This

been made to the disadvantage of the tension,) as will place our national wealth country, had our currency been of the upon its surest possible basis, which can precious metals, or had there been no de-only be done by substituting the precious preciation of paper. At this moment the metals for the present currency. exchange is getting better, but this must brings me to the last consideration, the be attributed to the remittances made by remedy to be applied to heal the present the Americans, who have got their cargoes evils; or rather the mode best adapted into Tonningen, and so to Hamburgh; of to restore to the country the precious which there has been between one and metals, or to make paper have the true two hundred sail. Those persons who representation of them.-To expect to wish the national debt dissolved, will pro- abolish the monopoly of Banking, and to bably be gratified, if the present state of have established a regular competition in the Banking system goes on several years incorporated companies, is certainly ablonger; and if this was the only evil to be surd to calculate upon; nor do I know, apprehended, this prospect might honestly since the competition is already very be a source of sincere congratulation. But great from the unincorporated compait must be remembered, that not the na- nies, which must be nearly as efficient, tional debt only would become of nominal that it is indispensable. Indeed I think value, but the circulating medium, the re- it is not. It is evident, that as the prepresentative of the whole wealth of the cious metals are banished abroad, should empire, would become so; it could no Parliament pass an act obliging the Bank longer perform its functions. There would of England to answer their notes with be no substitute; the precious metals are specie, it would be altogether impossible abroad, and can only be recalled by the for the Bank to comply. To oblige them, slow operations of commerce. In the and all other Banks, to curtail their emismean time we have an enemy thundering sions, would be a law, that might so easily at the gates; he has nine times the phy-be evaded and so difficult to enforce, that sical strength that we have, We are be- this likewise would be inoperative; nor come his only enemy, He has been if it could be enforced, would it probably watching for this crisis. He knows the answer the purpose of recalling the predestruction of this country is the only way cious metals into the country. The only to consolidate the present order of things judicious remedy then, is to prescribe by in France; this alone will give perpetuity act of parliament, the circulation first of to his usurpation. But while this empire notes of certain descriptions. It must not remains unimpaired, his death will be be by obliging the Banks to call in their the signal for another revolution. In the largest notes; for this would be making distracted state of the finances of this way only for those of other denominations. country, which seems to be threatened, But it could not be so, if it were enacted all his energies will be put forth. Con that first one pound notes and under fidence among ourselves, how could it should no longer circulate; for then, that continue ? The body-politic in a con- part of the currency which is now of nevulsion, without nerves! and more than cessity filled with notes of this descripthis, I leave for the imagination of your tion, must of necessity be filled with readers.-The declension of our com- specie. It is very probable that half the merce abroad has been certain, but the money in circulation is money of this dedepreciation of our currency has been nomination; but no doubt a great part of greater; and, therefore the nominal it acts in the office of notes of a higher amount of the revenues have encreased, denomination; of course notes of a higher while the real value has diminished. The denomination would be immediately isgovernment and the nations are under sued, to fill the void occasioned by drawthis delusion, they think we are pros- ing away the one pound notes; but for pering while we are declining. It is all that sum which circulates of necesanalogous to the patient under a con- sity in the office of one pound notes, must sumption, he believes, till the moment be, could only be supplied by specie: and of his death, he is getting better and no doubt this sum is immense, probably it better. While every mail brings us ac- may be one quarter of the whole circulacounts of new obstructions to our com- tion. The Banks would be compelled to merce, the government certainly ought curtail their discounts, to answer for the one to second the drawing in of so much of pound notes flowing in upon them. The it (since there are new hazards to its ex- merchants would certainly be distressed

is true it could only be done by diminishing in a like degree, the active capital of the country; but what would be lost to commerce would be of small consideration, when compared to the greater additional security and strength the country would derive from it. If this remedy be not pursued, it needs no great perspicuity to see that the present currency must suffer a continued depreciation, and what is lost by depreciation must be supplied by additional emissions until* * * * * * * *** I have extended these observations much beyond my intention when I commenced. A great deal yet remains to be said; but I shall suspend them, at least for the present.AN OECONOMIST. Nov. 30th, 1809.

PAPER-MONEY.

for money; but this is the gentlest remedy the disease admits of; and perhaps it would be necessary for the government to stand and aid the Bank with new coined guineas to relieve the pressure; and in doing this they would have no cause to fear the guineas would be sent abroad, for they would instantly be absorbed into the circulation to take the place of the one pound notes; from which it will be difficult, nay impossible to draw them. After the community had recovered a little from this distress, which might perhaps be 3 or 4 months; then let the act proscribe two pound notes in like manner; again, after a suitable season, three pound notes; then four, and so on to at least twenty-five pound notes, and all between these and fifty, &c. &c. So that there must be restored to the circulation all the specie necessary to make exchanges with under twenty-five pound notes. It would probably take twelve months, with successful foreign commerce, to relieve this absorption of so much of the real, for the factitious, wealth of this country. After this quantity of specie got into circulation, no doubt the Bank of England would find no difficulty in answering with specie all the demands that would be made upon them; and consequently all other Banks could do so too. When, therefore, they should be obliged to resume their answering all demands in this way, there would then be no difference between the value of paper and bullion, because bullion could instantly be realized for it. The exchange between London and Hamburgh would without doubt be in favour of England. This then, in time of peace, would be a happy state of the currency of the country. It might with great safety rest here. But a country so wealthy as this, and so frequently at war, ought to have no paper circulation. The immense demand for specie to support foreign expeditions, will occasionally cause paper credit to vibrate, and sometimes weaken it; but if there were no paper in circulation, of course all the revenues of the country would be received in specie, and the government in consequence would find no embarrassment in collecting what would be wanted to support these expeditions, and the banks would feel nothing of them. is not this a most desirable state of things? Is it not, in these evil times, the first obli-ed, there will be an influx of the precious gation of the Government thus to consolidate the national wealth? The energies of the country could not then be shaken, It

SIR; Your correspondent W. F. S. appears to me to object, on just grounds, to Mr. Bernard's inference, that "Bank Notes are depreciated, because Guineas will pass for a greater value on the continent than they do here." After, however, premising that I also am but a Tyro, and shall be open to conviction, he will excuse me if I cannot at present coincide with him in all his ideas respecting a circulating medium.-It will be admitted, that this medium, in all countries, consists of materials intrinsically of little value, and unlikely to be largely diverted by the holders from a use wherein their relative value is so great. An increase or diminution of the currency must therefore always affect the nominal value of every article of com merce. Its increase will be attended, or soon followed, by an advanced price of commodities; its diminution by a reduced price. But where this is confined to a particular state, both cause and effect will be of short duration: for such part of the circulating medium of a country, as is in equal use with neighbouring states, will, in the former instance, soon find its way into those states, where it will now purchase a greater quantity of the produce of the soil and of industry, than in that whence it comes, till each state has a share of the aggregate amount of the cur rency of all, proportioned to its share of the whole produce; on the other hand, where the circulating medium is diminish

metals, as they are called, or of whatever may be the general commercial medium from abroad, till the same equal distribu

tion has been effected. A part of the cir- | culating medium of a commercial state ought to be of a nature common with that of the countries with which it trades, not only on account of the facilities thereby afforded to its foreign traffic generally, but because many valuable branches of such traffic cannot be carried on without it at all. Were such a state so imprudent as, at any time, to increase that part of its currency, bearing credit exclusively at home, till it became alone equal to its just proportion of the general currency of the great commercial republic; the consequences would doubtless be the total disappearance of the specie of that state, and a dangerous blow to the prosperity of its foreign trade; for it is evident, from what has before been said, that the merchandize hitherto procured only in exchange for the precious metals, will no longer be within its reach at all by a direct trade, whilst its general foreign commerce will lie under great disadvantages. But were its Paper Currency further increased, the evil consequences would be incalculable. All its manufactures and its natural produce necessarily rising in nominal value with the increased currency, and then people, with equal ingenuity and industry and equal advantages of climate and soil, will be enabled to undersell it in every article not the exclusive produce of its own territory; and will continue to do so, till the superfluity of its Paper Currency is withdrawn from circulation. Individuals, indeed, might benefit by the misfortunes of the community in this case as well as in others. The banker, I suppose, first; next the farmer at rack-rent, who would now pay his rent with a smaller proportion of his produce, and his smith's, wheelwright's, and draper's bills with the same proportion as before: in a less degree lessees generally. But the lessor, the annuitant, the merchant, and, above all, the manufacturer, would suffer severely or be totally ruined; and with them the revenues of the state. On the other hand, were there a great and undue diminution of the currency, the chief sufferers in the former case, would in this, generally, become opulent, but with very great distress to the rest of the people. The evil from this cause would, however, commonly soon work its own cure; but it might not always do so. For instance, in the case of large loans or subsidies to foreign powers, and of extensive expeditions, were the whole or even a large part of the specie

required raised out of the circulating cur
rency, not only would so great and sudden
a reduction of the currency cause embar
rassment and distress to the people, but
soon, (through their inability to pay the
taxes), in all probability to the government
also. And this evil might be lasting for
War, that caused it, is likely to impede its
cure. With us this evil is obviated by a
chartered Bank, wherein is deposited the
superfluous currency, and whence on emer
gency it is drawn for the service of the
state; the revenues being pledged to the
Bank proprietors for the due payment of
the interest, and the privilege of keeping
in circulation, as a legal substitute for the
coin of the state, an untaxed paper cur-
rency to a certain amount, being also
granted them in return for the occasional
accommodation, and the better to enable
them to continue it. The presint condition
of our commerce give no cause for appres
hension that the paper currency of this
country has yet reached a very dangerous
extent; and it is to be hoped that our
legislature has si virtue and wisdom
enough left to prevent its doing so : but
I cannot help observing that I know of no
law for limiting the issue of Country-Bank
Notes, and that this subject seems to merit
peculiar attention.-So much for a circu-
ating medium in general; now for the
proportional value of gold to silver-of
a guinea to a shilling-a question of com.
paratively small importance. Were coin
allowed to be freely exported, the conse
quence would be that at home, where the
laws (and wisely) have fixed their rela
tive value, we should have a greater pros
portion of gold than of silver i circula-
tion, when the relative value of gold to
silver is higher here thaa abroad; and a
greater proportion of silver when the rela-
tive value of silver is higher. In other
words; when our neighbours on the Con-
tinent would give us two or three and twen-
ty shillings for a guinea, we should export -
gold and inport silver; would they return
us our guineas at the price of nineteen or
twenty shillings each, we should export
silver and import gold; till in either in-
stance the currency of the country con
sisted of a much greater proportion of one
metal and a less of the other, or possibly
of one of them exclusively. Part of the
exported coin will in each case be applied
to the purchase of merchandize of intrinsic
value; such application naturally arising
from the superfluity caused by the advan-
tageous exchange. This should seem to

detection of the false coin and the with-
drawing it from circulation: a measure
attended, perhaps, with the ruin of many
innocent individuals, but with unqualified
advantage to the state, which is under no
obligation to remunerate them for their
loss. The same observations will apply
yet more forcibly to the forgery of state
paper, but in this case, as the temptation
is greater on account of the worthlessness
of the materials, it becomes a duty of
every government to render the imitation
proportionably more difficult.
-I am,
Sir, your obedient servant,
Near Peterborough, 19th, Nov. 1809.

from p. 861.)

2.

Of the extent to which this self-imposed restriction appears to have gone, I had not any suspicion. I knew indeed that your Lordship had stipulated to keep the time of the disclosure to Lord Castlereagh in your own hands; but subsequently to my being made acquainted with that stipulation, I had received the assurances, which I have already described, on behalf of "Lord Castlereagh's friends;" and had relied upon those assurances.

be a real benefit to a country, and with certain regulations to the traffic it undoubtedly would be so: but the exportation of gold and silver uncoined should alone be permitted, and our own coin the only coin admitted as a legal tender at home, for the currency of the country would otherwise very soon consist of an almost endless variety of foreign coins, mixt with and perhaps almost superseding our own; whereby our domestic trade would suffer considerable embarrassment. Our legislature has accordingly attached severe penalties to the exportation of coin, and has moreover endeavoured to prevent the temptation, by making its standard, as to weight and purity, something inferior to MR. CANNING'S STATEMENT.-(Conclude d the quantity and quality that each coin. will, on the average of the market for several years, purchase in the same metal. A crown will generally purchase more than its weight in silver-a guinea more than its weight in gold of equal fineness with itself respectively. But this latter measure cannot be carried to an extent that will guard against every variety of the market without holding out too great temptation for a fraudulent imitation of the coin; the laws against its exportation are consequently not thereby rendered unnecessary; so far from it that both precautions jointly at times prove insutticient. Possibly it may be asked how then is a coinage attended with loss to governments? I answer: not in the exchange of gold and silver coin, for their uncoined materials: but in that of new coin for old of the same denominations, and in equal numbers; which is occasionally rendered necessary by the reduction in weight of the old coin, through use, and the consequent temptation for fraudulent imitations. It may not be amiss to make a few observations respecting forgery, whether of the coin or paper of a state, though this is not strictly the proper place." First, of coin. The circulation of false coin would in the first place, impede traffic by the attention necessary from individuals" to the examination of the specie offered to them in the course of business: but, were the circulation of base coin to become very extensive, it would, in addition to this evil, be attended with all the fatal consequences above enumerated in speaking of a superfluity in the paper currency, without the temporary accommodation which the state might have experienced by an increased issue of its own paper. A remedy for this can only be found in the

It was not till the 6th of September that I learnt that those assurances had not been carried into effect. It was not till the 19th of September that I learnt that your Lordship had been no party to them. Then indeed I learnt that your Lordship had not only "not engaged" to make the communication previously to the " issue of the Expedition being known here"— but that in July you had "stated to one of our Colleagues," (not the Duke of Portland)" who was urging an earlier communication," that the "time of communication, so far as you were concerned, was for you to decide; but that no one had a right to say you did not perform that "part in the transaction in which you "were concerned, if you did not open your lips to Lord Castlereagh before the issue of "the Expedition was known here."

This information I received from your Lordship, in a letter dated the 19th of September. It was then perfectly new to

me.

I leave your Lordship to judge what must have been my surprise, when, after receiving from your Lordship, on the evening of the 19th of September, this frank avowal of the real origin of the concealment maintained, during this latter and most import

ant period, towards Lord Castlereagh, Iperty or revenues of the respective inhareceived on the following morning Lord Castlereagh's Letter of the same date, making me responsible for that conceal

XV. The subjects of either of the High Contracting Parties, to whom inheritances may fall in the States of one or the other, may, without obstacle, take possession of the same, and enjoy it under the protec To this Address to your Lordship Ition of the laws. The exercise of this have been compelled to resort, however reluctantly, to vindicate my private honour. As to any charges against my public conduct-this is not the mode to reply to them. If any such shall be brought against me, at the proper time and in the proper place I shall be prepared to meet and to repel them.