on the High Price of Gold Bullian. 
other time mote. The quantity of cur- 
rency required will vary in some degree 
with the extent of trade; and the 
increase of our trade, which has taken 
Place since the suspension, must have 
occasioned some increase in the quan- 
tity of our currency. But the quantity 
of currency bears no fixed proportion 
to the quantity of commodities; and 
any inferenées proceeding upon such a 
supposition, would be entirely errone- 
ous. The effective currency of the 
country depends upon the quickness of 
circulation, and thé number of ex- 
changes performed im a given time, as 
well as upon its numerical amount; 
and all the cireumstances, which have 
a tendency to quicken or to retard the 
fate of ¢renlation, render the same 
amount of curreney more or less ade- 
quate to the wants of trade. A much 
smaller ammount is required in a high 
state of public credit, than when 
alarms make individuals call in their 
advances, and provide against accidents 
by hoarding ; and in a period of com. 
mercial security and private confidence, 
thaa when mutual distrust discourages 
pecuniary arrangements for any dis- 
tant time. But, above all, the same 
amount of currency will be more or 
less adequate, in proportion to the 
skill which the great money-dealers 
possess in managing and economizing 
the use of the circulating medium. 
Your committee are of opinion, that 
the improvements which have taken 
place of late years in this country, and 
particularly in the district of Londoa, 
with regard to the use and economy of 
money among bankers, and inthe mode 
of adjusting commercial payments, 
must have had a mach greater eitect 
than has hitherto been ascribed to 
them, in rendering the same sum ade- 
quate to 1 much greater ainount of 
trade aad payments than formerly. 
Some of those improvements will be 
found detailed in the evidence: they 
consist principally in the increased use 
ot bankers dratis in the common pay- 
mients of London; the coutrivance of 
bringing all such drafts daily to a com- 
mon receptacle, where they are ba- 
lanced against each other; the inter- 
mediate ayency of bill-brokers; and 
several oiher changes in the practice 
of London bankers, are to the same 
. effect, of rendering it unnecessary for 
them to keep so large a deposit of mo- 
ney as formerly. Within the Londou 
district, it would certainly appear, that 
715 
a smaller sum of money is required than 
formerly, to perform the same number 
af exchanges and amount of payments,’ 
if the rate of prices had remained the 
same. Jt is material also to observe, 
that both the policy of the bank of Eng- 
land itself, and the competition of the 
country baik paper, have tended to 
compress the paper of the bank of Eng~ 
land, more and more, within London 
and the adjacent district. All these cir~ 
eliistances must have co-operated to 
render a smaller augmentation of bank 
of England paper necessary to supply. 
the demands of our increased trade 
than might otherwise have been fe. 
quired; and shew how impossible it is, 
from the numerical amount alone of 
that paper, to pronounce =sbether it is 
excessive or not: 3 more sure criterion 
must be resorted to; and such a crite- 
rion, your committee have already 
shewn, is only to be found in the state 
of the exchanges, and the price ef 
go'd bullioa. 
The particular cifeumstances of 
-the two vears which are se remark- 
able inthe recent history of our cir- 
culation, 1793 and 1797, throw great 
licht upon the priuciple which your 
committee have last stated. 
In the year 1793 the distress was . 
occasioned by a failure 6f confidence 
in the country circulation, and a con- 
sequent pressure upon that of London. 
The bank of England did not think 
it advisable to cularge their issues to 
meet this increased demand, and their 
notes previously issued, circulating less 
freely in conséquence of the alarm 
that prevailed, proved insuficient for 
the necessary payments. In this cri- 
sis, parliament applied a remedy, very 
similar, in iis effect to an eularee- 
ment of the advances and issues of 
the bank, a loan of exchequer bills 
was authorized to be made to as many 
mercantile persons giving good. se- 
curity, as should appiy for them; and 
the confidence wiich this measure 
diffused, as weil as the increased means 
which it afforded of obtaining bank 
notes through the sale of the exche- 
quer bills, speedily relieved ihe dis- 
tress both of Londow and the country. 
Without offering an opinion upon the - 
expedieucy of the particular mode ia 
which this operation was effected, 
your committee think it an import- 
ant illustration of the principle, that 
ao enlarged accommodation is the true 
remedy for that occasional failure of” 
confidence 
