96 



BULLION. 



Bullion. 



of financial stability ; the mercantile world, if not 

 prosperous, was exempt from any great or general 

 disaster ; and the bank, of course, from any impor- 

 tunate demands for extended issue. The directors 

 had the prudence to keep their circulation steadily 

 within the limit we have mentioned; and the depre- 

 tiation of their paper, though continuing always at 

 nearly three per cent, was unperceived by the public. 

 Gold was not lower than four pounds an ounce ; but 

 it was little heard of in the market, the bank having 

 become, in a manner, the exclusive purchasers. 



We are now to enter on a fourth pertod in the his- 

 tory of the restriction act, a period altogether dif- 

 ferent from the tranquil years that preceded it. Un- 

 til the end of 1807, we had conducted our military 

 operations with a careful reference to our means, and 

 had been hardly led into any kind of warfare calcu- 

 lated to expose to hazard the peculiar nature of our 

 currency. But, at this time, all considerations of a 

 calmer kind gave way to the call for vigour, and the 

 stoppage of neutral trade, a measure long called for 

 by some of the London merchants, and long resisted 

 by government, received the sanction of the cabinet. 

 The dull sale of our East India merchandise, the un- 

 . profitableness of ship-owning, and the annual sink- 

 ing of West India property, misfortunes resulting in 

 part from the defects of our own policy, and more 

 from the pressure of long continued warfare, were 

 ascribed, by the majority of the suffering parties, to 

 the successful competition of the Americans. Mer- 

 cantile men, accustomed to form their opinions from 

 first impressions, can hardly be expected to take in- 

 to view the remote consequences of the measures for 

 which they contend. Ardent in the prosecution of 

 the war, and unconscious that its accumulating bur- 

 dens sap the foundations of their prosperity, they are 

 much more likely to attribute their disappointments 

 to the intrusive interference of foreigners, than to er- 

 rors at home. Commercial jealousies have always 

 been keen, and the Americans seem likely to be- 

 come in our eyes what the Dutch were to our ances- 

 tors in the days of Cromwell. Her merchants seem 

 to have persuaded government, that if neutral trade 

 were stopped, the continent must draw its supplies 

 from England ; and that we should succeed in smug- 

 gling them in defiance of Bonaparte's prohibitory de- 

 crees. Hence, among other arrangements, the cap- 

 ture of Heligoland, as a station for contraband trade 

 with the north of Germany. While her merchants 

 calculated that these measures would relieve them of 

 the superabundance of their produce, ministers, dis- 

 posed to join in this expectation, were perhaps more 

 directly actuated by the popularity attendant on a 

 grand demonstration of energy against the enemy. 

 Such was the origin of our orders in council in No- 

 vember 1807. By a singular coincidence, it hap- 

 pened that, shortly before, we had determined to 

 consider the intercourse of America as injurious to 

 us, Bonaparte had adopted an opposite conclusion ; 

 and, under the impression, " that all maritime com- 

 merce tolerated on the continent, whether through 

 Americans or others, must turn to the advantage of 

 the British," had intimated to the minister of the 



United States at Paris his intention to permit no Bullion, 

 longer the neutrality of his country. Accordingly, 

 his rejoinder to our orders bespoke no disposition to 

 evade their operation, but an impatience to drive A- 

 merica to extremity with us, by denouncing ven- 

 geance against any of her ships which might submit 

 to our new regulations. From these angry denun- 

 ciations on the part of the two great powers of Eu- 

 rope, joined to the embaYgo adopted by congress 

 (22d December), ensued a complete cessation of in- 

 tercourse between America and the continent of Eu- 

 rope. 



After this explanation of the stoppage of the A- 

 merican continental trade, it remains that we trace 

 its effects on the state of our money system. The 

 illustration will be useful, by conveying an idea of 

 the complicated structure of trade, and of the falla- 

 cious nature of first impressions in regard to it. Not- 

 withstanding the attachment to France, and the an- 

 tipathy to this country, produced by the war, for 

 American independence, the mercantile intercourse, 

 consequent on the peace of 1783, was chiefly car- 

 ried on with us. Britain alone possessed the capital 

 indispensable to the length of credit required by a 

 newly settled country ; and while we obtained the 

 almost total supply of manufactured goods, France 

 and the other parts of the continent have been con- 

 fined, in their intercourse with the United States, to 

 the sale of their particular articles of produce. Such 

 was the division of American trade twenty-five years 

 ago, and such did it continue, with little variation 

 in proportion, however increased in magnitude, till 

 the issuing of our orders in council. The more the 

 imports into the continent from the United States 

 were augmented by the prolongation of the war, the 

 larger became the exportations of British merchan- 

 dise to America. More than half the proceeds of 

 the American produce sold on the continent was re- 

 mitted to London, and appropriated to the purchase 

 of our manufactures. To ascertain with precision 

 the amount of these remittances is no easy matter ; 

 but from the official documents laid before congress 

 in 1806, they appeared, for some time back, to be 

 from four to five millions sterling annually, or nearly 

 L. 100,000 a-week. Such was the fund which, aa 

 Mr Baring remarks,* had of late formed the support 

 of our continental exchange. Little did our go- 

 vernment, in meditating the suspension of neutral 

 trade, anticipate the wound they were inflicting on 

 our own resources ; and little were the bank directors 

 aware of the effect of the American remittances on 

 the exchange, when they forbore to raise their voices 

 in opposition to this favourite measure. The pri- 

 vation of this aid was not immediate ; for although 

 the stoppage of American arrivals in the continent 

 took place in February 1808, the sale of goods and 

 remittances to England continued till the autumn of 

 that year. We were then deprived of this ample 

 fund, and the exchange underwent a depression, from 

 which it has not yet recovered. 



The next cause of the fall of our foreign exchan- 

 ges in 1808 was of a very different nature, and con- 

 sisted in the pecuniary aid contributed by us to rest 



* Pamphlet on the Orders in Council, 3d edition, p. 155. 



