212 Paper Currency. 



"5. If the inferior currency be removed, the exchanges will be 

 turned, the outflow will stop, and, if any vacuum is created, gold will 

 flow in to supply it. Gold will not flow in while the inferior currency 

 fills the channels of circulation. 



" 6. The amount of gold in the world will suffice to perform the 

 exchanges of the world. If there be more or less, it will only affect 

 the average level of prices, the world over. 



" Every nation will have that portion of the stock of gold in the 

 world, which is proportioned to its trade. Each nation will have just 

 as much as it needs. 



"A better and a worse currency cannot circulate together. The 

 worse will drive out the better. 



" The committee also, incidentally, condemn the usury laws, and the 

 law forbidding the exportation of the precious metals/' 



This report gave the people something to talk about; but not till 

 after the commercial crisis of 1818 was any real, honest work done in 

 the direction of a resumption of specie payments. 



Finally, the Bank of England was authorized by law to establish a 

 scale of prices for gold in exchange for its notes. In October, 1820, 

 the bank began to redeem its notes, the rate being changed from time 

 to time till May, 1823, when the amount of the notes outstanding had 

 been reduced, so that they were redeemed at full value. Kesumption 

 was accomplished. 



The events in English history which we have been reviewing oc- 

 curred during the latter part of the reign of George III, which was 

 from 1760 to 1820, the longest in English history. 



Eussia, Austria, Italy and other countries have had their experience 

 with ' 1 fiat " money. A review would show the same results which 

 have been illustrated, and we will pass on to consider the career of 

 this paper delusion in the United States. 



About the earliest issue of paper currency in this country was in 

 1690 and by the colony of Massachusetts, which had sent an expedi- 

 tion into Canada and paid the soldiers in paper promises. The other 

 colonies thought that the issuing of paper currency was a bright idea 

 and adopted the plan. In those days, business was not very active. 

 Communication between different points was slow and irregular. The 

 currency was used, with varying success, till 1748, when all New Eng- 

 land, "New York, Pennsylvania, Maryland, North Carolina, South 

 Carolina and Virginia, found that more of their paper was presented 

 for redemption than they had provided for. Business was unsettled. 

 Whenever any thing was offered for sale, before a price was fixed, the 



