100 



BULLION. 



Bullion, but it is couched in general terms, and the topic is 

 forthwith exchanged for an argument on the degra- 

 dation of paper. 



We have already mentioned, that the fourth divi- 

 sion of the Report, which treats of country banks, is 

 particularly liable to animadversion. Without dwel- 

 ling on the errors in the attempt to ascertain (p. 29.) 

 the increase of their circulation, we shall confine our- 

 selves to the consideration of a general position, ta- 

 ken from Mr Thornton's book on paper money, and 

 couched (Report, p. 28.) in very prepossessing terms. 

 *' If an excess of paper be issued in a country dis- 

 trict, while the London circulation does not exceed 

 its due proportion, there will be a local rise of prices 

 in that country district, but prices in London will 

 remain as before. Those who have the country pa- 

 per in their hands, will prefer buying in London where 

 things are cheaper, and will, therefore, return that 

 country paper 911 the banker who issued it." The 

 error of this argument lies in supposing, that the 

 London market forms a direct check on the country 

 markets, as if the commodities purchased in the one, 

 were not, in general, quite different from those of the 

 other. In the metropolis, imported merchandise 

 forms the great article of sale ; in the country towns, 

 the produce of the land, and the local manufactures. 

 The check on the over-issue of paper must arise from 

 very different sources, and will be found to consist fun- 

 damentally in the obligation to pay interest ; a sacri- 

 fice which no man will incur without cause. Ano- 

 ther and a more serious fault in this part of the Re- 

 port, consists in the loose manner in which the great 

 rise in the price of commodities is charged on our pa- 

 per currency. The committee dwell largely on the 

 magnitude of the evil, without attempting precision 

 in regard to the share which the over-issue of paper 

 may have had in it. From this vague mode of ex- 

 pression, the public are led to infer, that the unfor- 

 tunate rise of our commodities might have been pro- 

 duced by the conduct of the bank, although neither 

 new taxes nor new corn-laws had been in existence. 

 Now we have no hesitation in attributing a part of 

 the rise to over-issue of paper ; but, on resorting to 

 the ordeal of close calculation, we find that part 

 much smaller than is generally believed. If to the 

 depreciation of three per cent, which has lasted since 

 1800, we add six or seven per cent, for the overissue 

 of the last three years, (and more we cannot think 

 applicable to our home transactions, whatever may be 

 the case as to our foreign,) we set down in all an en- 

 hancement of ten per cent, to charge of our paper 

 currency. But the total rise in the price of commo- 

 ditie* since the bank suspension of 1797, exceeds, aa 

 is well known, sixty per cent., leaving five-sixths of 

 the burden to be otherwise accounted for. In ano- 

 ther and a more extended point of view, we should 

 have little difficulty in bringing an additional part of 

 the charge against paper money. War is the great 

 cause of the rise of prices ; and the aid of paper mo- 

 ney, perhaps the exemption of the bank from cash 

 payments, may be pronounced one of the principal 

 reasons why we are not now at peace. But such is 

 not the meaning of the bullion committee. They 

 make no reference to the rise of prices produced by 

 the use of paper money ; their business is with the 



abuse of it ; and there, we cannot help thinking, they 

 have over-rated the extent of the effect. 



It would have been desirable also, tha^ the bullion 

 committee, in urging the pernicious effect of our pa- 

 per currency on the exchange, had more clearly dis- 

 tinguished between non-convertibility and over-issue. 

 In the first and more accurate part of the Report, 

 the non-convertibility of our paper into cash, enga- 

 ges a share of their attention, which seems to be af- 

 terwards lost amidst their extraordinary calculations 

 of over-issue. It has unfortunately happened, that 

 several of the writers who have followed on the same 

 side have laid the chief stress on the latter ; excess of 

 quantity being, as Mr Burke said of force, one of the 

 apparent means most likely to arrest the belief of su- 

 perficial inquirers. To these animadversions on the 

 Report, it is proper to add, that it is rather an able 

 exposition of the doctrines of others, than an original 

 work ; a remark in which those to whom Dr Smith's 

 book, Henry Thornton's Inquiry, and the Thought's- 

 on the Restriction Bill by Lord King, are familiar, 

 will have no hesitation in joining. Yet, in spite of 

 all these deductions, the Report of the Bullion Com- 

 mittee is entitled to great consideration. It affords 

 an example of what we have long wanted in this coun- 

 try the application of the principles of political eco- 

 nomy to the practice of trade. It is the fruit of 

 close thinking and wide research, and its errors are 

 chiefly to be ascribed to the singular complexity of a 

 subject, a knowledge of which would appear the task 

 of years rather than of months. If we make allow- 

 ance for the impressions, in several respects exagge- 

 rated, under which it was written, we shall find rea- 

 son to praise its moderation, particularly when put in 

 contact with the positive and absolute language of 

 other productions. We shall conclude our remarks 

 on it by desiring those to whom this qualified enco- 

 mium may seem too favourable, to compare it with 

 the hasty statements and meagre reasoning which so 

 often characterize the labours of other parliamentary 

 committees. 



If we direct our attention to the principal writers 

 who have appeared on this most fertile of topics, we 

 find in Huskisson a great deal of anxiety to make the 

 public thoroughly acquainted with the merits of the 

 question ; in his antagonist Bosanquet, strong evi- 

 dence of acuteness, unaccompanied, however, by an 

 adequate knowledge of general principles ; in Ricar- 

 do, accuracy and promptitude in calculation. Among 

 the lesser tracts, Jasper Atkinson's Letter to a Mem- 

 ber of Parliament, contains a clear and temperate ar- 

 gument against the Bullion Report ; while Wilson's 

 Observations on the Depreciation of our Currency, 

 will remove the doubts of the few who question the im- 

 policy of our corn-laws. In Canning's printed speech, 

 the reader admires more a display of oratory, than a 

 knowledge of the subject; while that of Mr George 

 Johnstone claims attention for polished language, as 

 well as for perspicuous illustration. He who desires 

 to acquire a knowledge of the intricate subject of ex- 

 change, will do well to study the publication of 

 Blake ; and an instructive example of the causes of a 

 bank stoppage will be found in the official report of 

 Dupont de Nemours on the embarrassments of the- 

 Basque de France in 1806. 



