21 



its purchases abroad by what it inherently produces : as ours, 

 with our manufactures. But it would be very disadvantageous, 

 if it were possible, to begin to pay for extraordinary imports, 

 as recpiired by a deficient harvest, immediately, with manu- 

 factures. Tor the goods woidd, with great difficulty, find a 

 market ; and would, probably, be sold at a loss. It is better 

 that the gold should be spared and sent out first, as the pro- 

 verb is, to burn the pockets of the people, and excite the 

 foreign market ; and then good sales may be made, and the 

 gold repurchased and brought home, for a similarly recurring 

 necessity. 



"A more common proposal (I believe) is, that the bank 

 issues should be made partly on gold, and partly on another 

 basis, and the limit of the expansion left to the influence of 

 gold ; but, instead of the bank notes having an invariable 

 relation to gold, by a fixed price, the gold should take a price 

 according to its abundance or scarcity. 



"It is objected, that this arrangement woidd tempt the 

 bankers to over-issue their notes, until they were largely 

 depreciated, and then they woidd raise the price of gold 

 indefinitely; and thus, there would be left no measure of value, 

 when that which should determine the value of other things 

 would have no fixed value itself; and the case would be like 

 measuring from a moveable point. Unless the limit of the 

 issues were fixed, this objection seems to be valid, and the 

 system, if it may be called such, appears inadmissible. But 

 if the limit were fixed, it would be hard to persuade people to 

 acquiesce in the uniform value of a £5 note, that might be 

 worth £5 5s. to-day, and £4 15s. to-morrow. The appre- 

 hension that all £5 notes to-day would only exchange for 

 '. I 1 5s. to-morrow, or next week, would produce an ungovern- 

 able rush on the banks for a present exchange, and continued 

 confusion would likely be the result. Gold is chiefly useful, 

 either as governing the value of the circulation at home, or 

 procuring supplies f'rom^ abroad, or adjusting foreign ex- 



