STATE PAPERS. 



4C9 



compared with the accounts laid 

 before the committees of 1797, 

 and which were then carried back 

 for twenty years, it will appear 

 that the yearly advances of the 

 bank to government have, upon 

 an average, since the suspension, 

 been considerably lower in amount 

 than the average amount of ad- 

 vances prior to that event, and the 

 amount of those advances in thetuo 

 lastyears,thoughgreaterin amount 

 than those of some years immedi- 

 ately preceding, is less than it was 

 for any of the six years preceding 

 the restriction of cash payments. 



With respect to the amount of 

 commercial discounts, your com- 

 mittee did not think it proper to 

 require from the directors of the 

 bank a disclosure of their absolute 

 amount, being apart of their pri- 

 vate transactions as a commercial 

 company, of which, without urgent 

 reason, it did not seem right to de- 

 mand a disclosure. The late go- 

 vernor and deputy governor, how- 

 ever, at the desire of your com- 

 mittee, furnished a comparative 

 scale, in progressive numbers, 

 shewingthe increaseof theamount 

 of their discounts from the year 

 1790 to 1809, both inclusive. 

 They made a request, with which 

 your committee have thought it 

 proper to comply, that this docu- 

 ment might not be made public ; 

 the committee therefore have not 

 placed it in the appendix to the 

 present report, but have returned 

 it to the bank. Your committee, 

 however, have to state in general 

 terms, that the amount of dis- 

 counts has been progressively in- 

 creasing since the year 1796; and 

 that tiieir amount, in the last year 

 (1809) bears a very high propor- 

 tion to their largest amount in any 

 year preceding 1797. Upon this 



particular subject, your committee 

 are only anxious to remark, that 

 the largest amount of mercantile 

 discounts by the bank, if it could 

 be considered by itself, ought 

 never, in their judgment, to be re- 

 garded as any other than a great 

 public benefit; and that it is only 

 the excess of paper currency 

 thereby issued, and kept out in 

 circulation, which is to be consi- 

 dered as the evil. 



But your committee must not 

 omit to state one very important 

 principle, that the mere numerical 

 return of the amount of bank notes 

 out in circulation, cannot be con- 

 sidered as at all deciding the ques- 

 tion, whether such paper is or is 

 not excessive. It is necessary to 

 have recourse to other tests. The 

 same amount of paper may at one 

 time be less than enough, and at 

 another time more. The quantity 

 of currency required will vary in 

 some degree with the extent of 

 trade ; and the increase of our 

 trade, which has taken place since 

 the suspension, must have occa- 

 sioned some increase in the quan- 

 tity of our currency. But the 

 quantity ofcurrency bears no fixed 

 proportion to the quantity of com- 

 modities ; and any inferences pro- 

 ceeding upon such a supposition 

 would be entirely erroneous. The 

 effective currency of the country 

 depends uponthe quickness of cir- 

 culation, and the number of ex- 

 changes performed in agiven time, 

 as well as upon its numerical 

 amount; andallthecircumstances, 

 which have a tendency to quicken 

 or to retard the rate of circulation, 

 render the same amount ofcur- 

 rency more or less adequate to the 

 wants of trade. A much smaller 

 amount is required in a high state 

 of public credit; than when alarms 



