390 Jones—Relation of Economic Crises to Legislation. 
held that the cause of depreciation was an undue increase in the 
issue of the bank. They recommended as a remedy the return 
to a system of redeemable notes. So long as the notes in cir¬ 
culation could not be exchanged for gold, they explained, there 
could be no regulative connection between them and the course 
of exchange. The entire theory of the Bullion Report centers 
in the idea that the price of money, irredeemable paper in this 
instance, depends upon its quantity. 1 Some regulative of its 
quantity must then be established in order to prevent a fall in 
its price. Such a regulative is only to be found in a constant 
convertibility. 2 To make the bank paper redeemable in coin 
is to restore the proper and natural control of its amount. The 
theories of money which grew out of the principles here laid 
down were of the greatest consequence in the discussion which 
followed. They prepared the way for more than the resumption 
of payments. 
The history and condition of English foreign trade had been 
meanwhile made the subject of careful study by Thomas Tooke 
in his “History of Prices. ” This author, incomparably the 
clearest thinker of his time, agreed entirely that there was a 
diminution in the value of paper in circulation. He found the 
reason of it, however, in the unfavorable balance of trade which 
had been caused by English war expenses. 3 
1 Wagner,“Lehre,” pp. 81 and 82. But absolute accuracy was scarcely to 
be expected. Wagner says: “Allerdings muss man einraumen, dass der 
Report ausdrucklich zugiebt, der numerische Belauf der Banknoten 
konne nicht das einzige Kriterium abgeben, zu verschiedenen Zeiten, je 
nach der Lage des Handels, sei eine verschiedene Menge IN oten fur den 
Verkehr nothwendig. Allein trotzdem weicht er selbst bereits von die- 
sem Gedanken ab und will durch Verminderung der Notenmenge vor- 
nemlich eine Preiserhohung derselben bewerkstelligen und noch mehr 
wird in Folge von den Anhangern der Theorie der Einfluss anderweiter 
Umstande ausser Acht gelassen, so dass man sag6n kann, nach dieser 
Meinung war dev numerische Belauf der Noten sogarganz allein der Be- 
timmer ihres Preises .” 
2 That Ricardo was not at the standpoint of the currency school is 
proved, for one thing, by his belief that the law requiring country banks 
to redeem their notes in the notes of the Bank of England was sufficient 
to prevent any abuse of their privileges. See “Recardo’s Works” (Mc¬ 
Culloch ed.) p. 301. 
8 Tooke, IV, pp. 132-142. 
