onthe High Price of Gold Bullion. 713 
currency consists entirely of the pre- 
cious metals, or of paper convertible 
at will into the precious metals, the 
natural process of commerce, by es- 
tablishing .exchanges among all the 
different countries of the world, ad- 
justs, in every particular country, the 
proportion of circulating medium to 
its actual occasions, according to that 
supply of the precious metals which the 
mines furnish to the general market 
of the world. The proportion, which 
is thus adjusted and maintained by the 
natural operation. of commerce, can- 
not be adjusted by any human wisdom 
erskill. If the natural system of cur- 
reocy and circulation be abandoned, 
and a discretionary issue of paper 
money substituted in its stead, it is 
vain lo think that any rules can be 
devised for the exact exercise of such 
a discretion; though some cautions 
may be pointed out to check and con. 
trol its consequences, such as are indi- 
eated by the effect of an excessive issue 
upon exchanges and the price of god. 
The directors of the Bank of England, 
in the judgment of your committee, 
have exercised the new and extraordi- 
nary discretion reposed in them since 
1797, with an integrity and a regard to 
the public interes according to their 
conceptions of it, and indeed a degree 
of forbearance in turning it less to the 
profit ef the Bank than it would easily 
have admitted of, that merit the con- 
tinuance of that confidence which the 
Public has so long and so justly felt in 
the integrity with which its affairs are 
directed, as well as in the unshaken 
stability and ample funds of that great 
establishment. That their recent po- 
licy iuvolves great practical . errors, 
which it is of the utmost public im- 
portance to correct, your committee 
are fully conviaced; but those errors 
are less to be imputed to the Bank 
directors, than to be stated as the 
effect of a new system, of which, 
however it originaicd, or was ren- 
dered necessary as a temporary expedi- 
ent, it might have been well if pariia- 
liament had sooner taken into view all 
the couseguences. When your com- 
mittee consider that this discretionary 
power, of supplying the kingdoin with 
circulating medium, has been exertis. 
‘England. 
ed under an opinion that the paper 
coitld not be issued to excess if advanc- 
ed in discounts to. merchants in good 
bills payable at statéd periods, and hke- 
wise under an opinion that neither the 
price of bullion nor the course of ex- 
changes need be adverted to, as afford- 
ing any indication with respect to the 
sufficiency or excess of such paper, 
your conunittee cannot hesitate to say, 
that these opinions of the Bank must 
be regarded as in a great measure the 
operative cause of the continuaace of | 
the present state of things. > 
Your cominitiee will now proceed ta. 
state, from the information which has 
been laid before them, what appears to 
have been the progressive increase, and 
tobe the present amount, of the paper 
circulation of this country, consisting 
primarily of the notes of th Bank of 
England not at present convertible into 
specie; and, in a secondary manner, of 
the notes of the country bankers which 
are convertible, at the opiioa of the 
holder, into Bank of England pape. 
After having stated the amount of 
Bank of England paper, your commil- 
tee willexplaim the reason which in- 
duce them to think that the numerical 
amount of that paper isnot alone to 
be considered as decisive of the gues- 
tion as to its excess: and before stat 
ing the amount of country bank paper, 
so far as that can be ascertained, your 
committee will explain their reasous 
for thinking, that the amount of the 
country bank cireulation is limited bs 
the amount of that of the bank of 
i. It appears from the accounts laid 
before the committees upon. i 
affairs in 1797, that for several years 
previous to the year 1796, the aver- 
age amount of bank notes in ecircu- 
lation was between £10,000,000 and 
£11,000,000. hardly ever falling be. 
low £9,000,000, and not often excerss 
ing to any great amount £11,000,000. 
The following abstract of the seve- 
ral accounts referred to yonr coimmit- 
tee, or ordered by your commiites 
from the bank, will shew the pro- 
gressive increase of the notes froin. 
the year 1798 to the end of the !ast 
year... 
