B A 
from the manufacturer; and an important variation in the 
rate of exchange on the continent, furnififed a pretence to 
foreigners to ’withhold their remittances from both. The 
manufacturers in their diftrefs applied to the bankers in 
the country for relief; but as the want of money became 
general, and that want increafed gradually by a general 
alarm, the country banks required the re-payment of old 
debts, being utterly incapable of increaling them, and 
which of courfe brought their own fituation to the ted. 
In this predicament the country at large could have no 
other refource but London ; and, afier.havjng exhaufled 
the bankers, that refource finally terminated in the bank 
of England. In the mean while, the alarm in the coun¬ 
try continued to increafe ; confidence in their banks va- 
■niihed; every creditor was clamorous for payment,-which 
lie infilled (liould be made in gold, and which was com¬ 
plied with, until the bankers in London were exhaufled. 
At firfi tiie bank accommodated themfelves to circumflan- 
ces, and furni (lied large (applies; but unfortunately the 
directors cauglrt tile panic; their nerves could not flip- 
port the daily and condant demand for guineas; and for 
the purpofe of checking that demand, they curtailed their 
difeounts to a point never before experienced, and which 
placed every part of the commerce of the country in a con- 
iiderable degree of danger. Under all circumftances, it 
might perhaps have been right for the bank to leflen the 
amount of their difeounts, or to leffen the accommoda¬ 
tions which individuals had been accndomed to receive ; 
but then it ought to have been gradual; their determina¬ 
tion, and the extent to which it was carried, came like an 
electrical fliock. In fuch cafes the bank are not an inter¬ 
mediate body, or power : there is no refource on their re- 
fufal, for they arc the dernier refort. The laws againd 
ulury effectually dedroy every other means of relief in this 
country, whilft experience has proved, at Hamburgh, at 
Amfterdam, and other places, that the mod effectual mode 
of keeping the rate of filtered low, is to leave it free from 
every redriCtion. As the determination of the bank was 
founded upon the demand which came from every quar¬ 
ter of the country for guineas, it may be proper to notice 
the caufe which gave rife to the demand for guineas, and 
which feems attributable to the three following circum¬ 
ftances: id, As a medium of remittance to foreign parts, 
to ftipply the want of bills of exchange. 2dly, For the 
purpole of hoarding in the country, from a want of con¬ 
fidence in the government and in the circulating paper. 
3dly, To enable country banks to difeharge their demands, 
whilft confidence in government, and in the bank of Eng¬ 
land, remained entire. 
The firft is the mod; dangerous predicament, as being 
moft injurious to the country ; every meafure ought to be 
taken to palliate or prevent it, prohibitions or bankruptcy 
excepted ; but it is inevitable, if we filial 1 continue for a 
long time to have more to pay to foreigners than we re¬ 
ceive from them ; or, in other words, if the balance of 
trade is againft us. It was notorious, at the time, that 
-arge quantities of gold and filver were received from 
France ; of courfe none could be fent thither, as is obvious 
from the then courfe of exchange. The following cal¬ 
culation will ferve for Amfterdam, viz. 
100 guineas coft, with freight, infurance, 
and charges 
Sold atyi2 each, is f 1200, agio ioo§ per 
cent, is bancoy'1193, 11, and at the ave¬ 
rage exchange of 38 6 from January to 
March, 1793, is 
Lofs - 
1. s. d. 
106 13 o 
103 6 9 
3<>3 
The price of guineas at Amfterdam was invariably/h 2, 
from January to the 12th of April, 1793; but guineas 
were hardly ever in fufficient quantity in Holland to become 
an object of trade, until the Britifti troops landed there in 
February, 1793. The calculation for Hamburgh appears 
ftill more unfavourable: 
N K. 6 7s 
100 guineas coft, with charges, - £ 106 13 o 
They contain, in ducat gold, at Hamburgh, 
225 ducats, at 96-^ banco per ducat, is 
marks banco 1357, at the average ex¬ 
change of 35 3 - - - 102 to 6 
Lofs - - - - - 426 
The price of 96A is the par for a ducat, which was about 
the average price for January, February, and March, 1793. 
In this fituation of foreign exchange it was impoflible that 
the coin of the country could have been exported : indi¬ 
viduals will not ad contrary to their own filtered, which 
operates in fuch cafes more effectually than dels of parlia¬ 
ment ; and is in reality the only wife reftriCtion which ought 
to exift, in a country fo much dependant on its trade. In¬ 
dividuals muft pay freight, infurance, brokerage, and fome 
fmall expences, in addition to the lofs on the price; fo 
that no impartial perion can entertain appvelienfions for a 
moment, under fuch circuniftances. The export of fo¬ 
reign gold and filver ought always to be free, and the bank 
ought to fupply the demand, whenever it fnall arife; un¬ 
der a certainty that the export will produce a beneficial 
eftect on the courfe of exchange, and thereby enfure its 
return (provided the balance of trade is in our favour), 
with additional profit. The coin of the country may, how¬ 
ever, be in a different fituation ; but on this fubject we will 
not enter, as it will require a volume to difeufs. If the 
balance is againft us, whether arifirig from our trade, or as 
the refuIt of fubfidies paid to foreign powers, that balance 
muft be paid in gold or filver ; and, if there is not fuffici¬ 
ent foreign bullion in the country for the purpofe, guineas 
muft and will be fent, or bank notes will be reduced to an 
enormous difeount: it is in vain to prohibit what cannot 
be hindered ; the fevered law will only tend to throw that 
profit into the pocket of the fmuggier which would other- 
wife belong to the fair trader. 
We fhould diftinguilh, however, between that drain 
which is the refult of a balance againft the country, and 
forced operations for temporary purpofes, which govern¬ 
ment, with the aid of the bank of. England, can more or 
lefs prevent. Thus, for inftance, at the commencement 
of the French revolution, the comptroller-general endea¬ 
voured to draw filver from hence, and from other places, 
to ferve temporary purpofes at Paris, which the mi hi lie r 
flopped. If his object was to benefit this country, or to 
diftrefs the finances of France, he ought to have encoura¬ 
ged and promoted fuch operations; or, which would have 
been moft effectual, he ought to have remained a lllent 
IpeCtator. Such was the ftate of exchange at the time, 
that each tranfaflion coft 12J per cent, and, as thole ope¬ 
rations could have been performed four, five, perhaps fix, 
times in the courfe of a year, the benefit to this country, 
and the lofs to France, could only have been limited by the 
extent of the powers of the latter; and which muft in 
time be exhaufled, when 100I. fent from hence in filver 
fliall be found to return in two, or at moft in three, months, 
with an addition of 12I. jos. for profit. Such tranfadlious 
would have produced a real effeCt without the aid of aC.ts 
of parliament, or the hand of power; whilft the wild and 
ignorant fpeculations on the confequences of the atlignats 
and mandats of France, have vanilhed in finoke. 
To the charter of the bank of England this country is 
indebted in a high degree for the profperity (he has enjoy¬ 
ed ; and to a ciatife in that charter, which prohibits any 
other eftablilhments of a fimilar defeription, we may look 
as to a fliield to protect ns againft projects fuch as thole 
of the South Sea, the Miffifiippi, the Air bank, &c. &c. 
It ought to prove a deciliye anfwer to thofe who have fug- 
gefted an increafe of paper by means of a new bank, that 
the bank of England can, and muft,iffue to the full extent 
which the circulation of the country can fupport with 
fafety ; for their charter obliges them, and it is their in- 
lerelt to do fo. If an addition is made by means of a new 
eftablifhment, the paper of one, perhaps of both, banks, 
muft fuller a depreciation, and cannot circulate at par. 
Paper, 
