l6o PAPER MONEY AND GOLD EXCHANGE. 



them its creditors : the Cape made them its debtors, and it was 

 believed by many that a rebelHon would wipe out these debts. 

 Though not in favour of buying in the 250,000 Rds. issued by 

 Craig, Macartney — in case the authorities in England thought 

 it advisable — proposed a scheme for this purpose which showed 

 a great ignorance of the causes that had brought about the 

 depreciation. He suggested the issue of special coins contain- 

 ing one-fifth alloy, "which would probably not be worth while 

 to export from hence." For that very reason, as the f|uantity 

 • of money would have remained the same, the depreciation would 

 have continued, \^"hen ^Macartney's report arrived in London. 

 England herself had an inconvertible paper currency. It is 

 therefore not surprising that the War r)lfice decided that no 

 material alterations should be made in the Cape currency till 

 the conclusion of peace. It agreed, however, to send out £5,000 

 in copper, as there was a great need of small change. No 

 Government notes were in circulation of denominations lower 

 than a skilling, and it had been found necessary to allow in- 

 dividuals to issue private notes for smaller amounts. On the 

 arrival of the copper money. Sir George Yonge, who succeeded 

 Macartney as Governor, ordered that the coins should be cir- 

 culated at the rate of two pence or stivers for each copper to 

 prevent their being exported. Hence the name of "dubbeltje" 

 for the penny, a name which still survives in some places. 



One of the misfortunes which attend an increase in the 

 quantity of money is that once a higher level of prices has 

 resulted, these come_ to be looked on as natural. The higher 

 prices require, if they are to be maintained, the greater amount 

 of circulating medium. In fact, it may even seem that there 

 is not enough money in circulation to carry on trade with these 

 prices. This happened at the Cape. In 1802 the Burgher 

 Senate declared that serious inconvenience was experienced 

 from the small quantity of money, and requested that more 

 might be put in circulation through the Lombard Rank. Act 

 cordingly, 165.000 Rds. were printed and lent to individuals 

 through the Bank, and an issue of 80,000 Rds. was also made 

 to purchase grain. This latter amount was not intended to be 

 a ])ermanent addition to the money in circulation. A promise 

 was given that it w^ould be destroyed as soon as the grain had 

 been disposed of to the public, but this promise was not kept. 



When the Cape was given up to the Batavian Republic in 

 1803. the circulation had increased to 1,780.276 Rds. Prices 

 had risen, but the depreciation relatively to bills had been re- 

 duced owing to the large remittances made for the su])port of 

 the British forces. The large imports of silver had reduced 

 the ])remium on si)ecie to between iive and ten per cent. Under 

 the Republic the same princi])le of meeting part of the expen- 

 diture by the i)rinting of notes was continued. The money was 

 used for ])ublic puri)oses and to give relief to the inhabitants 



