462 ANNUAL REGISTER, 1810. 



the principle more distinctly tlian 

 those of tlie present day, but they 

 felt tlie inconvenience, and obeyed 

 its impulse; which practically 

 established a check and hmitation 

 to the issue of paper. In the 

 present times, the inconvenience 

 is not felt ; and the check, accord- 

 ingl}', is no longer in force. But 

 your committee beg leave to re- 

 port it to the House as their most 

 clear opinion, that so long as the 

 suspension of cash payments is 

 permitted to subsist, the price of 

 gold bullion and the general 

 course of exchange with foreign 

 countries, taken for any consider- 

 able period of time, form the best 

 general criterion from which any 

 inference can be drawn as to the 

 sufBciency or excess of paper cur- 

 rency in circulation ; and that the 

 Bank of England cannot safely 

 regulate the amount of its issues, 

 without having reference to the 

 criterion presented by these two 

 circumstances. And upon a review 

 of all the Aicts and reasonings 

 which have already been stated, 

 3'our committee are further of 

 opinion, that, although the com- 

 mercial state of this country, and 

 the political state of the continent, 

 may have had some influence on 

 the high price of gold bullion and 

 the unfiivourable course of ex- 

 changevvith foreign countries, this 

 price, and this depreciation, are 

 also to be ascribed to the want of 

 a permanent check, and a suffici- 

 ent limitation of the paper cur- 

 rency in this country. 



In connection with the general 

 subject of this part of their report, 

 the policy of the bank of England 

 respecting the amount of their cir- 

 culation, your committee havenow 

 to call the attention of the House 

 toanother topic which wasbrought 



under their notice in the course 

 of their inquiry, and which, in 

 their judgment, demands the most 

 serious consideration. The bank 

 directors, as well as some of the 

 merchants who have been ex- 

 amined, shewed a great anxiety 

 to state to your committee a 

 doctrine, of the truth of which 

 they professed themselves to be 

 most thoroughly convinced, that 

 there can be no possible excess in 

 the issue of Bank of England 

 paper, so long as the advances in 

 which it is issued are made upon 

 the principles which at present 

 guide the conduct of the direct- 

 ors ; that is, so long as the discount 

 of mercantile bills is confined to 

 paper of undoubted solidity, aris- 

 ing out of real commercial trans- 

 actions, and payable at short and 

 fixed periods. That the discounts 

 should be made only upon bills 

 growing out of real commercial 

 transactions, and falling due in a 

 fixed and short period, are sound 

 and well-established principles. 

 But that, wliile the bank is 

 restrained from paying in specie, 

 there need be no other limit to 

 the issue of their paper than what 

 is fixed by such rules of discount, 

 and that during the suspension of 

 cash payments the discount of 

 good bills fidling due at short 

 periods cannot lead to any excess 

 in the amount of bank paper in 

 circulation, appeals to your com- 

 mittee to be a doctrine wholly 

 erroneous in principle, and preg- 

 nant with dangerousconsequences 

 in practice. 



But before your committee pro- 

 ceed to make such observations 

 upon this theory as it appears to 

 them to deserve, they thinkit right 

 to shew from the evidence, to what 

 extent it is entertained by some of 



