifying these 
 remarks. They abound with complaints of the 
 increased dearness of provisions, and of all the 
 necessaries of life — of the rapacity of landlords, the 
 exactions of the clergy, the sufferings of the poor, 
 the pressure of public burdens, the extravagant 
 demands of all men for higher prices and for an 
 increase of wages. Even the literature of the 
 time, and the records of all our ancient institutions, 
 teem with incidental notices to the same effect. 
 The following passage from a sermon of Bishop 
 Latimer's may be taken as a specimen of the mode 
 of thinking on these matters, which continued till 
 the end of Queen Elizabeth's reign, about the close 
 of which the progress of depreciation received a 
 check, continuing nevertheless with a slow and
 
 15 
 
 scarcely perceptible pace through the whole of the 
 next century. 
 
 " Without too much we can get nothing. As 
 " for example, the phisition. If the poore man 
 " be diseased, he can have no help without too 
 " much : and of the lawyer, the poore man can get 
 *' no counsell, expedition, nor helpe in his matter, 
 ** except he give him too much. At marchaunts 
 *' handes, no kind of ware can be had, except we 
 " give for it too much. You landlords, you 
 " rentraisers, I may say, you steplordes, you un- 
 *' naturall lordes, you have for your possessions 
 " yearely too much. For that heere before went 
 " for 20/. or 40/. by yeare, (which is an honest 
 " portion to bee had gratis in one lordshippe, of 
 " another man's sweate and labour,) now it is let 
 ** for 50 or 100 pound by yeare. Of this too much 
 " commeth this monsterous and portentuous dearth 
 " made by man, notwithstanding God doth send 
 " us plentifully the fruites of the earth mercifully, 
 *' contrary unto our desertes. Notwithstanding 
 " too much, which these rich men have, causeth 
 " such dearth, that poore men (which live of their 
 " labour) cannot with the sweate of their face have 
 " a living, all kinde of victuals is so deare, pigs, 
 " geese, capons, chickens, egges, &c. These 
 " thinges with other are so unreasonably en- 
 " haunsed : and I think verily, that if this con-
 
 16^ 
 
 ** tinue, we shall at length be constrained to pay 
 *• for a pigge a pound." 
 
 We may sniile at the simplicity of this preacher, 
 and talk of the comparative ignorance of that age : 
 but the same effect precisely has been produced by 
 the same cause in our own times, and is invariably 
 produced whenever the value of money has under- 
 gone a rapid change. Man is naturally an egotist. 
 He classes, and estimates, and speaks of objects re- 
 latively to himself. Experience by degrees enables 
 us to combine facts, and to correct one observation 
 by another: but few who are busily engaged 
 in action attempt this : their impressions are formed 
 at the moment, and from these hasty inconsiderate 
 impressions habits of thinking and speaking arise, 
 which at length become inveterate, and are too 
 stubborn for correction : and it is not till we take 
 our stand at such a distance as to be no way af- 
 fected ourselves by the objects we contemplate, 
 that their true relation amongst each other is 
 discerned. 
 
 Thus even in the year 1773, when Dr. Johnson 
 travelled through the Highlands, he observes that 
 the people every where complain of the rapacity 
 of landlords, and the increasing dearness of pro- 
 visions, and of all articles of trade. Men will, 
 he remarks, persist in regarding money as the 
 fixed commodity, and all other things as variable ;
 
 17 
 
 whereas when a change of price like this gra- 
 dually pervades the market, it is plain that the 
 standard is variable, and not the things which are 
 measured by it, which keep for the most part 
 their relative values as measured by each other 
 unchanged. 
 
 The change of value which Dr. Johnson ob- 
 served in 1773 has been advancing regularly ever 
 since, and during the last twenty years with in- 
 creased velocity. Tliis is a fact placed beyond dis- 
 pute. Of the latter period I forbear at present to 
 speak, because the depreciation of our currency, as 
 peculiar to this country, is still disputed: and to 
 the consideration of that point I shall proceed, 
 when other preliminary matters are dispatched. 
 But down to the commencement of the war in 
 1793, a progressive depreciation of money had 
 been perceptible, shewing itself in a rise of prices, 
 and increase of rents, with the usual accompani- 
 ment of complaints at the growing avarice, ex- 
 tortion, and greediness of all classes of men. 
 
 Of the cause of this depreciation in our own age, 
 so strikingly parallel in its effects on society with 
 that of the sixteenth century, it may be as well 
 here to say a few words : and a few words, I trust, 
 will be sufficient to explain it. That a vast in- 
 crease of the circulating medium lessens the value 
 of any given part of that medium is universally 
 admitted : and hence we account for the former
 
 18 
 
 depreciation by the increased supply of the pre- 
 cious metals from the mines of America. Now 
 about the middle of the eighteenth century the 
 use of paper as a representative of coin was be- 
 coming very general. The banking system had 
 spread from London to all our chief commercial 
 towns ; till at length, in the year 1792, when per- 
 haps it had reached or even surpassed the acme of 
 a sound currency, every market town possessed its 
 bank, and all the larger payments, as well as a great 
 proportion of the ordinary payments of life, were 
 made in paper. The specie thus superseded had 
 not yet entirely found its way to foreign countries ; 
 and a large accumulation, with its consequent 
 depreciation, took place at home. It should be 
 observed too, that the banking system not only in- 
 creases the amount, but leads also to a lessened de- 
 mand of the circulating medium, by those modes of 
 economising its use, so well explained by Mr. Bosan- 
 quet'', which make 10,000/. perform the part of half 
 a million in the general settlement of mercantile 
 transactions in London. The same operation to 
 a certain degree is periodically performed in every 
 town which contains a number of banks : and its 
 effects are precisely the same as if an additional 
 quantity of money were kept in hand for these 
 purposes. If, for instance, a million of specie is 
 
 ^ Observations on the Report of the Bullion Committee^ 
 p. 45.
 
 19 
 
 required to circulate the wealth of a district, and 
 by means of improvement in commerce 200,000^. 
 which formerly was detained for answering these 
 mutual demands of merchants on each other, is 
 set at liberty, the effect on the value of the current 
 medium is the same as if its quantity had been 
 augmented to that amount. 
 
 What proportion the representative part of a cur- 
 rency may safely bear to the real, it is not perhaps 
 easy to ascertain ; so much depending on the ha- 
 bits of the people, who require long training before 
 they give entire confidence to such a mode of 
 payment : and even when the credit is entire, there 
 are many who prefer a tangible to an ideal form of 
 wealth. Some estimate may however be formed 
 from the opinion of Dr. Smith, who considers a 
 stock in hand equal to one third of its bills as quite 
 sufficient to maintain the credit of a bank. When 
 the first editions of his work appeared, the banking 
 system was comparatively new, although it had 
 already produced a sensible effect on our currency 
 by a general rise of prices. Whether this rise was 
 likely to continue is one of the points Dr. Smith 
 discusses, and which he determines in the nega- 
 tive ; probably not foreseeing the rapid and wide 
 extension of that paper circulation but of which it 
 spnmg. If then we adopt Dr. Smith's proportion 
 of paper to specie, viz. three to one, as constituting 
 D 2
 
 20 
 
 the creditable state of a single bank, and recollect 
 that banks, which in his time were few, had become 
 in the year 1792 almost universal, so that large 
 payments in specie were generally admitted to be 
 inconvenient, and seldom took place, we may 
 fairly conclude, that the whole circulating medium 
 of the country was increased at least in the ratio 
 of two to one in the course of little more than 
 forty years. If the substitution of paper for coin 
 were strictly universal, the ratio of three to one 
 would not be too large ; but I prefer the other, 
 both because the fact certainly was, that much 
 coin continued to circulate, and the average rise of 
 prices between the years 1750 and 1792 corre- 
 sponds pretty nearly with the proportion first slated. 
 Had the same substitution of paper prevailed 
 throughout the civilized world, there can be no 
 doubt 'but the depreciation of gold and silver 
 would soon have sunk to the same level ; the in- 
 troduction of this new medium being precisely 
 equivalent to a multiplication of the metals, with 
 this additional circumstance conspiring to sink its 
 value, that the labour and cost of production are 
 comparatively nothing. But it is well known that 
 we far outrun other nations in this species of 
 created wealth : accordingly much of our own 
 specie is only dislodged to swell the general cur- 
 rency of Europe ; and by mean?!' of this outlet the
 
 21 
 
 excessive accumulation at home has been counter- 
 acted. Still the public stock of the trading world 
 is so far augmented — the ratio of augmentation 
 being greatest in that country which always keeps 
 its circulation brimfull by this domestic manufacture 
 of money. 
 
 I say nothing of the other concurrent causes 
 which aided this depreciation, such as the pubhc 
 debt, and the expenditure of the American war ; 
 my object being now chiefly to point out the ne- 
 cessary effects of such a change upon the welfare 
 of society ; with the hope that if those evils which 
 I conceive to flow from it are admitted to be its 
 natural result, a strong effort may be made to op- 
 pose a system which aggravates those evils un- 
 necessarily, and finds its resources for discharging 
 past engagements in the perpetuation of this un- 
 natural state of things. The evils I am about to 
 enumerate are no ground of accusation against the 
 government under which they sprung. The rich 
 have been made poor — the creditor has been paid 
 off with less than he lent — the helpless annuitant 
 has sunk amidst the general rise — and he who sold 
 his land for what was deemed an equivalent, has 
 lived to see the price dwindled to less than half its 
 value. These with a thousand other grievances 
 cannot be imputed either to laws or ministers. 
 They are Involved in the very nature of the com-
 
 22 
 
 modity itself. Money was supposed to be un- 
 changeable in value, and property invested in that 
 form to be less variable in its nature, however pre- 
 carious its tenure, than in any other. The opinion 
 has been proved by unforeseen causes to be erro- 
 neous — causes for which no one is accountable, 
 and which no one could have anticipated ; and 
 those who acted under the error must abide by 
 their loss. But if such be the misfortune of per- 
 sons who cannot be blamed for their error, it still 
 becomes the part of a statesman to mitigate that 
 misfortune as far as lies in his power : certainly it 
 is his duty, not to heighten this inequality — not to 
 aggravate this unforeseen and unintentional in- 
 justice — not to throw himself into the scale against 
 the sufferer, to enrich the gainer and impoverish 
 the loser in this unfortunate traffic still more, by an 
 artificial depression of that commodity in which the 
 loser's property is invested, or by which his claims 
 are to be measured. That such is the necessary 
 effect of those financial measures and opinions 
 which Mr. Vansittart maintains, it shall be my 
 endeavour presently to demonstrate. But let us 
 first describe somewhat more in detail, what the 
 evils are which attend a rapid change in the value 
 of money, such as no man denies to have actually 
 happened, whatever his opinion of the cause may 
 be.
 
 23 
 
 Now the anxiety men have in all ages shewn to 
 obtain a fixed standard, and that remarkable agree- 
 ment of nations, dissimilar in all other customs, in 
 the use of one medium, on account of its superior 
 fitness for that purpose, is itself a convincing proof 
 how essential it is to our social interests. The 
 notion of its permanency, although it be conven- 
 tional and arbitrary, and liable in reality to many 
 causes of variation, yet had gained so firm a hold 
 on the minds of men, as to resemble in its effects 
 on their conduct that instinctive conviction of the 
 permanency of the laws of nature, which is the 
 foundation of all our reasoning. Not only their 
 private contracts, but the most important civil in- 
 stitutions, are built upon it. I need only instance 
 the qualification for a freeholder's vote, and the 
 limitations of five shillings and forty shilHngs in 
 our criminal law. Trained and encouraged in this 
 security by the highest authorities, by universal 
 practice, by the very structure of language which 
 bears the stamp of this belief durably impressed 
 upon it, men naturally contract for the future on 
 the same principles as they exchange for the pre- 
 sent. Their time, their services, their property 
 are engaged for distant terms at a stipulated price 
 in money. Others from various motives of con- 
 venience or necessity convert their lands and houses 
 into this more portable form, and find when they
 
 24 
 
 come to reinvest it, that it is no longer what it was, 
 and what it still professes to be. Parents divide 
 their property in what seems to be the most equi- 
 table proportion among their children ; who dis- 
 cover, when it is too late, that the intention is de- 
 feated, and the designed order cruelly inverted : 
 that those, who, as being less able to manage and 
 improve their portion, were especial' objects of care, 
 are in reality the least favoured ; and instead of 
 being better secured against the fluctuations of 
 commerce, are carried onward by a stream of uni- 
 form depreciation which they have no means of 
 counteracting, and the limit of which lies beyond 
 their view. 
 
 The answer which a political economist gives to 
 these complaints is, that the market naturally 
 adjusts itself to this change of value — that all pay- 
 ments, sooner or later, find their proper level- — 
 that in the mean time industry is quickened, and 
 improvement promoted by the profit which all 
 active dealers make even beyond their own calcula- 
 tions — that the mere nominal increase of price 
 operates as an incentive, and deceives men into 
 their own advantage — that in many cases the 
 advantage is real as well as nominal — that the 
 farmer who sells his produce for more than when 
 he took his farm, improves his land by the ex- 
 penditure of a larger capital — that all sellers, in
 
 25 
 
 short, gain, or appear to gain — and that the only 
 loser is the indolent proprietor of money, who is 
 altogether a buyer, and a seller of nothing. 
 
 To this statement several important considera- 
 tions must be opposed. In the first place, it admits 
 that the proprietor of money and the annuitant, a 
 large and in general a helpless class of the commu- 
 nity, have no share in the general redress. But 
 besides this, the correction itself comes tardily to 
 many and unequally to all. One of the ablest writer^ 
 indeed on this subject observes, that " a variation in 
 " price caused by an altered value of money is com- 
 ^^ mon at onceio all commodities '^." Tliis positioti 
 was not perhaps Intended to be taken literally ; for 
 the professed object of the work in which it occurs is, 
 to point out the ultimate effects of those variations 
 in the demand for labour which are for ever disturb- 
 ing the surface of life, disregarding in the mean tim6 
 all partial derangements, and the irregular intervals 
 at which the several corrections and adjustments 
 respectively take place. The fact undoubtedly is^, 
 that the altered value of money does not affect all 
 prices at the same time : but that wide intervals 
 occur, during which one class is compelled to bu}^ 
 dear while they sell cheap, and others have no 
 prospect whatever of indemnity, or of regaining 
 the relative position they once occupied. 
 
 * Ricardo on Political Economy, p. 577. 
 E
 
 26 
 
 In the direct bargaining of the market, it is 
 true, where demand and supply are the sole regu- 
 lators, where profit and loss are the only consi- 
 derations, and each dealer is independent of the 
 other, self-interest is sufficiently quicksighted to 
 protect itself; and nothing interferes either to 
 embarrass the view, or to check the natural ten- 
 dency towards a due adjustment of prices. But 
 in the intercourse of life, how numerous are the 
 transactions into which money enters only as one 
 ingredient of the compound ! The moment indeed 
 we quit the shop or the market, all our payments 
 are mingled up with a thousand feelings more or 
 less foreign to the commercial principle — feelings 
 of respect, of delicacy, of forbearance, of affection, 
 of friendship, of gratitude, of duty, which abhor 
 the language of traffic, and studiously exclude it, 
 as far as human affairs will permit, from their 
 communion. It is needless to dwell upon the 
 well-known fact, that all men of liberal and culti- 
 vated minds shun this species of negociation be- 
 tween themselves, that they abridge and evade it 
 if. possible, and throw it off upon some inter- 
 mediate or professional agent. The permanency 
 of a standard relieves the irksomeness of such 
 arrangements, by the promise it gives, that they 
 cannot often return : but when this standard by 
 its variation silently undermines the very principle
 
 27 
 
 of the agreement, a continual repetition and cor- 
 rection of these painful dealings is rendered ne- 
 cessary — dealings so much the more painful in 
 their correction than in their first settlement, be- 
 cause opinions vary about the reality of the change, 
 or its amount, or its probable duration : and much 
 injustice is endured from various motives, before 
 the remedy is obtained, or even applied for ; while 
 in the mean time the current of private life, which 
 ought most to be protected from such agitations, 
 is ruffled and disturbed by suppressed discontent, 
 or by discussions and altercations still more un- 
 friendly to social happiness. 
 
 If an example should be required, on an ex- 
 tended scale, let me draw your attention to the 
 composition for tithes between a Rector and his 
 parishioners — a mode of settlement which for the 
 sake of peace, of mutual convenience, and of pro- 
 fessional character, it is most desirable to preserve 
 undisturbed. Yet as the standard of value changes, 
 these agreements require to be perpetually recti- 
 fied, and made conformable to the change. Is it 
 to be wondered, that in that class of life, the payer 
 should be still more obstinately blind to the ne- 
 cessity of a change, than in more liberal callings — 
 that under prejudices of early habit, cooperating 
 with his interest, and confirmed by the potent spell 
 of names continuing the same, although the nature 
 E 2
 
 28 
 
 of the thing is changed, it should be difficult to per- 
 suade him that his pastor does not really demand 
 more than his predecessor enjoyed ? Persuasion in- 
 deed in such cases is always hopeless : the demand 
 is resisted as long as it can ; and when enforced is 
 paid with reluctance, and too often followed by 
 murmurs and reproach ; while at each successive 
 operation of the same kind, fresh irritation is pro- 
 duced, and a general ferment and exasperation 
 pevyades a community, which ought to be the 
 residence of harmony and mutual good-will. 
 
 These considerations, however they may be de- 
 spised by some statesmen, you. Sir, I am persuaded, 
 will not deem beneath your notice. But the evil 
 is yet more apparent, if viewed in the case of those 
 who are not restrained by delicacy from advancing 
 (heir claims, but whose situation is so dependent, 
 or their interests so entangled, that they must ac- 
 quiesce in the unfairness, for fear of incurring 
 some greater loss. The superior may be peti- 
 tioned, but he cannot be threatened into equity. 
 The competition of the market offers no resource 
 here. If the claim is not allowed, secret dissatis- 
 faction there may be, but absolute submission must 
 be the consequence of refusal. Among the end- 
 less variety of cases which this class comprehends, 
 it will be sufficient to mention one, and that a pro- 
 minent example, the case of stipendiary curacies.
 
 29 
 
 That these stipends did not rise in proportion to 
 the income of benefices is perfectly notorious — 
 that in most instances they fell short of that pro- 
 portion by one half is my firm belief, founded upon 
 pretty extensive enquiry: and if the legislature 
 had not opportunely interposed, there is reason to 
 think, from the opposition raised against the mea- 
 sure, that to this day the evil would have existed 
 in full force, and that at least a generation must 
 have passed away before the remedy would have 
 overtaken it. 
 
 The same principle is observable even in trans- 
 actions which partake more of tiie character of 
 trade, and in which therefore competition alone may 
 be supposed to regulate the market. All commo- 
 dities do not obtain the advanced price at once. In 
 what order they succeed one another, it may not be 
 easy to determine; and much depends upon local and 
 accidental causes ; but in general it may be affirmed, 
 first, that the necessaries of life ol)tain it before the 
 superfluities— and secondly, that he who can with- 
 hold his commodity, or dispose of it where he pleases, 
 obtains the advance before him who must bring it at 
 once to a given market. These are positions, the 
 truth of which I apprehend will hardly be called in 
 question. While the prejudice continues, which is 
 one of the last that leaves the generality of men, that 
 things are dearer, and that they must contract their 
 expences, the saving is of course n^.ade on the super-
 
 30 
 
 fluities of life— and the dealers in these superfluities 
 finding the demand lessened, are thus induced, if 
 they cannot afford to wait for better times, to lower 
 rather than to advance the price. On the other 
 hand, the man who can afford to keep back his 
 wares, will naturally be inclined to do so, in order 
 that his own trade may partake in the general ad- 
 vance of prices, which will in time reach him as 
 well as the rest. 
 
 Now both these principles bear with accumu- 
 lated force upon the class of labourers, more 
 especially, for a reason which will presently be ex- 
 plained, upon the class of agricultural labourers. 
 The things which they have to buy are the neces- 
 saries of life, and the only commodity they have to 
 sell, their labour, it is impossible they should keep 
 back. They come into the market therefore with 
 a double disadvantage, and the effect is invariably 
 found to correspond with this disadvantage ^. A 
 depreciation of the currency always depresses the 
 lower classes. They must buy, and they must sell, 
 and that immediately. The parties with whom 
 they deal are intent upon gain. To drive a bar- 
 gain is the business of their life, and they will not 
 fail to employ the advantage thus thrown into their 
 
 ^ Dr. Franklin somewhere observes, that his countrymen 
 say there is 10 per cent, difference between Will you buy ? 
 and Will you sell ? This difference is unfortunately doubled 
 to the labourer, when money falls in value.
 
 31 
 
 hands. Besides which, it is easy to persuade 
 themselves, and even the workmen they employ, 
 that the high price of provisions is a temporary 
 evil — that it must be borne accordingly — that they 
 ought patiently to wait for better times. In the 
 mean time the labourer is by degrees inured to a 
 harder condition of life ; to inferior food, lodging, 
 and clothing. With his habits of living, his ha- 
 bits of thinking also undergo a change ; and many 
 of those comforts which formerly belonged to his 
 station, being found to be no longer strictly neces- 
 sary, are by degrees forgotten. In this manner, 
 unless an extraordinary demand for labour comes 
 to his aid, his condition is permanently and irre- 
 coverably degraded. 
 
 That such is the natural course of things ap- 
 pears not only from theory, and the experience of 
 our own times : perhaps the most unexceptionable 
 authority I can produce to the same point is that 
 of a writer, certainly well acquainted with the history 
 of those countries of which he speaks, but who is 
 far from making that application of the facts he 
 adduces which is here designed. 
 
 " The great and rapid increase of national 
 " wealth has always been attended by a correspond- 
 " ent pressure of distress upon the peasantry. It 
 '' was thus in Portugal, when Joam III. succeeded 
 " his father Emanuel, the most fortunate prince 
 " that ever sat upon a European throne : he was
 
 32 
 
 " master of Ormuz, of Goa, and of Malacca in the 
 " East, thus commanding the whole trade of the 
 " Indian seas ; the gold mines of Africa sent in 
 *' rich returns to him, and the greater part of 
 " Morocco paid him tribute : to these treasures 
 " Joam III. succeeded, and never was there a pe- 
 '' riod of greater national distress arising from po- 
 " verty than at the commencement of his reign. 
 " It was thus in Spain, when ships came laden with 
 " silver and gold from Mexico and Peru ; the fact 
 " was distinctly seen, and the cause distinctly 
 " stated by a contemporary writer '' : the influx of 
 " specie produced a diminution in the value of 
 " money, and habits of lavish expenditure in the 
 " rich : rents were raised ; all the necessaries of 
 ** Hfe advanced in price ; the burden fell upon the 
 '' poor ; and of the wealth which poured into the 
 " country in full streams, all that reached them 
 " was in the shape of more abundant alms, which 
 " made them more dependent than they were be- 
 " fore, without preventing them from being more 
 " miserable ^" 
 
 A diligent enquiry into the state of society 
 during the reign of Elizabeth, which in the depre- 
 ciation of money corresponds remarkably with the 
 present reign, would corroborate this position, by 
 
 ^ The Inca Garcilasso, vol. ii. book 1. c. 7. quoted in the 
 Quarterly Review, vol. xv. p. 192. 
 *^ Quarterly Review, ibid.
 
 33 
 
 shewing how ill the wages of labour kept pace with 
 the increasing price of provisions. It is, I believe, 
 allowed by all who have made minute researches 
 into those times, that at no period of our history 
 till the present was the condition of the labourer 
 so bad. Hence sprung the great and almost 
 sudden growth of the poor-law system, sometimes 
 absurdly attributed to the suppression of mo- 
 nasteries. A violent disturbance of the established 
 relations, as measured by the common standard of 
 money, had taken place; and the lower classes 
 being the last to obtain redress, sunk into that 
 state of abject dependence, from which they slowly 
 emerged through the natural corrective of a; dimi- 
 nished population, aided by the general improve- 
 ment of the next century, and the greater steadi- 
 ness of our currency ; but into which they are now 
 again plunged by the operation of a similar cause. 
 It is the intimate connexion of this fact with 
 the much agitated question of the poor laws, that 
 gives it a commanding claim on the attention of 
 the legislature : a connexion, which, notwith- 
 standing the able and varied discussion that sub- 
 ject has undergone, seems to have attracted less 
 notice than its importance deserves. It is, I be- 
 lieve, by far the most powerful of those causes 
 which have brought the disease to a crisis, and 
 alarmed us all into an anxiety about the remedy. 
 
 F
 
 34 
 
 Much harm has doubtless been done by the false 
 humanity of a recent law, which exempts the re- 
 ceiver of parochial relief from the wholesome ter- 
 rors of a workhouse ; and whatever is done to- 
 wards a mitigation of the evil, all parties seem to 
 be agreed on the necessity of returning to greater 
 rigour in the general execution of the system. But 
 it can hardly be imagined, that a system radically 
 vicious, tending, as the universal voice of the 
 country proclaims, to corrupt, impoverish, degrade, 
 and disorganize society, should have been in full 
 vigour, above two centuries, and yet not bring forth 
 its baleful fruit till within the last thirty years, un- 
 less there had been something peculiar to this 
 latter period, which fostered the evil, arid drew 
 out its latent venom. For it cannot be denied, 
 that its growth has been progi'essive during the 
 whole period of the late war with France — a period 
 not of inactivity and stagnation, but of boundless 
 exertion of every kind. The cessation of this 
 demand for labour has undoubtedly thrown a 
 larger burden than ever on the parish funds ; but 
 long before the peace, the agricultural parishes 
 especially had felt the rapid progress of that intes- 
 tine mischief preying upon their vitals. 
 
 An investigation of the cause why the agricul- 
 tural districts laboured under this pressure first, 
 and still suffer more severely than the others, will
 
 35 
 
 tend to prove yet more forcibly the connexion that 
 subsists between it and the depreciation of money. 
 It was before observed, that the wages of labour 
 always follow at a very unequal pace the advance- 
 ment of prices. Pure theory inculcates the na- 
 tural and necessary tendency towards an equitable 
 adjustment ; it leaves the intermediate difficulties 
 and delays out of the question, as frictions in a 
 mechanical problem ; and justly condemns the 
 folly of attempting to rectify the inequality by law. 
 But laws, though they cannot rectify, yet may 
 aggravate what is amiss, and retard the cure : and 
 those very frictions and disturbing forces may pos- 
 sibly by care and skill be diminished ; at any rate 
 they deserve attentive study, as tending to illus- 
 trate the principles on which the several phenomena 
 depend. 
 
 Thus the labour of the manufacturer is a trans- 
 ferable stock compared with that of the husband- 
 man. Occasional competition instructs the owner 
 in its value, and it circulates with freedom through 
 those districts where it is most wanted. In other 
 words, the manufacturing labourer has his choice 
 of a market, and of course he obtains his price 
 sooner, than the husbandman who is practically 
 confined to a single spot, and for whose labour 
 there cannot be that free competition which the 
 commercial theory supposes. The local influence
 
 36 
 
 too under which he acts, removes him still farther 
 from the condition of the vender of a commodity, 
 under which relation that theory regards him. 
 The consequence is (what experience abundantly 
 testifies) that every expedient is resorted to by his 
 employer before that of a permanent rise of 
 wages : and as the labourer cannot defer the bar- 
 gain, he submits to conditions really more and 
 more rigorous, passing indeed under the same or 
 even a higher denomination, and deriving addi- 
 tional facility from this very disguise. At length 
 recourse is had to the poor-rate to supply the grow- 
 ing deficiency : and when once that store is opened, 
 not for medicine but for food, there is no limit to 
 the use made of it : the employer, as may easily 
 be shewn, having strong motives of interest as well 
 as of sordid habit to repair to it, and the labourer, 
 with broken spirits and conscious impotence, 
 being flattered also by the apparent security against 
 absolute starvation which such an indefinite re- 
 source offers to his mind. 
 
 Among the subordinate causes that conspire 
 towards this melancholy result is the fact, which 
 appears to be well established'*, that a rise in 
 wages is a diminution not of rent, but of profits. 
 Whatever is theoretically true we may be sure is 
 
 ** See Ricardo on Political Economy, chap. 14.
 
 37 
 
 really acted upon by the interested party, however 
 unconscious he may be of the abstract principle, 
 and even unable to comprehend it : and hence 
 another motive is for ever operating with the 
 farmer to keep down the price of labour, and to 
 pay it as far as he can out of the parish fund. On 
 the evils and iniquity of this practice, which has aU 
 ready struck deep root in many large districts of 
 the kingdom, I forbear now to insist ; my present 
 object being solely to point out their close and ne- 
 cessary connexion with the depreciation of our cur- 
 rency. How they may best be corrected or alle- 
 viated, Parliament will of course make the object 
 of its gi-avest deliberation. The age is too en- 
 lightened to think that a regulation of wages by 
 law can give effectual relief; that Government can 
 create food, or a demand for labour ; but Govern-* 
 ment may remove many obstacles to that principle 
 of self- correction which the analogy of nature 
 teaches us is the universal law of her constitution. 
 
 Neither have we any right to complain of 
 that progressive depreciation which is the na- 
 tural result of the causes before enumerated, and a 
 liability to which, however unsuspected, was really 
 involved from the first in the very nature of money. 
 But the important inference is, and it is that to 
 which the remainder of my Letter will be directed, 
 that if such be the consequences of depreciation.
 
 38 
 
 any artificial^ any superfluous, any arbitrary and 
 coercive depreciation is one of the worst and most 
 unjust measures which can be inflicted upon the 
 country. If Government cannot stem the torrent, 
 let them at least not add to its force by pouring 
 fresh streams into the channel, and by obstructing 
 those natural outlets through which the over- 
 charged waters are struggling to make their way, 
 and to find their proper level. 
 
 In entering upon this part of my subject, it is 
 painful to think, how much of what is obvious and 
 familiar, not only to yourself, but to every man of 
 liberal education, must be repeated in order that 
 the points in dispute may be fairly laid before 
 the reader. The necessity indeed arises from 
 a cause which only the evidence of facts could 
 force on our belief : that positions so elementary, 
 theorems so long established, should have been 
 required to give way before a novel expedient, 
 confessedly adopted under the pressure of an 
 unparalleled emergency. To this measure of 
 temporary policy the science of ages and the 
 plainest dictates of common sense are required to 
 yield. It is not a compliance of the will, but a 
 surrender of the understanding, that alone will 
 satisfy the advocates of this measure. They de- 
 fend it not as necessary, but as no violation of
 
 39 
 
 legitimate theory. They deny that any evil has 
 arisen from this innovation, and yet with mar- 
 vellous inconsistency profess a disposition, and 
 even an eagerness, to return to the ancient course. 
 This, I confess, is not the least of those paradoxes 
 which rest on the authority of the present Chan- 
 cellor of the Exchequer. He stoutly denies that 
 bank paper, and consequently the whole currency 
 of the country, is depreciated. Yet he declares 
 that it is expedient to resume cash-payments as 
 soon as it can be done with safety. If there is no 
 depreciation of the currency, why is it expedient ? 
 The larger the proportion of paper in our currency, 
 provided that paper is equivalent to specie, the 
 better. The quantity of undepreciated paper we 
 can keep afloat in the market is the very test of the 
 buoyancy of our credit — a sure token of public pros- 
 perity—an index of the amount of displaced Specie, 
 which is employed to advantage somewhere else. 
 The only benefit proposed, by making it con- 
 vertible at the will of the holder, is, that depre- 
 ciation may never take place ; this natural check 
 being fully adequate without any officious vigilance, 
 or any positive enactments on the part of Govern- 
 ment, to controul it. But when this check is 
 wanting, there is no security against such an ex- 
 cess as shall cause depreciation : and the only 
 proof that such a depreciation has taken place is
 
 40 
 
 either the desire of men at home to obtain specie 
 rather than paper ^ and their readiness to exchange 
 paper for it at a nominal loss ; or, the estimation 
 in which our currency is held abroad being lower 
 than it would be if it consisted of specie or of 
 j)aper convertible into specie. 
 
 Both these proofs were offered by the Bullion 
 Committee in 1811, and both were rejected by 
 Mr. Vansittart; the first as not founded in fact, 
 the second as not conclusive if true. 
 
 Many other points of subordinate importance 
 were contested in the course of this discussion, 
 soitie of which I shall have occasion to bring again 
 to your notice, partly as conducive to the main 
 argument, but principally to illustrate the mode of 
 reasoning to which the Finance Minister has re- 
 sorted, and to put it plainly before the public, 
 whether measures which require such reasoning 
 can be well-founded; or whether, if they can be 
 better supported, the advocate, who has abandoned 
 the better ground and taken up this, can be safely 
 entrusted with the guardianship not only of the 
 public revenue, but of the good faith and honour 
 of the country,' which are deeply involved in all 
 these transactions. 
 
 The argument of Mr. Vansittart's opponents 
 was built upon the following simple maxims. 
 
 That the legal coin of the country consists of gold
 
 41 
 
 and silver of a certain weight and fineness, one pound 
 of gold being coined into forty-four guineas and a 
 half, and one pound of silver (till the late regulation) 
 into sixty-two shillings, and that the impress of 
 the Mint is an assurance to the public that these 
 proportions have been observed. 
 
 That a pound sterling is either twenty of such 
 shillings, or tt of one of such guineas. 
 
 That bank paper is a promissory engagement to 
 pay to the bearer the full nominal amount ex- 
 pressed on the bill, in the legal coin of the coun- 
 try, when demanded. 
 
 That if the bank will not so pay the full amount, 
 and if the holder cannot obtain the full amount of 
 legal coin in exchange from other people, but only 
 a less quantity than is there expressed, bank paper 
 is depreciated in the estimation of the other party. 
 
 That if the holder is willing to exchange his 
 paper at this disadvantage, it is depreciated in his 
 own estimation. 
 
 That transactions of this kind to a great extent 
 are carried on through the country. 
 
 That the general disappearance of specie, which 
 is undeniable, is a proof that there is a profit in 
 sending it abroad : and that the laws which pro- 
 hibit exportation of coin are wholly inefficient. 
 
 To these simple elements respecting the nature
 
 42 
 
 of CURRENCY, a few must be subjoined on the na- 
 ture of EXCHANGE. 
 
 As every country has a common measure of its 
 own applicable to all traffic within that country, so 
 in traffic with other countries a common measure 
 is obtained by settling the relative value of the cur- 
 rency of each country one with another. 
 
 This relative value depends on the quantity of 
 precious metals contained in their respective cur- 
 rencies : any given amount of the currency of one 
 country which contains the same quantity of bul- 
 lion with a given amount of the currency of an- 
 other country, is equivalent to it, and constitutes 
 what is called the par of exchange. 
 
 If the aforesaid amount in one country should 
 have its intrinsic value lessened, the par of ex- 
 change will be altered, and a proportionably larger 
 quantity of that currency will be required to re- 
 store the equality. 
 
 Notwithstanding the par of exchange, yet from 
 various causes bills payable in the currency of 
 one country have a temporary value greater or less 
 than bills of corresponding amount payable in 
 the currency of another country : that is, they are 
 either above or below par. 
 
 The exchange is said to be in favour of that 
 country whose bills bear a premium, and against
 
 43 
 
 that country whose bills are at a discount. The 
 holder of bills which bear a discount is however 
 generally content to abide by the loss, rather than 
 actually fetch the bullion from that country in 
 whose currency the bill is payable at par — but 
 when the loss would be considerable,, so as to ex- 
 ceed the expence of transmitting bullion, he will 
 fetch it. In other words, he will send the bill to 
 that country with an order to lay it out in bullion 
 to be consigned to him. 
 
 In practical questions of this kind, the case is 
 stated, for the sake of perspicuity, with greater sim- 
 pUcity than occurs in real life. The dramatis pei'- 
 soncBy if I may be allowed the illustration, are as 
 few as possible, in order that the elements of the 
 plot may be more distinctly seen. And if one or 
 two individuals only were concerned, as the case 
 adduced seems to represent, we might suspect a 
 variety of motives to operate that might obstruct 
 the regular execution of these proceedings, or even 
 the actual advancement of their own interests. 
 But these transactions are in reality conducted on 
 a grand scale : a numerous class of intermediate 
 agents make it the sole business of their lives to 
 watch the relative value of bills, which is for ever 
 fluctuating, and to derive profit from the ex- 
 change, at the same time that the real holder is 
 accommodated by having the affair taken off liis 
 g2
 
 44 
 
 own hands. The Intercourse thus maintained even 
 in tioie of war between all commercial countries is 
 active and regular : and we may as well suppose, 
 that in a traffic open to all men between London and 
 Liverpool, one man would long be allowed to make 
 exorbitant gains arising from a commodity which 
 he buys publicly in one place and sells in the other, 
 as that the same people would be suffered without 
 competition to send bullion from a country where 
 it is bought at jnir, to be exchanged for bills in 
 another at an enormous profit, far exceeding the 
 cost and risk of transmission. We assume it 
 therefore as an element in our reasoning, (profit 
 being the sole principle of commercial dealings, 
 and a free competition existing among a multitude 
 of intelligent people all intent upon the same ob- 
 ject,) that the profit cannot long be so great on the 
 exchange of a bill as to exceed the cost of the 
 transmission of bullion. This cost, even in time 
 of war, when freight as well as insurance is dear- 
 est, has been found between London and Ham- 
 burgh never to exceed 7 per cent. The same 
 must be regarded therefore as the limit to the 
 unfavourable rate of exchange even in the worst 
 times : for if it long exceed that measure, it must 
 induce dealers either to buy up the bills for the 
 purpose of sending them to their own couptry, to 
 be changed into bullion ; or it must induce the
 
 45 
 
 holders of bullion in that country to send it abroad 
 to buy up these bills at so great an advantage. In 
 either case the competition must be so great (al- 
 ways increasing in proportion to the profit) as 
 speedily to reduce the traffic within the limits above 
 mentioned. 
 
 In a traffic of this sort too, the level is found 
 almost immediately. Other commodities require 
 some time to produce them — and the fortunate 
 holder of large quantities may make great profits 
 before an adequate competition can grow up : 
 but in these the time and labour required for the 
 production count for nothing. The commodity is 
 always afloat, waiting only the impulse of profit to 
 determine its direction to the best market. 
 
 It is common indeed to represent the balance of 
 payments between two countries, or that amount 
 by which the exports of one exceed in value its 
 imports from another, as actually made in bullion. 
 But this is not the fact ; and it is material to shew 
 it, as Mr. Huskisson has done *", in his valuable 
 treatise on the Depreciation of our Currency, 
 There is in fact no such thing as a final settlement 
 between two countries at the end of a year, and a 
 balance struck as between two individual dealers : 
 the dealing always goes on, the low rate of ex- 
 
 * Question concerning Depreciation, p. 49 — ^^53.
 
 46 
 
 change naturally drawing goods from the country 
 whose bills are at a discount to redeem those bills, 
 or to.pay off that debt which is denoted by a fall 
 in their bills, and checking the importation of them 
 while t^he discount continues. There is thus a 
 continual tendency to restore the equilibrium : and 
 in a natural state of things, the oscillation never 
 departs far from the mean : if it does, its great 
 excess receives an instant check by the actual 
 transmission of bullion ; which is a commodity 
 always set in motion by the slightest advantage at- 
 tending it, being the most portable, and requiring 
 less preparation than any other, and being the least 
 liable to risk from the caprice of custom. 
 
 Another point assumed in this reasoning is, that 
 bullion and coin are virtually the same thing in all 
 such transactions. To the foreign merchant the 
 matter not theybrm of the commodity constitutes 
 its value. To him a pound of coined gold will not 
 be worth more than a pound of gold in bars. At 
 home however it may be thought there is some 
 difference : and undoubtedly for home use, the 
 coin is preferable, and its value is slightly increased 
 by having passed through the Mint. This increase 
 of value has enabled many countries to take what 
 is called a seignorage or toll at the Mint: that is, 
 he who carries gold to be coined receives back 
 from the Mint something less than he brought, in
 
 47 
 
 consideration of the increased value thus given to 
 the commodity. In our own Mint this practice 
 does not prevail : the same quantity precisely is 
 delivered out coined, which was brought uncoined ; 
 the only loss the owner sustains by the process 
 being that of the interest of the money during the 
 delay of coinage. It should seem therefore that 
 bullion with us can never be long below its value 
 in coin, i. e. below what is technically called the 
 Mint price ; because it is so easily convertible at 
 the will of the owner into the more valuable form. 
 
 But it may be said, that bullion will often be 
 above the Mint price, because when once turned 
 into coin it is, as it were, imprisoned : it can neither 
 legally be turned back into the form of bullion, nor 
 legally be exported. Such undoubtedly is the law 
 of the land. But there is no fact more certain, than 
 that these laws are wholly inefficient whenever a 
 profit attends the violation of them. No man of 
 the slightest experience or knowledge in mercantile 
 affairs is ignorant of the fact: no man, except for 
 the sake of argument, supposes it to be otherwise. 
 Ties of law, and even of religion, it is perfectly 
 notorious, are altogether useless. If the coin is 
 not smuggled abroad, it is melted into bars, and 
 sworn off as foreign gold for exportation. Large 
 dealings, limited only by the demands of trade.
 
 48 
 
 of both kinds take place : and although there is no 
 doubt that clandestine exportation is the main 
 channel through which the traffic is carried on, yet 
 the form of an oath for the purpose of rendering 
 melted coin legally exportable is too well known 
 to be but a slight obstacle — an obstacle reducible, 
 like all other matters of trade, to an average ex- 
 pressed in money. Practically therefore it cannot 
 interfere with the correctness of our conclusions, 
 whenever the profit of sending bullion abroad is 
 such as to exceed that average, which has never 
 been rated at more than 5 per cent. : and the 
 clandestine exportation of coin which involves no 
 perjury, but merely runs the risk of seizure, is 
 practised to a much greater extent. 
 
 Now itwas proved during the enquiry made by the 
 Bullion Committee, that foreign exchanges had for 
 a long time been permanently unfavourable to this 
 country, in a degree far exceeding the limit above 
 mentioned, namely, the cost of remitting bullion, 
 and which by practical men was stated to be rarely 
 more than 5 per cent, even in time of war. In 
 the case of Hamburgh in particular, the exchange 
 had been as low as 29.8, which denotes a loss of 
 about 17 per cent. : and for a long time previous 
 to the enquiry, the discount, although varying, 
 might be fairly taken at 15 per cent.
 
 49 
 
 The argument therefore for the depreciation of 
 our currency was simple and clear. As the 
 sending of bullion to Hamburgh would save this 
 discount, and the expense of sending never at 
 the utmost exceeded 7 per cent, a merchant would 
 naturally have recourse to that mode of pay- 
 ment rather than suffer so great a loss. But if 
 he attempted to do so, he found that to buy 
 bullion in England with bank paper would involve 
 him in as great a loss as the discount of his bill. 
 For instance, that to obtain bullion equal in weight 
 to 100 guineas, he must give bank notes to the 
 amount of 112, 1 15, or even 120 guineas, accord- 
 ing as the case might be. This then was another 
 measure of the depreciation of the paper as com- 
 pared with coin: for no one pretends that 112, 
 1 15, or 120 guineas in specie would ever be given 
 to procure gold equal only to 100 guineas ^ 
 
 *" It should always be remembered that the depression of 
 the exchange is not proposed as a sole test of the depre- 
 ciation of currency. There being two causes which regulate 
 the exchange, viz. the balance of payments, and the intrinsic 
 value of the currency, these may operate either in con- 
 junction or in opposition to each other. In the first case, 
 the rate of exchange will be as tlieir sum, in the second as 
 their difference. If for instance the balance of payments be 
 4 per cent, against us, and the currency also depreciated 
 4 per cent, the depression of the exchange will be 8 per cent. 
 If the balance of payments be 4 per cent, in our favour, and 
 II
 
 50 
 
 The reasoning of Mr. Vanslttart against this 
 argument is curious. He does not deny that if 
 guineas were to be had, they would be sent out to 
 save this discount, but he reminds us that it would 
 not.be legal to do so. The fact is admitted on 
 all hands, that coin imll bf exported in such ft 
 state of things, and he himself states it, and reasons 
 upon it again and again : but he says it ought 
 not to be so, and seems to think this an answer 
 to the proof above adduced of the difference of 
 value in our paper and our coin. Paper cannot 
 purchase bullion except at a considerable loss. 
 Coin will purchase it at little or no loss. Coin 
 therefore is more valuable than paper. No, says 
 Mr. Vansittart, if the law were enforced, eoin 
 could not be so employed. But is the law en- 
 forced r Can it be enforced ? Mr. Vansittart him- 
 self shall answer : 
 
 " The Bank has sometimes been obliged to purchase 
 " gold at a considerable loss ; hut this has always hap- 
 
 the currency depreci.ited as before, the quantities will neu- 
 tralize each other, and the exchange will be at par. If, lastly, 
 the balance of payments be 4 per cent, in our favour, but 
 the depreciation of currency 20 or 24 per cent, the de- 
 pression of the exchange will only be as l6 or 20 per cent. 
 In this manner the premium given in bank paper for 
 guineas, which often exceeded the nominal rate of exchange, 
 is easily accounted for ; the balance of payments, or the real 
 exchange, being at that time in our favour.
 
 51 
 
 " pened in consequence of the foreign demand for -gold 
 ** draining away our coin by clandestine exportation." 
 Speech on the Bullion Besohitions, 1811, p. 37. 
 
 " When bullion is a more advantageous mode of re- 
 " mittance than bills, gold bullion is sought after for 
 " exportation : exportable gold rises higher than that 
 *' which cannot be legally exported, and is first sent 
 *' abroad. A clandestine or fraudulent exportation oF 
 ** coin, or of ingots produced from coin, soon follows." 
 p. 39. 
 
 " Since 1809, a further depression of the exchange 
 " has taken place, and a greater quantity of coin has 
 *' gone out of the country." p. 50. 
 
 These passages all lie within a few pages of one 
 another. And yet in the same speech, Mr. Van- 
 sittart does not think it beneath himself to address 
 the following language to the House, and after- 
 wards, by means of the press, to the country at 
 large. 
 
 " Do the Committee then mean that the law will be 
 *' ineffectual, and that a real though clandestine ex- 
 " portation of coin will take place ? I will not do the 
 " Committee, I will not do the learned gentleman, the 
 " injustice of suspecting they can mean to countenance 
 " a system, which gives the illegal a decided advantage 
 ** ovet the fair dealer, which habituates and hardens 
 " the trader in the evasion and breach of the law ; 
 *' nay, which is carried on by direct fraud and perjury." 
 p. 5. 
 
 To affect all this moral sensibility about a fact 
 h2
 
 52 
 
 which is perfectly notorious — which is by every 
 writer on the subject assumed as necessary, and 
 incapable of being prevented — nay, which he him- 
 self for his own argument presently after assumes 
 and reasons upon — is something worse than solemn 
 mockery. The very term exchange indeed has no 
 meaning, except on the supposition of the trans- 
 action which is thus awfully deprecated. It is not 
 exchange of commodities, nor exchange of bills, but 
 exchange of the currency of one country for the cur- 
 rency of another, which the name originally imports 
 — which is the basis of all commerce between civi- 
 lized nations — and without which no intercourse 
 but that of barter could take place among them. 
 
 Let it be observed moreover, that for the sake 
 of heightening the glow of his description, Mr. 
 Vansittart calls the clandestine exportation of 
 coin a fraud. In what sense the word fraud 
 is here used I do not perfectly understand. When 
 melted coin is sworn off for exportation, most 
 probably there is perjury ; although even here 
 it by no means follows that the exporter knew 
 the gold to be melted down from coin : but in 
 the case of clandestine exportation, the revenue 
 is not defrauded: the gold runs the risk of seizure, 
 it is true, but no duty is withheld from Govern- 
 ment, and certainly no fraud is practised on indi- 
 viduals. To induce a man to take less than the
 
 53 
 
 value of his property under pretence of giving him 
 an equivalent, is much more like a fraudulent 
 transaction ; and the motto Alea frnus omnis 
 would better suit the author of such a measure, 
 than the imputation of fraud on those whom, he 
 tempts by an exorbitant profit to violate or evade 
 the law. 
 
 The whole however of Mr. Vansittart's argument 
 is built on this foundation : and he prevailed upon 
 the House of Commons to sanction it, by adopting a 
 resolution^ as contradictory to Mr. Horner's state- 
 ment, upon which in reality it has no bearing. 
 
 Mr. Horner had argued, that if bank paper was 
 worth as much as coin, it would buy gold as well as 
 coin : but bank paper could not be so employed ex- 
 cept at a great loss — as much as 15 or 20 per cent. 
 — while coin was so employed freely, and was itself 
 besides sent out of the kingdom instead of bullion 
 so rapidly, in consequence of this enormous profit, 
 that it had totally disappeared. 
 
 Mr. Vansittart's resolution declares, that in public 
 estinxation bank paper and coin are equivalent, ex- 
 cept where this ohject is in view : that is, excepting 
 
 ^ Resolved, Tliat the promissory notes of the said company 
 have hitherto been, and are at this time, held in public esti- 
 mation to be equivalent to the legal coin of the realm, and 
 generally accepted as such in all pecuniary transactions to 
 which such coin is lawfully applicable.
 
 54 
 
 ^he very proof which is offered of the point in 
 question. 
 
 By this time it had become perfectly notorious 
 that agents were employed in every town of the' 
 kingdom to collect guineas by offering a premium 
 in bank paper. A law had passed rendering the 
 transaction penal, and some convictions had taken 
 place.. The traffic however was not in the slightest 
 degree interrupted. The dealers collected gold 
 from tradesmen, who sold their goods at a cheaper 
 rate when paid in specie. The profit was thus 
 divided among several, according to the number of 
 hands through which the coin passed before ex- 
 portation — the nmin risk remaining only with the 
 exporter, while the intermediate dealings were 
 never brought to light except by spies and in- 
 formers. Of the fact, and of the motive for the 
 fact, there could be no doubt ^. 
 
 Yet Mr. Vansittart asks his opponents in Par- 
 liament whether they have ever found this differ- 
 eiice in price. No instances, he avers, have been 
 produced — therefore we are not to suppose there 
 
 5 " From tlie days of Locke till the present time I have 
 *' no where seen the fact disputed. It is by all writers indis- 
 *' criminately allowed, that no penalties can prevent the coin 
 " from being melted when its value as bullion becomes supe- 
 " rior to its value as coin." Rkardo's Reply to Bosanquet, 
 p. 42.
 
 55 
 
 were any. All the liquor has escaped, and the 
 cask is empty : yet if we cannot point out the leak, 
 we have no right to say that the vessel was defec- 
 tive. 
 
 But where is the candour of thus pressing th-e 
 argumentum ad kominem, when the question is 
 not whether the thing be creditable, but whether 
 it be done ? Individuals abstain from doing many 
 things perfectly lawful in foro conscienti(Ey but 
 which from various motives they do not choose to 
 engage in. Either it is not in their line of business, 
 or there is a prejudice, or a risk, or a trouble, or 
 an odium attending it. Money dealing is not the 
 most respectable calling, any more than dealing in 
 old clothes. But they may both be exercised with 
 a safe conscience : and even if we ourselves should 
 have scruples of conscience, yet if there are always 
 people to be found who do this work, where is the 
 use, where, I may say, is the honesty, of pretending 
 that it is not done as certainly and as regularly 
 as if we were engaged in it ourselves ? TVho does 
 it, is a point |:>erfectly indifferent to the argument. 
 
 The next ground Mr. Vansittart takes up is, 
 that the continuance of an unfavourable exchange 
 against a country, far exceeding the expense of 
 transmitting bullion, is no proof of a depreciated
 
 56 
 
 currency in that country : and lie abounds with 
 examples In which this anomalous mode of dealing, 
 according to him, prevailed. At a time when our 
 paper was convertible into specie at the will of the 
 holder, he contends that similar depressions of the 
 exchange have been known— that during Queen 
 Anne's wars, for eleven years together, the exchange 
 was depressed even to a loss of 12 and 13 per 
 cent, when the expense of conveying specie could 
 not amount to 3 per cent.'' — that for some 
 years after the American war the exchange with 
 Hamburgh continued from 5 to 8 per cent, against 
 England, when the expense of sending specie could 
 not have been more than 5 per cent.* — that 
 in 1760, the exchange between London and Ham- 
 burgh was near 8 per cent, in favour of London, 
 the expense of importing gold from Hamburgh 
 being little more than 3 per cent. : yet there was 
 no paper currency at Hamburgh at that time or 
 since ^. 
 
 " The very same y^«7'," however, continues Mr. 
 Vansittart, who seems to think the effect of his 
 argument heightened by contrast, " the very same 
 " year the exchange was in November 6 per cent. 
 " against Engl and." That the alteration should have 
 
 h Speech on the Bullion Resolutions^ p. 111. 
 
 » Ibid. p. 115. k Ibid, p. 19.
 
 57 
 
 taken place within a few months^ is as strong a 
 proof as could be desired of the soundness of the 
 principle we maintain. That excessive depression 
 naturally corrected itself: and the reaction was so 
 violent as to carry the excess to the other side ; 
 enormous gain having the natural effect of drawing 
 so many competitors, as for a short time to reverse 
 the market. 
 
 Indeed if a hundred such cases had been pro- 
 duced, in which, according to the statement, a great 
 profit presented itself by resorting to a simple and 
 common expedient, which however no one adopted 
 — if this relative position apparently continued for 
 several years between two of the greatest, most intel- 
 hgent, and most active trading cities in the world, 
 containing thousands of persons whose sole busi- 
 ness it is to make a profit by sending to each other 
 whatever commodity will find a good market, and to 
 whom nothing is more familiar than such transactions 
 — what would the conclusion of any reasonable man 
 be from such a representation ? Not surely that 
 disinterestedness, or apathy, or ignorance could 
 exist to such a degree — but that there must be some 
 inaccuracy or some defect in the statement— that 
 all the circumstances of the case were not before 
 him — that it was a problem to be solved, not a fact 
 to be recorded, and produced in evidence as occa- 
 sion miglit require, to illustrate the nature of com- 
 I
 
 58 
 
 merce nnd political economy. If the whole case 
 were thoroughly sifted, he would say, it would pro- 
 bably turn out that no profit could be derived from 
 the transaction, for if a profit to that extent could 
 be made, the transaction viust have taken place. 
 To suppose it otherwise, is to give up the great 
 and only fundamental principle on which all com- 
 mercial proceedings rest. To suppose that a mode 
 of dealing attended by loss would be preferred by 
 a merchant to one attended by profit, when both 
 are equally practicable, is a perfect absurdity — and 
 nothing can be more puerile than to support an 
 argument by such a case, however useful it might 
 be to propose it to a student in the theory and 
 practice of commerce as a problem for solution. 
 
 Yet not only Mr. Vansittart, but a merchant of 
 high character and abilities has resorted to the 
 same mode of reasoning. Mr. Bosanquet follows 
 up the whole of Mr. Vansittart's system, even to 
 the pbint of declaring that the standard of our 
 currency is that pound, whatever it may be, in 
 which Government pays the interest of the national 
 debt. At present I shall only produce, both as a 
 specimen of the reasoning of these gentlemen, and 
 of the mode of refutation that must be resorted 
 to, the case alledged by Mr. Bosanquet of an un- 
 favourable exchange with Hamburgh and with 
 Paris. As a single example, it may be worth while
 
 59 
 
 to state the case in some detail, together with Mr. 
 Ricardo's analysis of the riddle. 
 
 Mr. B. observes, that in the years 1/64 to 1768, 
 the exchange with Paris was 8 to 9 per cent. 
 against London — at the same time the exchange 
 with Hamburgh was during the whole period 2 to 
 6 per cent, in favour of London. Here then ap- 
 pears to be a profit of 12 to 14 per cent, for 
 the expence, in time of peace, of paying the debt 
 to Paris with gold from Hamburgh — at least 8 or 
 10 per cent, above what it would cost in fact. 
 Again, the exchange with Hamburgh in favour of 
 London continued several years such as to con- 
 stitute a premium after deducting all expences of 
 5 per cent, on the importation of gold into Eng- 
 land : yet the exchange was not rectified thereby. 
 Thirdly, in 1775, 6, and 7, the exchange with 
 Paris was 5, 6, 7, and 8 per cent, against London, 
 when half the amount would have conveyed gold 
 to Paris, and one fourth would have paid the debts 
 of Paris at Amsterdam. 
 
 Here Mr. B. leaves the problem, itnplying either 
 that merchants did not see the profit, or did not 
 regard it : whereas the only rational conclusion 
 from such a statement is, that there must be some 
 circumstances behind, which if known would ac- 
 count for the phenomenon upon the ordinary prin- 
 ciples of trade. Mr. Ricardo undertakes the in- 
 I 2
 
 60 
 
 vestigation, and by the aid of a clear intellect joined 
 to^' a perfect knowledge of mercantile affairs, un- 
 ravels the whole mystery. 
 
 As to the exchange between Hamburgh and Lon- 
 don, he shews, first, that Mushet's tables, on which 
 Mr. B. builds his calculation, are, by the author's 
 own confession in a subsequent edition, erroneous. 
 Instead of 33.8, the par, Mr. Mushet says, should 
 have been 34.1 li. Secondly, because gold is the 
 standard of this country and silver that of Ham- 
 burgh, and the relative value of gold and silver is 
 liable to variation, the par of exchange can never 
 be absolutely fixed : and upon examining the cases 
 in question, the difference arising from this cause 
 is found to have been full 3 per cent. — making the 
 real par 36. lA instead of 33.8, as stated in the 
 tables of Mushet's first edition. 
 
 Thirdly, this correction of the author's, on ac- 
 count of the par of silver against silver, Mr. Ricardo 
 finds upon consulting Kelly's table to be too low 
 by f per cent. 
 
 Fourthly, the tables Mr. B. has consulted make 
 no allowance for what is called usances, that is, 
 interest for 2^ months, which it has been the in- 
 variable custom to allow in bills drawn between 
 London and Hamburgh — making a further differ- 
 ence of 1 per cent. 
 
 The sum of these several corrections reduces the
 
 61 
 
 exchange within the limits supposed by the Bullion 
 Committee, namely, the expense of transmitting 
 bullion from one place to the other. By a similar 
 process the excess in the exchange between Paris 
 and London is shewn to be nominal and not real, 
 the French mint taking a seignorage of 8 per cent, 
 that is, raising the nominal above the real value of 
 the coin in that proportion ; which of course must 
 be struck off when it is considered as exchangeable, 
 with a foreign currency. 
 
 Another paradox, much vaunted by the mi- 
 nister, and supported like all the rest by Mr. 
 Bosanquet — viz. that gold has often been much 
 higher than the mint price for a long time toge- 
 ther, during a sound state of our currency, is 
 made to fall before the same rigorous and exact 
 investigation. But I forbear to enter any farther 
 into these computations — essential as they are to 
 the argument, and highly illustrative of the abilities 
 of the writer who stepped forward to vindicate the 
 truth. Only let me be permitted to remark, that 
 this mode of reasoning, once exposed in the way it 
 is, ought to divest its authors of all claim to our 
 confidence, and that even when the solution is not 
 at hand, yet the application of the principle above 
 mentioned, whenever it is applicable, ought in all 
 reason to be accepted as a sufficient demonstration. 
 Profit is in mercantile dealings, what gravitation
 
 62 
 
 is in the system of the universe : and no problem 
 is worth Hstening to, which supposes the absence 
 of that universal principle. 
 
 Before we quit the subject however, it may be 
 well to subjoin Mr. Ricardo's own reflections upon 
 Mr. Bosanquet's argument, which he has analyzed 
 with so much patience. 
 
 " I cannot help here observing, that it must 
 " excite astonishment, that a British merchant 
 " should seriously believe it possible, that, in time 
 '^ of peace, a net profit, after paying all expences, 
 "of from 10^ to 12i per cent, should have been 
 " made by the exportation of gold from Hamburgh 
 " to Paris during four years — a profit, which, from 
 " the quick returns, would have enabled any person 
 " engaging in such undertakings to have cleared 
 " more than 100 per cent, per annum on the 
 " capital employed ; and that too in a trade, the 
 '* slightest fluctuations of which are watched by a 
 " class of men proverbial for their shrewdness, 
 " and in which competition is carried to the greatest 
 
 " extent That facts such as these should be 
 
 " brought forward to invalidate a theory, the rea- 
 " sonableness of which is allowed, is a melancholy 
 " proof of the power of prejudice over very en- 
 " lightened minds." 
 
 The astonishment here expressed cannot exceed 
 my own, at reading in the speeches of a Chancellor
 
 63 
 
 of the Exchequer, puhlished by himself, a general 
 scarcity"^ of gold asserted, and offered as an ex- 
 planation of the high price of bullion in England, 
 as if gold were, like grain, a thing of annual con- 
 sumption and reproduction, and liable to he af- 
 fected by an unfavourable season ; or as if his 
 readers did not know that every commodity goes 
 to that market where it is most in demand — and 
 that where the laws of a country render it useless, 
 it will neither be brought to it nor remain there. 
 It was under the influence, I presume, of the same 
 counsels, that a gold coinage of sovereigns lately 
 took place— that people wondered at their leaving; 
 us almost as soon as sent into circulation — and 
 then suggested this as a proof that the time was 
 not yet come for a resumption of cash-payments. 
 Will the time ever come, if we wait till the stream 
 of commerce has ceased to flow in the channel of 
 profit ? 
 
 From the same high authority we are told also, 
 that " if our currency had in fact become of less 
 *' value, this circumstancecow/(/72o//?056i^/y haveoc- 
 " casioned a fall of the exchange" — and " thata di- 
 " minutionof the valu€ of currency at home may have 
 " the efl'ect of improving the exchange, but cannot 
 " by possibility depress it "" ;" doctrines, which 
 
 ' Speech on the Bullion Question, p. 22. 
 " Ibid. p. 34, 35.
 
 64 
 
 may be convenient for the purpose of forcing a 
 temporary measure on the public, but which no 
 man, one would think, who values his reputation as 
 a financier would wish to place on record and sub- 
 mit to their cooler judgment, as his deliberate 
 opinions. 
 
 They are convenient moreover as introductory 
 to the revival of a policy, often practised in ruder 
 times, but which for more than two centuries has not 
 been suggested in our own, that of a debasement of 
 the coinage. If ever attempted in this country, it 
 will of course be proposed under the more courtly 
 title of lowering the standard, hints of which have 
 certainly been thrown out by the advocates of our 
 paper-system, but which I trust there is yet public 
 virtue enough remaining in the country to reject 
 with indignation, if any minister should ever be so 
 hardy as to advise it. 
 
 That these fears are not wholly without founda- 
 tion will appear by adverting to the language Mr. 
 Vansittart has held on the subject of a legal stand- 
 ard, a part of his argument which deserves more 
 serious attention than has hitherto been given to 
 it, upon constitutional grounds as well as on the 
 common principles of justice and honour. 
 
 The first argument indeed against a fixed 
 standard may safely be left to the judgment of
 
 65 
 
 my readers, without any attempt at refutation. 
 Because the mint weight of a guinea is 5 dwts. 
 9i grs. but a guinea is considered by law to be good 
 currency till it is worn below 5 dwts. 8 grs., Mr. 
 Vansittart asks, Which am I to regard as the j^o'ecl 
 standard " ? a specimen of verbal cavilling, which 
 for the credit of his station had better have been 
 omitted, but which for the credit of one's own cause 
 it is always satisfactory to see on the adversary's 
 side. 
 
 Having established this notable position, that 
 " the legal coin of the country never possessed a 
 " value estimated by a fixed weight of gold or silver 
 " bullion "," he infers very logically that bank-notes 
 therefore, which represent this coin, never had a 
 standard value, and therefore cannot have lost it. 
 
 Perhaps I ought not to call this the ^rst argu- 
 ment, for I perceive a little before Mr. Vansittart 
 had contended that our silver currency also had no 
 standard, because for any sum not exceeding 25/. it 
 was legal tender however worn, and because of pay* 
 ments made in actual cash, at least 999 in 1000 
 are under that yalue. It is a good rule in reason- 
 ing to estimate arguments, as prudent men estimate 
 payments, pondere non numero—?i rule which 
 
 "Speech on t)ui Bullion Resolutions, p. 13. 
 " Ibid. p. 14. 
 
 K
 
 66 
 
 ought perhaps to have led to the disregard of this 
 passage altogether ; for I cannot believe that any 
 person seriously examining the question can accept 
 it as a proof or even a 'presumption that we have no 
 legal standard, because the law declares that in no 
 instance shall a gold coin fall below it more than 
 to a certain point, and because having provided that 
 small payments only shall be made in silver coin, 
 (which cannot therefore affect foreign exchanges,) 
 it does not specify the loss of weight which shall be 
 sufficient to stop their currency. Only let it^be 
 remembered that even in the case of silver coin, 
 it is more proper to say, that it is legal tender 
 however worn, than, as Mr. Vansittart says, at 
 whatever lu eight ; because the original weight, 
 even of them, is as fixed as any thing human can 
 be ; and no English coin was ever legally current 
 that did not first issue from the mint. 
 
 Having thus, to use his own words, " overturned 
 " the basis" of Mr. Horner's resolutions, Mr. Van- 
 sittart declares himself prepared to prove, in oppo- 
 sition to the doctrine of a fixed standard of current 
 coin, the prerogative of the Crown to regulate the 
 standard " by a reference to the soundest legal 
 ** authorities, and the repeated and acknowledged 
 *' practice of ages p." 
 
 P Speech on the Bullion Resolutions, p. ^?>.
 
 67 
 
 It is this assertion, followed up by a Resolution % 
 which, to my sorrow as well as surprise, obtained 
 the sanction of the House of Commons, that ap- 
 pears to give the question a most important cha- 
 I'acter. For if the prerogative of the Crown be 
 such as to make any quantity whatever of the pre- 
 cious metals, according to pleasure, or any sub- 
 stance, no matter what, lead, paper, or leather, 
 stand for a pound sterling, this certainly is " a 
 ^logic which leaves no man anything that he can 
 '^^ call his own" — which subjects every man's pro- 
 perty to be modified or even extinguished at the 
 will of the Sovereign. 
 
 Mr. Vansittart does indeed say, that he and his 
 colleagues have nj intention to propose this exer- 
 cise of the prerogative to relieve the wants of Go- 
 vernment; and he even goes on to admit, that 
 " during the existence of a public debt, the alter- 
 " ation of the standard of money would be an act 
 
 ^ Resolved, That the right of establishing and regulating 
 the legal money of this kingdom hath at all times been a 
 royal prerogative, vested in the Sovereigns thereof, who have, 
 from time to time, exercised the same as they have seen fit, 
 in changing such legal money, or altering and varying the 
 value, and enforcing or restraining the circulation thereof, 
 by Proclamation, or in concurrence with the Estates of the 
 realm by Act of Parliament : and that such legal money 
 cannot lawfully be defaced, melted down, or exported. 
 k2
 
 66 
 
 " of bankruptcy, and a direct fraud on the public 
 "creditor, as luell as every private creditqr^ T 
 This, to be sure, is some ground of comfort ; for 
 if,, tiie standard be not altered, till the whole na- 
 tional debt is paid off, we and our children have 
 little, it is presumed, to fear upon that account. 
 But why then should the topic have been intro- 
 duced ? What bearing has it upon the point in 
 debate ? If this power must be in abeyance while 
 the public debt continues, it is perfectly nugatory 
 to advert to it, when the question is. Does not the 
 Government at this moment defraud the public 
 creditor by paying him interest in a depreciated 
 currency— by requiring him to take bank-notes in 
 payment, or nothing ? 
 
 The creditor says, Pay me in legal coin. The 
 answer is. Bank-paper is as good as coin. The 
 creditor denies it, and contends that bank-paper is 
 notoriously of less value than coin, and to such a 
 degree, that Government has itself been driven to 
 make the sale of it for less than its nominal value 
 in coin, penal. 
 
 To what purpose, I repeat, is it, to reply to this 
 argument, as Mr. Vansittart does in his first Re- 
 solution, that the King has the power of regulating 
 
 ' The injustice is the same to every private creditor whe- 
 ther there be a public debt or not.
 
 69 
 
 the standard of our coiiiage ? He surely does not 
 mean to call bank-paper our coinage. Indeed part 
 of his argument is, that bank-paper is not made 
 legal tender, and that the public creditor may wait, 
 if he pleases, till the Bank Restriction Act is re- 
 pealed, for his dividends. How then is this maxim 
 of the king's prerogative to be applied ? The coi?i 
 is not altered in value. It is the paper that is de- 
 preciated. Unless therefore he means that the 
 king's prerogative can make that /?ar/?er legal tender, 
 the assertion has not the slightest connexion with 
 the subject in dispute. 
 
 Is it then meant to display the forbearance of 
 ministers in not having put forth the full strength 
 of the crown, and to warn men how they fret at 
 this petty grievance, when so much greater a 
 burden might have been laid upon them ? Or is it 
 thrown out as a sort of challenge on a point of 
 constitutional law, curious indeed and important, 
 though irrelevant to the subject in hand ? 
 
 Of the importance of such a declaration from a 
 minister of state there can be no doubt. And it is 
 well that the declaration was met on the spot, by 
 one of the ablest and most luminous answers that 
 a question of constitutional policy ever called forth. 
 I allude to the speech of Mr. Canning, which not 
 only unravels with singular grace and perspicuity 
 the whole sophistry of his opponent's reasoning, on
 
 ^6 
 
 the subject of currency/ and exchange^ but has 
 placed this doctrine in particular,' iVhich wears so 
 ambiguous and menacing an aspect in the Heso- 
 lution of the House of Commons "^j upon its true 
 grounds both of law and policy. Whoever has 
 read the two speeches of Mr. Canning on this 
 subject, as published by himself, will perceive how 
 largely I am indebted to them for the matter of 
 this pamphlet — a debt which I shall perhaps best 
 discharge by endeavouring to extend its obligation 
 as widely as possible to others. 
 .-:\ -'5 ": 
 
 The Resolution asserts the king's prerogative to 
 " alter and vary the value of the legal money of 
 *' the kingdom either by Proclamation, or in con- 
 " eurrence with the Estates of the realm by Act 
 ^ of Parliament." The word value must here be 
 understood to mean the current value — that rate 
 according to which debts and pecuniary contracts 
 may lawfully be discharged : for, as to the in- 
 trms'ic value of the metal being affected by the 
 edict of a Sovereign, or an Act of Parliament, it is 
 an idea which none but such financiers as the 
 courtiers of Canute can be supposed to entertain. 
 
 As Mr. Vansittart did not think it necessary to 
 produce any legal authorities to this point, the fol- 
 
 »■ Sec page 67.
 
 lowing; extract from Judge Blackstone may serve to 
 throw some light upou it. m ^hhSoato ,»ai3 bsotdki 
 ("The denomination, or the value for which tlie 
 "ipjoin is to pass current, is likewise in the breast 
 '/jf;9^ the King ; and if any unusual pieces are 
 *' coined, the value nmst be ascertained by pro- 
 " clamation. In order to fix the value, the weight 
 " and the fineness of the metal are to be takep 
 " .iinto consideration together. When a given 
 ".weight of gold or silver is of a given fineness, it 
 " is then of the true standard, and called sterling 
 
 " metal and of this sterling metal all the 
 
 " coin of the kingdom must be made, by the sta- 
 " tute 25 Ed. III. c. 13. So that the king's 
 ", .prerogative seemeth not to extend to the debas- 
 ".,ing or enhancing the value of the coin below or 
 *' above the sterling value; though Sir Matthew 
 "-Hale appears to be of another opinion. The 
 *'-king may also, by his proclamation, legitimate 
 *' foreign coin, and make it current here, declaring 
 " at what value it shall be taken in payments. But 
 " this, I apprehend, ought to be by comparison 
 " with the standard of our own coin ; otherwise 
 " the consent of Parliament will be necessary %" 
 
 About the authority of an Act of Parliament 
 there can be no question. It is the authority of 
 
 * Commentaries, b. i. c, 7. §. 4.
 
 72- 
 
 the King, without ParHament, which Mr. Van- 
 sittart seems desirous of representing, as com- 
 petent to alter the current value of our coin ; that 
 is, to compel his subjects to take it either at the 
 same rate when its real value is lessened, or at a 
 higher rate when its real value remains the same. 
 If = the Resolution does not mean this, it means 
 nothing. But this is precisely the same thing, as 
 taking his subjects' money without their consent. 
 For the debts and engagements of Government 
 may thus be discharged (as often has been done by 
 despotic sovereigns) with a less quantity of the 
 precious metals than was really due. To do this, 
 Mr. Vansittart justly observes, is a direct fraud on 
 the public creditor. Does he mean then that the 
 sovereign has a right to commit this fraud ? That 
 the King cannot tax his subjects without the au- 
 thority of Parliament, but that he may cheat them 
 by his own authority ? So monstrous a propo- 
 sition could hardly have been endured, much less 
 sanctioned by the House of Commons. Neither do 
 I think so ill of the author of this Resolution, as to 
 suspect him of entertaining it. 
 
 Yet one is here placed in a perplexing dilemma. 
 For if he goes no farther than Blackstone, who 
 thinks "the King's prerogative does not extend to 
 " the debasing or enhancing the value of the coin" 
 — if he means no more than that the authority
 
 73 
 
 either of an Act of Parliament or of a Proclamation 
 is necessary to give currency to the coins, their 
 absolute and relative value being previously settled 
 according to strict justice, what is the import of 
 that "reference to the soundest legal authorities 
 " and the repeated and acknowledged practice of 
 ** ages V' which is announced with so much so-^ 
 lemnity in his speech ? and to which moreover he 
 thinks it expedient to subjoin a declaration, both 
 on his own part and on that of Mr. Perceval, that 
 they have wo intention of proposing an alteration 
 in the standard of our money P Why this re- 
 ference to the soundest legal authorities, if he 
 means nothing more recondite than Judge Black- 
 stone's Commentaries ? — and why this mention of 
 repeated and acknowledged practice, if he means 
 onlv the practice of the last two centuries, which 
 no one ever arraigned, and which certainly has no 
 connexion with the subject then under discussion, 
 the forced circulation of bank-paper ? Surely 
 the King's prerogative has nothing to do with the 
 paper of the bank. 
 
 It is well known to all who have made en- 
 quiries on the subject, that although the coin has 
 at several periods of our history been debased, 
 so that from a pouml of silver, which formerly was 
 
 ' Page 68. 
 L
 
 74 
 
 coined into twenty shillings, sixty-six shillings are 
 now coined, yet the standard has never been 
 lowered from the 43d of Eliz. when sixty-two shil- 
 lings were coined out of the pound, until last year, 
 when the number was increased to sixty-six ; the 
 recent measure being justified on the score of con- 
 venience, and as not affecting the general rate of 
 our currency, which ever since the year 1773 has 
 been measured by the standard of gold : and the 
 standard of our gold coin still remaining unaltered, 
 the legal tender in silver being also reduced to forty 
 shiUings, it was admitted on all sides to be no en- 
 croachment on the principle of a permanent stand- 
 ard of currency. Does then Mr. Vansittart mean 
 by this appeal to " repeated and acknowledged 
 " practice," to propose the arbitrary practice of our 
 Sovereigns prior to the reign of Elizabeth— practice 
 which has been discontinued not only since the 
 Revolution, but which even the Stuart princes in 
 all their difficulties never dared to imitate— does 
 he propose this as evidence of the King's pre- 
 rogative at the present day ? If he does, my an- 
 swer to his doctrine would be no other than that of 
 Bishop Andrewes to King James, " I think your 
 " Majesty has a right to take my brother Neale's 
 ** money, because he gives it, but he has no right 
 " to give away mine." 
 
 The authority of Sir Matthew Hale, which
 
 75 
 
 Blackstone seems to think inclining the other 
 way, is reduced almost to nothing by his own 
 words, as quoted by Lord Liverpool in his Treatise 
 on the Coins of the Realm. 
 
 " It is neither safe nor honourable for the King 
 " to ijiibase his coin below sterling : if it be at 
 " any time done, it is fit to be done by the assent 
 " of Parhament:" and his opinion even of such a 
 transaction is pretty unequivocally expressed in 
 these words, ^^ fieri non debiiit, factum valetT 
 
 Notwithstanding all this, notwithstanding the 
 forcible appeal made at the time to the consti- 
 tutional feeling of the House, the Resolution was 
 permitted to stand the first in that series", 
 which was brought forward to support the circu- 
 lation of bank-paper. It was permitted by the 
 same assembly who objected to Mr. Horner's 
 Resolutions, which contain the clearest and most 
 concise exposition of the principles of our cur- 
 rency that has ever been promulgated, that it 
 did not become the legislature to vote abstract 
 propositions however true, and who yet place on 
 their journals one so abstract, that it has confessedly 
 noconnexion either with the Resolutions that follow, 
 or with the occasion out of which the discussion 
 arose. 
 
 " Sir Matthew Hale's Pleas of the Crown, p. I94. fol. cd, 
 
 " See Appendix, No. II. • 
 
 l2
 
 76 
 
 In its only intelligible sense, it contains the 
 plainest Implication of the Sovereign's right to the 
 property of his subjects, which has ever been 
 hazarded in modern times. And on that account 
 it is well that a firm stand was made by one member 
 of the House, not against the measure of bank- 
 restriction, which perhaps the circumstances of 
 the country rendered expedient, but against the 
 doctrines and reasons by which it was defended. 
 These doctrines struck at the root of all sound 
 political economy, of our constitutional privileges, 
 and of our public honour and good faith. It will 
 not, I am sure, be unacceptable to my readex-s if 
 I produce, from one of the speeches delivered on 
 this occasion, not the most brilliant passage, but a 
 passage which places in the strongest light the true 
 merits of the case, and the grounds of the speaker's 
 opposition to Mr. Vanslttart's Resolutions. 
 
 " In addition to these motives of policy, there 
 " are, as I have heard this night, not without asto- 
 " nishment and dismay — considerations of jus- 
 *' tice, which preclude any systematick reduction 
 ** of the amount of our paper currency. Such a 
 " reduction, it is argued, would change the value 
 " of existing contracts, and throw into confusion 
 " every species of pecuniary transaction, from the 
 " rent of the great landed proprietor down to the 
 " wages of thfe peasant and the artisan. Good
 
 17 
 
 " God ! what is this but to say, that the system of 
 ff irredeemable paper currency must continue for 
 " ever? What is it but to say, that the debts in- 
 " curred, and the contracts entered into, under 
 " the old established legal standard of the cur- 
 " rency, including the debts and contracts of the 
 " State itself, are now to be lopped and squared 
 " to a new measure, set up originally as a tempo- 
 " raiy expedient; and that the sacredness of publick 
 " faith, and the obligation of legal engagements, 
 " are to be conformed to the accidental and fluctu- 
 " ating derangement, and not to the antient and 
 " fixed rule, of our currency ? 
 
 " If this be so, there is indeed no hope that we 
 " shall ever return to our sound and pristine state.— 
 " This objection is of a nature to propagate itself 
 " indefinitely. Every day new contracts must ne- 
 " cessarily be made ; and every day successively 
 " (as it is of the essence of depreciation to go on 
 " increasing in degree) at rates diverging more and 
 " more widely from the real standard from which 
 " we have departed. Every day, therefore, must 
 " interpose additional impediments to a return to 
 " the legal standard. Never did the wildest and 
 " most hostile prophesier of ruin to the finances of 
 " this country venture to predict that a time should 
 " come, when, by the avowal of Parliament, no- 
 " minal amount in paper, without reference to any
 
 78 
 
 " real standard value In gold, would be the pay- 
 " ment of the publick creditor. But still less 
 *•' could it ever be apprehended that such a system 
 *' was to be built on the foundations of equity and 
 *' right ; — that it would be considered as unjust to 
 " give to the paper creditor the real value of his 
 *' contracts in gold, but just to compel the creditor 
 " who had trusted in gold, to receive for all time 
 " to come the nominal amount, whatever that 
 " might come to be, of his contract in paper. 
 
 " This proposition appears to me so monstrous, 
 *',and shows so plainly to what an extravagant and 
 " alarming length we are liable to be hurried, 
 " when once we have lost sight of principle and 
 " given ourselves up to the guidance of expediency, 
 " that I am sure this House ought to lose no time 
 " in pronouncing its opinion as to the maxims by 
 " which, for centuries, the currency of this country 
 " has been preserved in eminent purity and inte- 
 *' grity ; and in declaring its determination to 
 " acknowledge no others in the theory of our 
 " money system, and to look to a practical return 
 *' to that system, not only as advantageous to the 
 " State, but as indispensable to its justice and its 
 *' honour ^." 
 
 When I perceive this tone both of sentiment 
 and reasoning preserved vigorously throughout, 
 ^ Mr. Canning's Speech^ p. 71 — 73.
 
 79 
 
 ^ the speaker never ceasing to profess that the prac- 
 Jkal measure may still be necessary, and therefore 
 that he is not prepared to vote against it, but pro- 
 testing earnestly and eloquently, and with a masterly 
 knowledge of the subject, against the false and fatal 
 grounds on which its advocates defend it — and then 
 mark the reception which this line of conduct met 
 with from both sides of the House, I recognize a 
 melancholy instance of the feeble influence of 
 truth, of reason, or even of eloquence, when un- 
 aided by the co-operation of party. Mr. Canning's 
 support was treated with scorn by the author of the 
 Resolutions against ministry, because he would not 
 adopt the concluding proposition, fixing an abso- 
 lute period of two years for the resumption of cash 
 payments. While on the other hand Mr. Van- 
 sittart indulged in what doubtless appeared to him- 
 self the most biting sarcasms, on the inconsistency 
 of a man who could adopt the theoretical opinions 
 of his adversary, and yet support his own practical 
 measures — which he compared to " voting for a 
 " conclusion that contradicts the premises." By 
 the same ingenious process it would appear, that 
 he who votes for the suspension of the Habeas 
 Corpus Act, nmst either deny the existence of the 
 constitutional privileges therein declared, or that 
 if he maintains these, he acts inconsistently in con- 
 senting to a suspension of thein under any cir- 
 cumstances.
 
 m 
 
 But the right honourable gentleman's system of 
 logic, like his finance, sets all precedent at de% 
 fiance. Thus, having wound up his speech in a 
 note of triumph with a sketch of the growing 
 u^ealth and flourishing condition of the country, he 
 denies that this wealth can he Jictitiotis, because it 
 shews itself in works of improvement, such as three 
 new bridges over the Thames, &c. and " to call 
 '* these improvements fictitious would be an out- 
 " rage to common sense." What faculty is out- 
 raged by this species of deduction I leave you, Sir, 
 and my readers to determine. One would think 
 indeed that solid and useful works, raised upon 
 fictitious capital, must have occasionally met the 
 eyes of every man. While nothing is more 
 certain than that one effect of fictitious wealth 
 rs to call forth an active and daring spirit of 
 speculation, growing bolder and bolder from the 
 apparent success of men whose means were as 
 nothing when measured by the old standard, but 
 who by fortunate rashness with their own small 
 capital, or by staking the property confided to them, 
 have risen to sudden opulence. In that new and 
 artificial state of things, it is the shrewd and enter- 
 prising schemer, not the sober dealer, who thrives. 
 Wealth appears to be called into being almost by 
 magic. Cautious and prudential maxims of business 
 are despised as antiquated : and what in other times 
 would be called wild and ruinous speculation, now
 
 81 
 
 wears the appearance of energy, intelligence, and 
 ^irit. In the mean time industry does certainly 
 receive an impulse, and a sort of new life is breathed 
 into the whole system of society. The mere cir- 
 cumstance of a fall in the value of money creates, 
 as was before^ observed, a demand for labour- — 
 and that labour being really underpaid brings un- 
 usual profit to the employer. Thus it is that farms 
 are improved, roads, bridges, and canals formed, 
 buildings raised, and a general expenditure of 
 capital, however fictitious itself, soon assumes a 
 visible and substantial form. 
 
 Till the bubble bursts all goes well. All is hope, 
 activity, and cheerfulness. Thus it was with the 
 famous South-sea scheme, the effects of which on 
 society would have been still more melancholy, 
 had the delusion lasted longer. Thus it is in all 
 revolutionary movements supported by a paper 
 circulation : and it would be just as reasonable for 
 a Frenchman to point with exultation to the armies 
 they raised, clothed, and put in motion, or to the 
 public works they planned and completed during 
 that season of general ferment, as for an English 
 minister to produce new bridges and canals, as 
 proofs that the circulating wealth is real and 
 not fictitious. Ce liest pas Vassignat qui perd, 
 
 ^ See p. 24, 
 M
 
 8^ 
 
 vest Vargent qui gagne, was the language of the 
 ruling party respecting their paper, in the first 
 stages of its depreciation. We have seen how 
 well our minister caught this note in his argument 
 about the clearness of gold. By the help of the 
 same logic, he also proves that if the ejects of a 
 paper circulation are solid and visible, the paper- 
 money itself cannot he fictitious . 
 
 Let him wait till the experiment is fairly over, 
 before he pronounces on its success. Until that re- 
 presentative wealth assutnes again the solid form, 
 we have no right to say, whatever its temporary 
 effects may have been, that it really is what it pro- 
 fesses to be. From the obstinate refusal indeed 
 which it shews to reassume this shape, from its 
 abhorrence to obey any of the charms and incan- 
 tations that have been tried to induce it to re-enter 
 the earthy substance, there is good reason to think 
 that the subtle sprite is well aware how much its 
 importance would suffer — how greatly its dimen- 
 sions would shrink, and its volatility be impaired by 
 such a change—at least it should seem that some 
 more powerful wizard than the present Chancellor 
 of the Exchequer is needed to bring about the 
 metamorphosis. If he has not succeeded in de- 
 ceiving usy how many deceitful promises, how 
 many baffling put-offs and excuses have been prac-
 
 83 
 
 tised on him by this coy phantom, who still eludes 
 his grasp 
 
 Par levibus vends volucrique simillima somno. 
 
 At one time it was the support of our armies on 
 the continent— then the foreign subsidies — then 
 the scarcity of corn — then the Berlin and Milan 
 decrees — then the inordinate thirst of Buonaparte 
 for gold, and his power of rendering it invisible — 
 then the war in the peninsula — then the peace — 
 for the last document which, if I remenjber right, 
 the successor of Mr. Pitt laid before Parliament to 
 accoimt for the disappearance of specie, was a com- 
 parative list of the arrivals of travellers to and from 
 the continent at Dover. 
 
 Having run the round of all these frivolities, let 
 us hope that sober reason and experience may at 
 length be allowed to resume their station : and 
 that if we cannot fix this visionary wealth into any 
 substance of corresponding bulk and solidity, we 
 shall at least be permitted to ascertain how much 
 of it is shadowy and ideal, and how much of ster- 
 ling worth. This Mr. Vansittart may call if he 
 pleases " tampering with our currency " ;" which 
 is just as if one should call a proposal to terminate 
 the suspension of the Habeas Corpus Act tamper- 
 ing with the constitution. But there is no other 
 
 ■ Speech on the Bullion Resolutions, p. I97. 
 M 2
 
 84 
 
 way of satisfying the public mind, or of putting an 
 end to that feverish uncertainty about matters 
 which, for the peace, the happiness, the security 
 and honour of private life, ought to be most certain. 
 The disclosure will doubtless be distressing to 
 many, but it will be less mischievous than a con- 
 tinuance of the delusion. Most mortifying of all will 
 it be to those, who have mocked us with congra- 
 tulations on our increased riches, and who naturally 
 desire to put off the evil day, when the emptiness 
 of their boasting shall be made apparent, and when 
 those whom they have misled will justly reproach 
 them as the authors of their calamity. More espe- 
 cially will the bank proprietor feel the loss, who has 
 indulged longest in this golden dream, fondly ima- 
 gining that it is to last for ever, 
 
 Qui nunc te fruitur credulus aureS, 
 Qui semper vacuum, semper amabilem 
 Sperat, nescius aurae 
 Fallacis. 
 
 It cannot indeed be expected but that all 
 funded property will collapse, when no longer dis- 
 tended by this airy medium — but the Bank, which 
 has been the chief absorbent of the profit, which 
 has glutted itself, as it were, with the excessive 
 and unlooked-for gain, must be content to con- 
 tribute a proportionate share towards the general
 
 85 
 
 restitution. From the year 1797, when the re- 
 striction commenced, to the present time, the value 
 of its stock has been increased nearly threefold^. 
 The whole of this increase must not be attributed 
 to the restriction itself ; but it is impossible not to 
 see that the regular profits of such an institution, 
 incapable as it is of engaging in general trade, and 
 making therefore only lawful interest of its money, 
 and of the Government balances deposited in its 
 hands, can never have amounted to half this sum. 
 In the general correction therefore that must be 
 made, by substituting the metallic for the iiominal 
 value of all monied property, whatever amount of 
 that property exists in the form of Bank-paper, the 
 whole difference of these values will be a loss to the 
 Bank. The difference probably is still not less than 
 15 per cent, causing a defalcation of nearly one 
 seventh on all its present issues. But whatever 
 the defalcation may be, it will not amount to a 
 restitution of their exorbitant gains — it will only be 
 a cessation of them for the future — and the stock, 
 
 ^ Iq 1797 bank stock was worth 125 per cent. At pre- 
 sent it is 272. But besides this, every hundred pound stock 
 of that time is a hundred and quarter now ; the bank having 
 in 1816 increased their nominal capital in that proportion : 
 so that the increase of bank stock since 1797 is as 272 -\--^ 
 to 125, or as 340 to 125, which is nearly as three to one.
 
 86 
 
 after this reduction, will still exceed its original value 
 in 1797 in a much larger proportion than ever 
 could have been calculated or even hoped for at 
 that time. 
 
 The most rational and equitable plan for checking 
 this inordinate growth, and providing a fund for 
 the resumption of cash payments, was that of Mr. 
 Canning in 181 L He proposed, that the then divi- 
 dend of the Bank, which was 10 per cent, should 
 be the maximum, and that all future gains during 
 the restriction, beyond this dividend, should be 
 reserved for the purpose of meeting that demand 
 which must one day be made for bullion, if the Bank 
 is ever to fulfil its engagements with the public. 
 This proposal, simple and practicable as it seems, 
 met with no countenance from either party. 
 
 But the subject of the Bank, of its connexion 
 with the Administration, and its unfortunate in- 
 fluence over it, is one too wide in extent to be dis- 
 cussed at the close of this Letter. It is a subject 
 moreover which is in the hands of one best quali- 
 fied to do it justice : one, whose intrepid perse- 
 verance against the low commercial spite and 
 jealousy he had to contend with, has already saved 
 the country more than the aggregate of all the 
 sinecure places ever existing ; and who, if ade- 
 quately supported in the House, will doubtless
 
 87 
 
 succeed ultimately in accomplishing his patriotic 
 purpose *^. 
 
 * Among the Arabic Fables of Bidpai is to be founds in 
 some copies, a tale which the ingenious translator of that 
 work appears not to have seen. As its originality is un- 
 doubted, I sliall take the liberty of giving it, though in a 
 form somewhat abridged. It is entitled, after their quaint 
 manner.. The Horses, or The folly of taking advice from 
 interested persons. 
 
 When the Sultan Amurath IV. was preparing for war 
 against the Infidels, he tohl his son he must accompany the 
 army, and bid iiim provide horses and all suitable equipment 
 for the field. The Prince asked how many horses he ought 
 to buy. The Sultan, wishing to try the discretion of his son, 
 replied, ''Go and consider with thyself, and ask counsel of 
 *' those whom thou judgest most worthy to advise thee — buy 
 " whatever is necessary, but be frugal." The young man ap- 
 peared at Court the next day, and told the Sultan he had pro- 
 vided every thing. "And how many horses hast thou bouglit?" 
 Two dozen, O Vicegerent of the Prophet, Destroyer of Infi- 
 dels, Mirror of all virtue, was the answer. "Why so many?" 
 rejoined the Sultan, " whose ad vice hast thou asked ?" I went, 
 replied the Prince, to the Bazaar, and enquired of the dealers 
 in horses : they all advised me earnestly to buy two dozen, 
 except one man, who thought one dozen was sufficient, saying, 
 I might have one dozen more, should they be wanted, out 
 of the royal stables, where they are high fed, and do no work: 
 but I followed the counsel of the many. " By the beard of 
 " my ancestors," exclaimed the Sultan, " thou hast proved 
 " thyself unworthy of the throne of Othman — thou goest to 
 " seek counsel of them whose gain is thine own loss — Vi thou 
 " knowest not to provide for thyself, how shalt tliou be able 
 " to watch over the treasure of the faithful ?"
 
 88 
 
 That the Bank has not abused the discretion 
 vested in them by the Government still more — that 
 their issues have not been so excessive as to pre- 
 
 The story is told, like most eastern fables, with many va- 
 riations. In some copies it is said to be the Vizier not the 
 Son of the Sultan, who was thus tried, and that the enraged 
 Sultan ordered his head to be struck off : in others, that he was 
 contented with depriving him of his beard, because it gave 
 him an. imposing air of sanctity and wisdom, which misled 
 his subjects. All agree in saying that he lost his office, and 
 some add, that he betook himself to a way of life, for which 
 there is no English name, but which in the Arabic is called 
 Jokkai; while the honest dealer in horses was sent for to 
 Court, and from that time forth consulted in all weighty 
 affairs. But these particulars, as being less authentic as 
 well as less applicable to my present purpose, I pass over. 
 
 The Arabs are fond of the marvellous, even in their moral 
 apologues : and it may be thought that the fiction of a Vi- 
 zier so duped exceeds the bounds of credibility. To the cri- 
 tics who raise this objection I beg leave to recommend a 
 modern narrative of plain matter of fact, in which an exact 
 parallel will be found, substituting only milli07is for hones. 
 If Mr. Grenfell could be persuaded to republish his Speech 
 of April 28, 1814, on the Sinking Fund, he would add 
 greatly to the obligations he has already conferred on the 
 public, by his firm and able, and I may add, successful ex- 
 posure of the infatuated dealings of our ministry with the 
 Bank and with monied men. I question whether the Chan- 
 cellor Oxenstiern, in his memorable advice to his son, ever 
 contemplated a case so humiliating to the pride of human 
 reason, as what is related in the preface to Mr, Grenfcll's 
 speech.
 
 89 
 
 elude, like those of America and France, all hope of 
 liquidation, is but slender consolation to a people, 
 whose ministry placed that blind confidence in 
 them which empowered them to do so — whose 
 ministry entrusted to a trading company, without 
 check or controul, an entire command over the 
 whole currency of the country. If the guardian- 
 ship of the public purse be the most sacred charge 
 of the House of Commons ; if, as you. Sir, have 
 recently told us with perfect truth, to watch the 
 slightest encroachment on this constitutional pri- 
 vilege, be the first and most anxious duty of the 
 officer who presides there ; what must we think 
 of that careless and wanton surrender of this 
 superintendence, which was involved in the mea- 
 sure of the Bank Restriction, accompanied as it 
 has been all along by a peremptory refusal to 
 impose any restraint upon the Bank, as to the 
 amount of its circulation ? It is a conduct justi- 
 fiable only on the ground, not merely that ex- 
 cessive issues had not taken place, but that they 
 never could take place — a ground which yet the 
 most devoted advocates of the measure have not 
 ventured to maintain. 
 
 Whether your opinion coincides with my own 
 on these points — or whether you will approve of 
 the considerations here submitted to your judg- 
 ment, upon matters certainly of great national 
 
 N
 
 m 
 
 rafoment-^of oite thkf^ I' am confidse^t, that jroawiU 
 not lightly dismiss the subject from your thoughts, 
 nor think amiss of the appeal which is thus inadt 
 h« behalf of some of the dearest interest* of »©►> 
 ciety. You will also, I trust, fe^l thenecessityof re^ 
 pairing, in some way or other, the injuries our pub- 
 lic credit and our mercantile character have sus- 
 tained from the unprincipled speculation which a 
 system of finance supported by such doctrines 
 never fails to introduce — and more especially of 
 raising our peasantry, if possible, from the lan- 
 guishing and abject condition into which they 
 have gradually fallen — 'and which the same finan- 
 cial system has rivetted upon them with many 
 aggravations. 
 
 The station you now occupy, though not digni- 
 fied by office, is a prominent and proud one. To 
 have been chosen by abdVe fifteen hundred gentle- 
 men of liberal education as their representative in 
 Parliament, without one dissentient voice, and' I 
 believe I may add without one dissentient mind 
 in the whole body, is a distinction which confers 
 no barren honour on its possessor. It must give 
 weight and authority to his opinions : it must ex- 
 tend the sphere of his utiHty : it must afford 
 grounds of self-confidence and self-respect: at 
 the same time that it cannot fail to reflect back- 
 on ourselves some portion of the esteem which
 
 91 
 
 belongs to a man " well formed and well placed," 
 who is too independent of party to have his own 
 line of conduct prescribed to him, and who has 
 abilities to direct the efforts of party to the 
 benefit of his country. 
 
 ^^ THE END 
 
 Erratum in thejirst edition. 
 
 Page 63. 1. %i, for diminution of the currency read diminution of the 
 value of currency 
 
 n2
 
 <<>$iM^O('> 
 
 s^^k : ■ 
 
 
 
 bloorfg v/ 
 
 

 
 APPENDIX, 
 
 No. I. 
 
 Resolutions proposed hy Francis Horner, Esq. 
 in a Committee of the whole House of Com- 
 mons, May 6th, 1811; and negatived, May 
 10th. 
 
 1. That the only money which can be legally ten- 
 dered in Great Britain, for any sum above twelve-pence 
 in the whole, is made either of Gold or Silver ; and that 
 the weight, standard, and denomination, at which any 
 such money is authorized to pass current, is fixed, under 
 His Majesty's prerogative, according to law. 
 
 2. — That since the forty-third year of the reign of 
 Queen Elizabeth, the indentures of His Majesty's Mint 
 have uniformly directed that all silver used for coin 
 should consist of eleven ounces and two penny-weights 
 of fine silver, and eighteen penny-weights of alloy, in 
 each pound troy, and that the said pound troy should 
 be divided into sixty-two shillings, or into other coins 
 in that proportion. 
 
 3. — That since the fifteenth year of the reign of King 
 Charles the Second, the indentures of His Majesty's 
 Mint have uniformly directed, that all gold used for 
 coin should consist of eleven ounces of pure gold, and 
 one ounce of alloy, in each pound troy ; and that the 
 said pound troy should be divided and coined into forty-
 
 94 
 
 four guineas and pi^ei bfilfrguine^, pr JDto other coins in 
 j|iat proportion. „ I ,,, , ,,,,,.((<} hOAi» hw-iiumi li.s 
 J, 4.— That by ;? Pf o^el^matiod (^<hcrfotfrth y^ar bf the 
 reign of King George the First, it was ordered and di- 
 rected, that guineas and the several other gold coins 
 therein named, should heciu'i'cnt at the rates and values 
 then set upon them ; viz. the guinea at the rate of 
 twenty-one shillings, and other gold coins in the same 
 proportion : thereby establishing, that the gold and silver 
 c'6ins of the realm should be a legal tender in all money 
 payments, and a standard measure for ascertaining the 
 valiie of all contracts for the payment of money, in the 
 rfelative proportion of 1 5-^?^^^ pounds vvei^t of s$^y|ing 
 silver to one pound of sterling gold. _ 
 
 5. — That by a statute of the fourteenth year of the 
 rei^n of His present Majesty, subsequently revived and 
 ta'aJde perpetual by a statute of the thirty-ninth year of 
 Ms reign, it is enacted, that no tender in payment of 
 ittbhey made in the silver coin of this realm, of any sum 
 ei^ceeding the sum of 25/. at any one time, shall be re- 
 puted in law, or allowed to be a legal tender, within Great 
 Britain or Ireland, for more than according to its value 
 by *&)eighty after the rate of 5^. Q,d. for each ounce gf 
 sirvter^- -' ■■'; -^ ■ , _ . 
 
 ^ 'Gi-^^ A-i^^fey a ProdatiiatiOH of the sisieenth yeaa* of 
 the reign of His present Majesty, confirmed by several 
 subsequent Proclamations, it was ordered and directed, 
 that if the weight of aay guinea shall be lessthan five 
 penny-weights and eight grains, such guinea shall cease 
 to be a legal tender for the payment of any money within 
 Oj'eat Britain or Ireland t and so in the same proportion 
 fer any other gold com. J-» '^'^^*^''-'-' i.^^ . , , 
 >^7.— That under these' i^s '(w-RiCft consti^ie the 
 5^tablished policy of this realm, in regard to money) no 
 ctmtracttjr ttttdertJ^Mng fot- the payfltifent; of money, sti-
 
 pulaled to be paW in potfrtSs ^terlhi^, 6r in good and 
 lawful money of Great Britain, can be legalty Satisfied 
 and dischai'ged, in gold coin, unless tlie coin tendered 
 shall weigh in the proportion of 4« parts of five peniifr 
 weights and eight grains of standard gold for each poUlid 
 steriing, specified in the said contract; nor in alve:^ 
 coin, for a sum exceeding 25l. unless such coin shall 
 weigh in the proportion of ^ of a pound troy of 
 standard silver for each pound sterling specified, in' ;t^^ 
 contract. , ,,^^ 
 
 'I^.^—That the promissory notes of the Bank of Erig- 
 hrfld are stipulations to pay, on demand, the sum in 
 potmds sterBng, respectively specified in each of the said 
 notes. 
 
 i). — That when it was enacted by the authority, ^pf 
 Pafliament, that the payment of the promissory npte$ 
 of the Bank of England in cash should for a time be 
 suspended, it was not the intention of Parliament that 
 any alteration whatsoever should take place in the value 
 of such promissory notes. i.o '<,i'^ . lI )! h vtucr 
 
 10. — That it appears, that tfie adtu^l vafoe p^ ^^ 
 prcHuissory notes of the Bank of England (measuring 
 such value by weight of standai-d gold and silver as afore- 
 said) has been, for a considerable period of time, and 
 still is, considerably less than what is established by the 
 laws of the realm to be the legal tender in pajTnenJtj^f 
 $ny money contract or stipulation. /•, 
 
 il. — That the fall which has thus taken place ia-tfee> 
 vaJue of the promissory notes of the Bank of England, 
 and in that of the country bank pujxr which i« exchange- 
 able for it, has been occasioned hy too abundant issue of 
 paper currency, botli by the Bank of Engliuid, and by 
 ihe country banks ; and tluit this excess ha« originated 
 from the want ol" that check and coutroul on the ispuot* 
 of the Bank of England, which existed before tlie suspen- 
 sion of cash })aynients.
 
 96 
 
 12. — That it appears, that the exchanges with fo- 
 reign parts have, tor a considerable period of time, been 
 unfavourable to this country, in an extraordinary de- 
 gree. 
 
 13. — That, although the adverse circumstances of 
 our trade, together with the large amount of our mili- 
 tary expenditure abroad, may have contributed to render 
 our exchanges with the continent of Europe unfavour- 
 able; yet the extraordinary degree, in which the ex- 
 changes have been depressed for so long a period, has 
 been, in a great measure, occasioned by the deprecia- 
 tion which has taken place in the relative value of the 
 currency of this country as compared with the money of 
 foreign countries. 
 
 14. — That during the continuance of the suspension 
 of cash payments, it is the duty of the Directors of the 
 Bank of England to advert to the state of the foreign ex- 
 changes, as well as to the price of bullion, with a view 
 to regulate the amount of their issues. 
 
 15. — That the only certain and adequate security to 
 be provided against an excess of paper currency, and 
 for maintaining the relative value of the circulating me- 
 dium of the realm, is the legal convertibility, upon de- 
 mand, of all paper currency into lawful coin of the 
 realm. 
 
 16. — That in order to revert gradually to this security, 
 and to enforce meanwhile a due limitation of the paper 
 of the Bank of England as well as of all the other bank 
 paper of the country, it is expedient to amend the Act 
 which suspends the cash payments of the Bank, by al- 
 tering the time till wluch the suspension shall continue, 
 from six months after the ratification of a definitive 
 treaty of peace, to that of two years from the present 
 time.
 
 97 
 
 'f^T^fltions respecti7}g Moiwif, Bullion, anil 
 Exchanges, moved hij the Right Hon. N. 
 Vansitlart, in a Committee of the ivhole 
 House of Commons, i^th May, and agreed to 
 hy the House, 14th and 16th of Alay, 1811. 
 
 1 . Resolved, 
 
 That the right of establishing and regulating the 
 legal money of this kingdom hath at all times been a 
 royal prerogative, vested in the Sovereigns thereof, who 
 have, from time to time, exercised the same as they 
 have seen fit, in changing such legal money, or altering 
 and varying the value, and enforcing or restraining the 
 circulation thereof, by Proclamation, or in concurrence 
 with the estates of the realm by Act of Parliament: and 
 that such legal money cannot lawfully be defaced, 
 melted down, or exported. 
 
 2. Resolved, 
 
 That the promissory notes of the Governor-and 
 Company of the Bank of England are engagements to 
 pay certain sums of money in the legal coin of this 
 kingdom; and that for more than a century past, the 
 said Governor and Company were at all times ready to 
 discharge such promissory notes in legal coin of the 
 realm, until restrained from so doing on tlie 95th of 
 February' 1797,by an Order of Council, confirrtferf by 
 Act of Parliament. 
 
 3. Resolved, 
 
 That the proniissory notes of the said Company 
 have hitherto been, and are at this time, held in public 
 o
 
 estimation to be equivalent to the legal coin of the 
 realm, and generally accepted as such in all pecuniary 
 transactions to which such coin is lawfully appli- 
 cable. 
 
 4. Resolved, 
 
 That at various periods, as well before as since 
 the said restriction, the exchanges between Great Bri- 
 tain and several other countries have been unfavourable 
 to Great Britain; and that during such periods, the 
 prices of gold and silver bullian, especially of such gold 
 bullion as could be legally exported, have frequently 
 risen above the Mint price : and the coinage of money 
 ^t the Mint has been either wholly suspended or greatly 
 diminished in amount: and that such circumstances 
 have usually occurred, when expensive naval and mili- 
 tary operations have been carried on abroad f and in 
 times of public danger or alarm; or when large import- 
 ations of gpain from foreign parts have taken place. 
 
 '({nt That such unfavourable changes, and rise in 
 ^Jhe price of bullion, occurred to a greater or less degree 
 during the wars carried on by King William the Third 
 and Queen Anne; and also during part of the seven 
 years w.ar, and of the American war; and daring the 
 war and scarcity of grain in 1795 and 1796, when the 
 difficulty of procuring cash or bullion increased to such 
 a degree, that on the 25th of February, 1797j the Bank 
 of England was restrained from making payments in 
 cash by an Order of Council, confirmed and continued 
 to the pi-escnt time by divers Acts of Parliament : _a.nd 
 the exchanges became still more unfavourable, and the 
 price of bullion higher, during the scarcity wliijjljt .pre- 
 vailed for two ijrears previous, to the peace @f iA^thiens.
 
 6. Resolved, 
 
 That the unfavourable state of the exchanges, 
 and the high price of bullion, do not, in any of the in- 
 stances above referred to, appear to have been produced 
 by the restriction upon casli payments at the Bank of 
 England, or by any excess in the issue of Bank-notes ; 
 inasmuch as all the said instance*, except the last, oc- 
 curred previously to any restriction on such cash pay- 
 ments ; and because, so far as appears by such inform- 
 ation as has been procured, the price of bullion has fre- 
 (](>!iently been highest, and the exchanges most unfa" 
 Vdurable, at periods, when the issues of Bank-notes have 
 been considerably diminished, and they have been after- 
 wards restored to their ordinary rates, although those 
 isst^e!^ Tiave been increased. 
 
 Y. Jtesolved, loiJiV-tyijo -^rcj. 
 
 ■'" That during the period of nearly sW^rity-eight 
 years, ending with the 1st of January 179G, and pre- 
 vious to the aforesaid restriction, of which period ac- 
 counts are before the House, the price of standard gold 
 in bars has been at or under the Mint price twenty-eight 
 years and five months; and above the said Mint price 
 forty-eight years and eleven months ; and that the price 
 of foreign gold coin has been at or under 3/. ISs. per 
 o)lnce, thirty-six years and seven months, and above 
 the said price thirty-nine years and three months ; and 
 that during the remaining intervals no prices are stated. 
 — And that during the same period of seventy-ei^ht 
 years, the price of standard silver appears to have been 
 at or under the Mint price, three years and two months 
 only. 
 
 jT.qZft^ibfo^/'i^iJBDg y/it y^miuh ,i3jJ^id noillwd 'to •> 
 
 That during the latter part, and for some time 
 o 2
 
 100 
 
 after the close of the American war, during the years 
 1781, 1782, and 1783, the exchange with Hamburgh 
 fell from 34.1 to 31.5, being about eight per cent. ; 
 and the price of foreign gold rose from 3/. 17s. 6d. to 
 4l. 9s. 3d. per ounce, and the price of dollars from 
 5s. Aid. per ounce, to 5s. 11 jd.; and that the Bank- 
 notes in circulation were reduced between March 1782 
 and December 1732, from 9,26(),000Z. to 5,995,000/. 
 being a diminution of above one third, and continued 
 (with occasional variations) at such reduced rate until 
 December 1784.: and that the exchange with Hamburgh 
 rose to S^.CJ, and the price of gold fell to 3/. I7s. 6d. 
 and dollars to 5s. l^d. per ounce, before the 25th of 
 February 1787? the amount of Bank-notes being then 
 increased to 8,688,000/. 
 
 o^jEesolved, 
 
 9(5 > That the amount of Bank-notes in Febru- 
 ary 1787, was -8,688,000/. and in February 1791, 
 11^699,000/.; and that during the same period, the sum 
 of 10,704,000L was coined in gold; and that the ex- 
 change with Hamburgh rose about three per cent. 
 /ji b;vn;''- ■■■ •.. -:ly-i-r^,^ -:•,■■ : 
 
 nA.i That the average amount of Bank-notes in the 
 year 17Q5, was about 11,4<97,000/. ; and on the 25th of 
 February, 1797> was reduced to 8,640,000/. during whicii 
 time the exchange with Hamburgh fell from 36 to 35, 
 being about three per cent, and the said amount was 
 increased to 1 1,855,000/. exclusive of 1,542,000/. in. notes 
 of one pound and two pounds each, on the 1st of 
 February 1798, during which tin)© thjeLe^ichaBge rose to 
 38.2, being about nine per centnifinr esw aorijl.)!)
 
 101 
 
 11. Resolved, 
 
 That the average price of wheat, per quarter, 
 in England, in the year 1708, was 5s. 3d.; in 1709 
 67^. 5d.; in 1800, 11 35. Id.; in 1801, 11 86. 3c/.; and in 
 18Q2, 675. 5d. 
 
 The amount of Bank-notes, of five pounds and up- 
 wards, was 
 
 
 About 
 
 And under 51. 
 
 JMaking together 
 
 in 1798, 
 
 10,920,400/. 
 
 1,786,000/. 
 
 12,706,400/. 
 
 in 1799S,, 
 
 12,048,790/. 
 
 1,626,110/. 
 
 13,674,906/. 
 
 in 1800, 
 
 13,421,920/. 
 
 1,831,820/. 
 
 15,253,740/. 
 
 in 1801, 
 
 13,454,370/. 
 
 2,71. '5,1 80/. 
 
 16,169,550/. 
 
 in 1802, 
 
 13,917,980/. 
 
 3,136,470/. 
 
 17,054,450/. 
 
 That the exchange with Hamburgh was, in January 
 1798, 38.2; January 1799, 37.7; January 1800, 32. ; Ja- 
 nuary 1801, 29.8 ; being in the whole a fall of above 22 
 per cent.— In January 1802, 32.2 ; and December 1802, 
 34. ; being in the whole a rise of about thirteen per 
 cent. 
 
 12. Resolved, 
 
 That during all the periods above referred to, 
 previous to the commencement of the war with France 
 in 1793, the principal states of Europe preserved their 
 independence, and the trade and correspondence thei'eof 
 were carried on conformably to the accustomed law of 
 nations; and that although from the time of the inva- 
 sion of Holland by the French in 1795, the trade of 
 Great Britain with the Continent was in part circum- 
 scribed and interrupted, it was carried on freely with 
 several of the most considerable ports, and commercial 
 correspondence was maintained at all times previous to 
 the summer of I8O7.
 
 102 
 
 13. Resolved, 
 
 That since the month of November 1806, and 
 especially since the summer of 1807, a system of exclu- 
 sion has been established against the British trade on 
 the continent of Europe, under the influence and terror 
 of the French power, and enforced with a degree of 
 violence and rigour never before attempted; whereby all 
 trade and correspondence between Great Britain and the 
 continent of Europe has (with some occasional excep- 
 tions, chiefly in Sweden and in certain parts of Spain 
 and Portugal) been hazardous, precarious, and expen- 
 sive, the trade being loaded with excessive freights to 
 foreign shipping, and other unusual charges : and that 
 the trade of Great Britain with the United States of 
 America has also been uncertain and interrupted ; and 
 that in addition to these circumstances, which have 
 greatly affected the course of payments between this 
 country and other nations, the naval and military ex- 
 penditure of the United Kingdom in foreign parts has 
 for three years past been very great; and the price of 
 grain, owing to a deficiency in the crops, higher than 
 at any time, whereof the accounts appear before Par- 
 liament, except during the scarcity of 1800 and 1801 ; 
 aD(J that large quantities thereof have been imported. 
 
 fi: Hesolved, 
 
 *■ - That the amount of currency necessary for car- 
 rying on the transactions of the country, must bear a 
 proportion to the extent of its trade and its public re- 
 venue and expenditure ; and that the annual amount of 
 the exports and imports of Great Britain, on an average 
 of three years, ending 5th of January, 1797, was 
 48,732,651/. official value; the average amount of re- 
 venue paid into the Exchequer, including monies raised 
 by lottery, 18,759,165/.; and of loans, 18,409,842/.; making
 
 103 
 
 together 37,1 eOjOOTZ.; and the average amount of the 
 total expenditure of Great Britain, 42,855,111/.; and 
 that the average amount of Bank-notes in circulation 
 (all of which were for five pounds, or upw^ards) was about 
 10,782,780/.; and that 57,274,617/. had been coined in 
 gold during His Majesty's reign, of which a large sum 
 was then in circulation : 
 
 That the annual amount of the exports and imports 
 of Great Britain, on an average of three years, ending 
 5th of January, 1811, supposing the imports from the 
 East Indies and China, in the year ending 5th of Ja- 
 nuary, 1811, to have been equal to tbeir amount in the 
 preceding year, was 775^7 1 >31 8/. ; the average amount of 
 revenue paid into the Exchequer, 62,763,74'6/. ; and of 
 loans, 12,673,548/. making together 75,437,294/.; and 
 the average amount of the total expenditure of Great 
 Britain, 82,205,066/. ; and that the average amount of 
 Bank-notes, above five pounds, was about 14,265,850/. 
 and of notes under five pounds, about 5,283,330/.; and 
 that the amount of gold coin in circulation was greatly 
 diminished. '"-: 
 
 15. P.esolved, '" '' 
 
 That the situation of this kingdom, in respect 
 of its political and commercial relations witli foreign 
 countries, as above stated, is sufficient, without any 
 change in the internal value of its currency, to account 
 for the unfavourable state of the foreign exchanges, and 
 for the high price of bullion. ,^^.^. 
 
 16. Resolved, 
 
 That it is highly important that the restriction 
 on the payments in cash of the Bank of England, should 
 be removed, whenever tiie political and commercial re-
 
 ^ ao4 
 
 lations of the country shall render it compatible with the 
 public interest. 
 
 17. Resolved, 
 
 That under the circumstances affecting the po- 
 litical and commercial relations of this kingdom with 
 foreign countries, it would be highly inexpedient and 
 dangerous, now to fix a definite period for the removal 
 of the restriction of cash payments at the Bank of Eng- 
 land, prior to the term already fixed by the Act 44 
 Geo; III. c. 1. of six months after the conclusion of a 
 definitive treaty of peace. 
 
 THE END. 
 
 BAXTEK, PEINTEE, OJCfOfll/.
 
 I