36 
would have compelled a diminution of if- 
fues, by diminifhing the ftock of f{pecie, 
which could only be replaced at a lofs 
proportionate to the exilting rife of ex- 
ehange; and your committee obferve, that 
in fact as well as in theory, the refult of 
fuch practice always was and mult be the 
redrefs of the unfavourable exchange. 
But the Reftriction Act freed the direc- 
tors of the bank of Ireland from that ne- 
ceflity ; infomuch, that your Committee 
have to obferve, that fo far from contratt« 
ing their iffues, in conf:quence of the uns 
favourable exchange, they have increafed 
them; which the ftate of the exchange 
weuld have prevented them from doing, 
had there been no reftrition to proteét 
them frem the obligation of paying their 
notes in cafh. 
_ The fact mentioned by Mr. Colville, of 
the exceflive iffue of paper in 1753-and 4, 
and the confidcrable rife of the exchange 
again Ireland which accompanied it, 
confirms the pofiion, that exceflive iffues 
ef paper produce a proportionate rife in 
the rates of the exchange; and your Com. 
mittee are ftill further confirmed in this 
epinion, by obferving, that the exchange 
immediat:ly became favourable to Ireland, 
when the failure of the Dublin banks, . 
which enfued, had annihilated that excefs 
ef paper. 
The reafon is obvious; the nominal] 
yates of exchange are influenced by the 
medium in which the payments are made, 
and the quantity of that mecium, necef- 
fairy to effect a given payment, muft be 
increafed as the value of the medium di- * 
winihes. This muft equally take place, 
whether the payments are made in a de- 
graded or adulierated coin, or in a depre- 
ciated pap-r. 
There is a circumfance mentioned by 
‘Mr. Marfha!l, from Dr: Adam Smith, 
which happened in king Wiiliam’s reign, 
jn the intercourfe between London znd 
Holland, which eftablithes the point, that 
‘a depreciated currency will not fail to af- 
feet the exchange. The Britith ecin was 
at that.time degraded in England 25 per 
cent. below its nominal value, ard the 
compuied. exchange with Holland was 25 
pir cept. againit England; but on the re- 
tormation.of the .com, the exchange fell 
to par. If paper, therefore, by depreci- 
ation, cores to reprefent a leis quantity 
of money than it profefies to do, it mult 
‘make the exchange, which it ia to pay, 
appear unfavourable; in the fame manner 
as coin, in which it. were to be paid, 
would have done, if, by, degradation, it 
thould cecle to coxtain the fame portion of 
Report of the Committee on the State of Ireland, [Aubuft 1, 
gold which it ufedto do; and the removal 
of. the degradation in the one cafe, and of 
the depreciation in the other, would have 
the fame eifect in bringing the exthange 
to par; or whatever might be its real 
ftate. 
That this depreciation in Ireland arifes 
almoft entirely, if not folely, from an ex~ 
cefs of paper, appears highly probable s 
and your Committee, in adverting to the 
ifiies of the bank of Ireland, do not 
mean to decide, whether the directors of 
it might not have had ftrong reafons for 
their condu& ; but they conceive it their 
duty to call the attention of the Houfe te 
a matter of fo much importance. 
In Marchy 17973 when the reftriction 
took place, their circulating paper a- 
mounted to between 600,000].and 700;000L 
and on the 1ft of January, 2804, it was 
2,986,999. : 
_ From 1,000,000l. to 1,266,000l. of this 
increafed paper, confifted of notes of il. 
up to three guineas, which, together with 
a {mall part of the iffue for larger fums, 
may be ¢onfidered as chiefly occupying 
the place of the guineas withdrawn; fe 
that if the whole of their paper in circu- 
lation in January laft be divided into five 
parts, one will appear neceffary as having 
exifted prior to the reftri€tion ; two are to 
be fet down, as occupying the place of 
the gold withdrawn ; and no fufficient rea+ 
fons have been given for the iflue of the 
remaining two parts, or for the bank net 
having diminifhed its paper, when ex- 
change rofe, in the fame manner as they 
muft have done in cafe the Reftriction A& 
had not been in force. The iffues of the 
bank of England afford a very different 
view. They were, on the average of three 
months, toz 5th March,1797, 10;4.31,700l. 
whereof 268,500]. were 2]. and 11. notes; 
and they were, on the 25th of January, 
1804, 17,761;0901. whereof 4,711,150]. 
were 2], and sl, notes. : | 
But your Committee are far from fay- 
ing that local confiderations, and different 
circumfances at the moment, might not 
have had a feparate influence en the twe 
banks; they would only add, that exchange 
began to rife in 1799, and that the circu- 
lation of the paper of the bank of Ireland 
was, as Mr. Colville flates, concomitant 
and extended with it ; and that upon com~ 
paring the iffues of the bank of Ireland 
with the rates of exchange, a ftrong pre- 
fumption arifes of the connection between 
an increafed iffue and a high exchange. 
For in March, 1797, the paper of the 
bank was between 6 and 700,0eal. ; and 
exchangs im Dublin, 53 to 63. - = 
April 
