BULLION. 



101 



Bullion. We cann.>t help thinking, although the remark hat 

 v*"*' nowhere been uncle, that had the bank suspension not 

 taken place in the spring of 17<)7, it would, in all 

 probability, have been unnecessary down to the pro- 

 Bent day. When the credit of an establishment stands 

 so high, there is no hazard of a run for cash for the 

 purposes of inland trade; the demand can be only for 

 foreign use. Now it so happened, that our great 

 continental subsidies came to a close in 1797, and 

 though thrice renewed since that time, they on no 

 occasion lasted so long as to create embarrassment to 

 the bank. Had we ventured, without the aid of the 

 restriction act, to form the coalition of 1799, the 

 ca-.li, which was at that time abundant in the bank 

 coffers, would have supplied the chief part of the sub- 

 sidies. This point once adjusted, it is scarcely pro- 

 bable that any considerations arising out of the want 

 of foreign corn, would have induced ministry to re- 

 sort to the unprecedented and alarming measure of 

 suspending cash payments. If we suppose that cri- 

 tical interval got over, we shall find no combination 

 of circumstances of more recent date, likely to neces- 

 sitate the adoption of the measure. The war in Por- 

 tugal, like the war in Flanders of 1793 and 179t, is 

 in a great measure defrayed by the supply of stores 

 from home ; the prohibitory decrees of Bonaparte 

 may prevent the recovery of our specie, but could 

 hardly have drained it from us ; and in regard to the 

 American continental intercourse, the bank directors 

 would not have failed to oppose the clamour of the 

 ship-owners, and stay the hand of ministers, had the 

 liability to cash payments been in force. It is true 

 that the alarm of invasion was great during the two 

 first years of the present war, but to those who ap- 

 prehend danger to the bank from such a cause, we 

 would submit two important considerations ; first, 

 that those alarms are, in great part, the act of our 

 own government, with the design of keeping us pre- 

 pared ; for, in the beginning of 1797, at the., very time 

 when ministers were loudly promulgating danger, 

 Mr Pitt, on finding that it had produced a drain of 

 cash, made this remarkable admission, in his confe- 

 rence with the bank directors (21st February), that 

 " the alarm was now become much more general than 

 he could think necessary."f The next point is, that 

 the dread of invasion need not, unless accompanied In/ 

 an unfavourable exchange, deter the bank of England 

 from increasing the amount of their circulation. Notes 

 of such high credit would continue to obtain curren- 

 cy for commercial as well as financial purposes, and 

 we have the authority of the Bullion Report ( p. 27. ) 

 for the inference, that, had the bank boldly increased 

 their issues in February 1797, there would have been 

 little danger of a stoppage an additional proof how 

 near we were to an exemption from that mortifying 

 alternative. . 



Fallen in some degree, as we must admit our paper 

 money to be, a retrospect of its history, and a com- 

 parison with that of eur neighbours, will not fail to 

 suggest to us several flattering considerations. In 

 looking to the example of the French republic, and, 

 more recently to those of Austria, Russia, and Swe- 

 den, we find their paper currencies doomed, as soon 

 as government interferes, to rapid depreciation. 



Among UH, ten year* elapt* after so great an invgv. 

 larity an the stoppage of cash payment!, without any 

 farther degradation per cent. The source 



of this comparative superiority will be found in our 

 established habit* of industry, aitdthut prompti- 

 tude and regularity in our transaction* which are it* 

 happy consequences. But the more immediate cause* 

 have been the productiveness of our taxes, and an in- 

 dependence of government, almost complete, ou the 

 part of the bank. Without denying the necectity of 

 partial improvement in the constitution of that cor* 

 poration, it may be justly said, that they never force 

 a note into circulation, and that the principal addi- 

 tion made to their paper nince the suspension, have 

 borne less the character of voluntary emission* thaa 

 of advances for the relief of tra '..-. Open as some 

 parts of their conduit are to cetuuie, we may safely 

 say, that, with thei xception of Holland in its better 

 dayb, no country in Europe would have afforded an 

 example of a delicate trust discharged with such a 

 share of honour and moderation. 



In comparing the price of bullion in our market 

 with the state of our continental exchange, since the 

 commencement of the present depreciation, we find a 

 difference often of eight per cent. ; that is, while bul- 

 lion ia fifteen per cent, above coinage value, the ex- 

 change with Hamburgh or Holland may be so much 

 as twenty-five per cent, against us. This difference 

 appears to represent the expence and hazard on the 

 conveyance of specie to the continent. In adverting 

 to the parliamentary transactions relative to bank 

 notes, we find that the act of 1797 went no farther 

 than suspending the arrest of the persons and goods 

 of a debtor after he had made an offer of payment in 

 bank notes; and even that the act of July 1S11, 

 founded on Lord Stanhope's bill, did not go so far 

 as to make bank notes a legal tender, its principal 

 provisions being to impose a penalty ou buying or 

 selling them at a discount. 



If we refer the practical results of trade to the prin- 

 ciples laid down by our illustrious countryman, Dr 

 Smith, we shall generally find reason to admire the 

 soundness of his conclusions. Though partial to the 

 use of paper money under due restriction*, he is yet 

 aware of its comparative instability, and gives hi* 

 readers cause to be prepared for tht? recurrence of such 

 embarrassments as those of 1793 and 1795. In re- 

 gard to the country banks, he apprehends no danger 

 from their multiplication, so long as they are bound to 

 pay their notes in cash, and are restrained from issuing 

 auy under five pounds. Such was their situation pre- 

 vious to 1797. When we consider the general prejudice* 

 against private banks, it seems not unlikely that their 

 exemption from interruption on the part of govern- 

 ment was, in some degree, owing to the weight of 

 l)r Smith's authority. Since 1797, though deprived 

 of their title to his recommendation, they have had 

 but too powerful a hold both on government and the 

 country, in consequence of the public necessities ; 

 and that remedy, which brings them back to the ob- 

 servance of former rules, must be slow of operation, 

 and accompanied, we fear, with considerable embar- 

 rassment to the public. (%) 



BUMALDA, a genus of plants of the clas* Pen- 



Report ofthe Lords' Committee, 1797. 



