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duced to the utmost difficu.ty to make 4, or even 3} .per cent. of their money, as was the case in 1817. This would have given activity to agriculture, manufactures, trade, and commerce, and, of course, additional employment for the people, which I think I am warranted, by the evidence submitted to Parliament, in believing would have prevented one half of the sedition now in the country. I am aware that my opinions may be thought extravagant; notwithstanding which, I feel perfectly convinced of their soundness; and that, had the peace of 1783 continued a few years longer, even the bogs of Ireland would have soon been brought under some kind of cultivation; at least such was my belief at the time. By additional restrictions on the importation of grain it is true the quartern loaf might possibly be raised to Is. or 1s: 3d., and additional labor and cultivation thereby produced; but could the great body of the people afford to eat it at those prices ? It is only by means of surplus capital, and a consequent reduction of the rate of interest, that land of inferior quality can be brought under eultivation, and the country enabled to subsist herself, without striking at the root of her prosperity. The stagnation of trade has been mainly ascribed to the distresses of the continents of Europe and America ; but I believe, nay I know that it has been more owing to the want of credit and confidence at home. try is the main spring of the commerce of the universe : injure that, and you derange the whole machinery. I admit that the transition from war to peace had an unfavorable effect for a time; and it must also be allowed that foreign loans, and other circumstances, have drawn away some of our capital : but they are no longer in operation, and their effect, when put in comparison with the measure I am deprecating, has been something like a drop of water in the ocean. With respect to the United States of America, other causes have operated to diminish our trade, the chief of which is, the attempt to resort to Cash payments; a measure which I think never could have been seriously contemplated by any other than that conceited race of people, circumstanced as that country is, in opposition to the luminous exposition of the subject to be found in the works of their sage, Dr. Franklin. It has always been matter of astonishment to me, that politicians in general should attach so much importance to Coin and Bullion, when it is allowed that we never possessed, at any one time, more than about thirty millions; which is about 10 per cent. on the estimated war income of the Country, and only a shilling a day (the usual board-wages of agricultural laborers), for six or seven weeks, for the whole population of Great Britain. If this sum of thirty millions produce income, as far as that went I would admit its importance ; but it is positively dead

capital, and can only be of consequence in reference to Continental operations. Now, admitting that this measure will give us that sum, I am of opinion we could not spare more than five or six millions for that purpose, with our present Mint regulations, without serious injury to our commerce, and incurring the risk of being again obliged to suspend Cash payments. For my own part, I have always considered Coin merely as the measure of value, the same as the standard bushel and pound avoirdupois are the measures of quantity; and that it matters not, as far as domestic economy is concerned, whether the sovereign passes for 20s. 215. or 22s., provided the point is clearly understood and established by law: but with respect to foreign commerce the case is very different. The ounce of gold and silver are, or ought to be, the standards of value ; and it appears to me to be a most questionable policy, to have a coin of greater intrinsic value than that of other countries. Is it not offering a premium to foreigners to take our gold instead of our manufactures and colonial produce, and a temptation to the people of this country to invest their capital in the foreign funds, when gold is high abroad? At all events, it is clear we cannot retain our coin when gold is materially above 31. 17s. 10 d. an ounce, if it is wanted for the currency of other countries, because they can afford to give more for it than we can. The Louis-d'or is 1s. 9d. per ounce inferior in quality, and four grains less in weight, when compared with our sovereign at 20s. ; and the Paris bankers oblige persons requiring gold, to pay one per cent. for it, making together a seignorage of about seven

It may be thought by some persons, and I acknowledge I was once of the same opinion, that when gold was at or under the Mint price, which is the case at present, the Bank might resume Cash payments without risk; but the unsuccessful attempt of last year, and more mature reflection, has convinced me it cannot be done until either the Country is fully charged with a metallic currency, or our Mint regulations altered. I will not venture to hazard an opinion as to what amount would be required for that purpose ; but I am quite confident that bullion could not be obtained at any thing like the price of 31. 175. 104d. per ounce, even if it did not exceed the sum we had in circulation when our revenue, trade, and commerce, were small in comparison with their present extent. It has been confidently asserted, “ that the coin went out of the country because the Bank Directors issued their notes at the same time, and that they could not circulate together;" but the fact was not so. The coin was exported because the balance of trade turned suddenly against us, in consequence of large importations of coin, &c. and it was more profitable to remit bullion than bills. Had that not

per cent.

been the case, either the coin or notes (if more were in circulation than was absolutely required by the Country) would have returned on the Bank with as much certainty and regularity as the flood succeeds the ebb tide. As the Bank paper has always been issued to represent gold at 31. 17s. 101d. per ounce, I think it ought, in fairness to the public, to be redeemed at that rate, when it is recollected what immense wealth has been amassed by the Bank in consequence of the restriction of cash payments. I am aware the Directors can avoid this sacrifice by making a bonfire of their notes, and ceasing to issue fresh ones; but they would thereby relinquish their profits as bankers, and derange the whole affairs of the nation; which it cannot possibly be either their interest or inclination to do (although there are certainly several Gentlemen in the Direction who call themselves Whigs, and would go great lengths to upset the Administration). I would therefore propose, that the sovereign should pass for 21s. or any other value that might be deemed sufficient to enable the Bank to resume Cash payments in a given time, and that they should pay to Government the difference between the old and new standard on the amount of their notes in circulation at the time the measure is adopted (suppose twelve or thirteen hundred thousand pounds); the Bank, in that case, to supply the bullion for the coinage, which I think preferable to Government's doing it, as it would prevent competition in the market, and the Directors must be the best judges of the quantity likely to be required.

It is deplorable to observe the erroneous ideas entertained by several leading members of both Houses of Parliament with respect to the commerce of the country, particularly the noble Chancellor of Oxford, whose opinions on most subjects have deservedly much weight. What used to be deemed commercial enterprise, it is now the fashion to call over-trading, and to impute it to over-issues of Bank paper; than which nothing can be more unfounded, as is clearly shown in the letter of a Mr. Edward Cooke, published in the Pamphleteer No. 27. Ever since the time of Fordyce (and no doubt the same was the case before) we have had periodical convulsions in the commercial world; but it was not till lately that the insolvency of a few individuals has been considered an object of great national importance. I believe it is admitted by the ablest writers on political economy, that a nation may sometimes gain by its exports, although the individuals concerned lose ; and I have no doubt the country will ultimately be greatly benefited by the late excessive shipments of our manufactures to South America and the East Indies ; a circumstance which usually takes place on the opening of a new market. I am firmly persuaded more property has been annihilated within the last eighteen months, than in any former period of four times the duration, and I am not aware that any extensive bankruptcies have taken place in consequence; a clear proof that our commerce is bottomed on capital, and not on paper, as has been industriously represented.

I trust and hope the freedom and pertinacity with which I have urged my opinions may not give offence; they are the result of between thirty and forty years' experience, and I cannot help feeling assured in my own mind, that no unprejudiced person can read with attention the labored but very able work of a Mr. Gray, “On the Happiness of States,” and “ All Classes productive, by Dr. Purvis," published by Longman and Co., without being at least convinced that they have not been adopted hastily, nor without due consideration.' In conclusion, I think it right to add, I am no otherwise personally interested in the fate of this question, than as it must affect every man possessing a considerable stake in the agriculture and commerce of the country, and that my sole motive in attempting to occupy your attention is an anxious desire to alleviate the sufferings of the people.

I have the honor to be, Sir, Your obedient, and
Very humble Servant, and an impartial Friend of


Since writing the foregoing, I have observed that a Petition from the Merchants and Traders of London has been presented to the House of Commons, and it appears that one member at least takes the same view of the subject that I do. At


leisure I shall take the liberty of transmitting a copy of this letter to each of the other Members of the Cabinet.



8th January, 1820.


In my letter to you of the 27th December, I omitted to remark on a point which has been much insisted on by the advocates for the return to Bullion or Cash payments, viz. That the high price of bullion is owing to the over-issues, or, as some persons call it, the depreciation of Bank notes. Mr. Edward Cooke, in his admirable letters already referred to, has demonstrated no overissues have ever taken place; and I think I have clearly shown that the thing is impracticable. Are not Bank aotes a substitute for coin? And who ever before heard of the adoption of a substitute enhancing the price of an article ? In my humble opinion, it might with as much truth be said, that using gilded and plated, instead of solid gold and silver, articles, enhances the price of the precious metals ; and I would ask those persons, from whence and by what means are we enabled to obtain them? Is it not from South America and the Continent of Europe, in exchange for our manufactures and colonial produce ? And has not Paper currency the effect of reducing the rate of interest, and thereby promot ing an extension of our manufactures, trade, and commerce ? If it should be contended, as I expect it will, that the contraction of the Bank issues has caused the fall which has lately taken place in the price of bullion, I would ask what caused its fall to the Mint price in 1817? It certainly was not contraction of the Bank issues; for the amount of notes in circulation that year was 29,000,0001., and only 16 or 17,000,0001. in 1808 and 1809, when bullion was 51. 5s. an ounce. For upwards of thirty years of my life, consequently long before Cash payments were restricted, I have been in the habit of observing and considering the effects of Paper currency (particularly Country Bankers' notes) on the trade and commerce of the country; and my first conclusion was, that it enhanced the price of the necessaries of life and other articles, precisely in the degree that it promoted the pro. sperity of the country; and I have seen no reason to retract that opinion, except in as far as it, by increasing our productive powers, has a counteracting effect on the advance of prices. Within the last seven or eight years, wheat has fluctuated from 8s. 'to 21s.or 22s. per bushel, and muscovado sugars from 65s. to 135s. per cwt.; and I think it might as well be contended that the low as that the high prices were occasioned by the excess of Paper currency. I do not mean to say that we had not more notes in circulation when prices were high than when they were low, for that would be denying my own data ; which is, that when articles are high they require more currency to represent them than when low, and it is fabricated as a matter of course ; consequently, the high prices produce the paper, and not paper the high prices, as has been asserted by many persons. It has also been said that the Bank, by diminishing their issues, might raise the value of their notes to the value of bullion, whatever it might be ; and the practice of the Directors, prior to the restriction of Cash payments, has been adduced in proof of the fact. Although a noble lord (whose famous philippic on this subject very

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