720 



BRITAIN. 



Were their miseries to be 



Brit.iin. havoc and devastation ? 



' V ~T7| traced to the experiment of reform ? Or rather, was 



i it not the effect of the resistance with which their re- 



l o 1 U. . , . . r 



spective governments treated every proposition or re- 

 dress and amelioration ? Had Sicily reformed ? and 

 what, notwithstanding the liberal assistance of Great 

 Britain, will be its fate, unless that government shall 

 be wise enough to accede to the reasonable wishes of 

 the people ? Subjugated Europe had fallen, not be- 

 cause she made rash experiments on her systems of 

 government, but by sanctifying every abase, and per- 

 tinaciously refusing to accede to the just desires of 

 the people. She destroyed the moral energies, and, 

 though she placed arms in the hands of those who 

 ought to be her defenders, there remained nothing of 

 influence over their hearts, when brought in contact 

 with the enemy. The motion was negatived by a 

 majority of 234 to 115. 



Report of Among the prominent events of the session, it 

 rhe bullion would be improper to omit mentioning the report of 

 committee. t ne bullion committee. The restriction of cash pay- 

 ments imposed upon the bank in 1797, have been no- 

 ticed in the events of that year. Since that period, 

 the paper money, not only of the bank of England, 

 but of the country banks, had multiplied so rapidly ; 

 the value of that paper money had so much diminish- 

 ed in relation to the price of all articles of life ; the 

 market price of gold had risen so much above its 

 mint-price, and coin and bullion had become so scarce, 

 that these concurring appearances were naturally held 

 in the general opinion, as cause and effect. It had 

 been indeed predicted by many, that the dispensation 

 from cash payments permitted to the bank, would 

 produce the effect of depreciating paper by its abun- 

 dance, and of raising the relative price of gold in pro- 

 portion, by offering temptations to melt the coin, and 

 to export both coin and bullion ; but these predic- 

 tions were disregarded in 1797, by many who now 

 thought more seriously on the subject, f or who did 

 not imagine that the restriction act would be suffered 

 to be so long in force. A committee during the last 

 session, had been appointed to inquire into the high 

 price of gold bullion, to take into consideration the 

 state of the circulating medium, and to point out a 

 remedy. The report of the bullion committee was 

 iven in on the 8th of June. They first inquire into 

 the price of bullion, and find, that a guinea is worth 

 about 23 shillings of paper money ; and this degree of 

 depreciation of paper currency is confirmed by the 

 rate of foreign exchanges, which are from 15 to 20 

 per cent, against England, though the real exchange 

 would at present otherwise be in her favour. " It 

 results from this unnatural state of things, that while 

 a good guinea can only be current at 21 shillings, 

 and that a guinea too light to pass in currency, gains 

 value by its deficiency, and is actually worth 22 shil- 

 lings. It is impossible, therefore, that any gold coin 

 should remain in currency ; and the result is, that the 

 public lose about two shillings on a guinea on their 

 income and expenditure. 



The quantity of country bank notes is stated by 

 the committee to be greatly dependent on the quan- 

 tity of bank of England notes in which they are pay- 



able. One of the witnesses estimates these country 

 notes at twenty millions ; but they are probably worth * 

 more than thirty millions, as the gold coin in circu- ' 

 lation used to be estimated at that sum when there 

 were only ten millions of bank of England notes, 

 making the then circulation forty millions, besides 

 country notes, at that time perhaps five millions. 

 Forty- five millions must have been augmented to fif- 

 ty-four millions, to produce a depreciation of 20 per 

 cent, as at present, whereby the country bank notes 

 appear to amount to about thirty-four millions, the 

 bank of England notes being twenty millions in cir- 

 culation ; herein supposing the augmented rapidity 

 of pecuniary transactions to balance the greater quan- 

 tity of them, and that the same amount of circulat- 

 ing medium is now as necessary as in 1797. 



In the report of the committee it is stated, that 

 the only true and effectual protection to the public 

 against an excess of paper currency, is the obligation 

 on the parties who issue it to pay it in specie at the 

 will of the holder; that, since the year 1797, when 

 that protection was taken away by the bank-restric- 

 tion bill, the bank have extended the circulation of 

 their notes from ten to twenty-one millions ; that the 

 country banks have also very considerably extended 

 the circulation of their notes ; that this increase of 

 the circulating medium enhances the price of every 

 commodity, raises the market price above the mint 

 price of bullion, and occasions the present unfavour- 

 able state of the foreign exchanges. 



While these views of the bullion committee were 

 supported in numerous publications, and became an 

 object of general interest, the directors of the bank, 

 and the advocvites for the new system, contended, in 

 opposite pamphlets, that the increased quantity of 

 the circulating medium is no proof of its excess ; 

 that the increase of the circulating medium is a sti- 

 mulus to the whole commercial world, and extends 

 our capital ; that the amount of the circulating me- 

 dium is not greater than the public necessities re- 

 quire ; that the amount of bank notes issued cannot 

 operate upon the price of bullion, or on the foreign 

 exchanges ; and therefore, that all the evils com- 

 plained of must he traced to other causes. 



That the value of money in these kingdoms has 

 decreased, or, in other words, that the price of every 

 article has increased to an unprecedented degree with- 

 in these few years, is a fact of general notoriety ; 

 and coupling this rapid change in the relative value of 

 money and commodities, with the increased circula- 

 tion of paper currency that has followed the bank- 

 restriction bill, it will be difficult to consider them as 

 having no bearing on each other. In the present 

 state of things, the excess of bank notes cannot, as 

 the governor of that incorporation asserted before 

 the bullion committee, receive any check ; for the 

 directors will give the holder of a note nothing for it, 

 except, indeed, a new note for an old one; and 

 the demand for discounts furnishes them with the op- 

 portunity of replacing those that are paid in, by a 

 constant succession of fresh ones. An excess of pa- 

 per currency cannot be exported and employed in fo- 

 reign commerce like specie, and therefore it is neces- 



-{ Mr Huskisson, the great advocate for the resumption of cash payments, acknowledges that this was his own case. 



