THE SCOTCH BANKER SECOND EDITION. CHARLES WOOD AND SON, PRINTERS, P-ippiii's Com t, Fleet Street. a THE SCOTCH BANKER;- CONTAINING ARTICLES UNDER THAT SIGNATURE BANKING, CURRENCY, &c. BY THOMAS ATTWOOD. ' My father made your yoke heavy, and I will add to your yoke. My father also chastised you with whips, but I will chastise you with scorpions. My little finger shall be heavier upon you than my father's loins." 1 KINGS xii, 14. " At the end of every seven yt ars, thou shall make a release. And this is the manner of the release. Every creditor that lendeth aught unto his neighbour, shall release it; he shall not exact it of his neighbour or of his brother. " Beware that there be not a thought in thy wicked heart, saying, the seventh year, the year of release is at hand, and thine eye be evil against thy poor brother, and thou lendest him nought." DEUT. xv, 1, 2, 9. SECOND EDITION. LONDON: JAMES RIDGWAY, PICCADILLY. MDCCCXXXII. -', OF THE UNIVERSITY } PREFACE. THESE papers were not written by a Scotch Banker, but by an English Banker. The former signature was adopted accidentally without the knowledge of the writer. The six first articles were published in the Globe paper, of September 27 and October 22, 1827, and of April 5, April 9, May 22, and August 13, 1828. The three last arti- cles have not been published before. The article entitled, " Anticipation of the late Panic/' was sent to Lord Liverpool on the 22d November, 1825. At that period no banker had stopped payment. The mis- chief had been entirely confined to the merchants of London, Liverpool, and Man- chester. The first bank that stopped pay- ment was that of Sir William Elford and Co., VI PREFACE. of Devonshire, on the 28th of November. What is called the Panic, may be said to have commenced by the stopping payment of Sir Peter Pole and Co. in London, on the 12th of December, and to have ended, by the purchase of Exchequer Bills by the Bank of England, on the 20th and 21st of De- cember. The Bank of England first re- issued its one pound notes on Friday the 16'th of December. This issue of one pound notes, however important, and indeed vital it was to the country, was not of itself sufficient to arrest the Panic. It enabled the Bank of England to go on for a few days longer ; and it enabled the Country Bankers to give one bit of paper for another, neither of which ob- jects could have been accomplished without it. It was the issue of the thousand pound notes however, in the purchase of Exchequer Bills and other securities on the 20th and 21st of December, which relieved the Panic! The Bank of England increased its issues of pa- per money about nine millions in the course of a few days, besides issuing also many mil- PREFACE. Vll lions of additional sovereigns. These opera- tions removed the panic, in the very same way as counter-operations of a similar nature had produced it. During the year 1825 eight millions of sovereigns had been ex- ported, and the Bank of England, as is well known, had reduced its paper circulation about five millions. Thus panic was pro- duced by the abstraction of the circulating medium, and removed by its restoration. The ministers say, that there are now twenty-two millions of sovereigns in circula- tion, and twenty-six millions of Bank of England notes, in all forty-eight millions. But if they wish to preserve the standard at all hazards, they ought to have reduced the Bank of England notes in proportion as they increased the sovereigns ; for otherwise the issue of the sovereigns, in addition to the Bank notes, does but promote a general depreciation of both. When the Panic commenced there were only seventeen millions of Bank of Eng- land notes in circulation, and scarcely any sovereigns. The Government have now been Vlll PREFACE. issuing, as they say, twenty-two millions of sovereigns, and the Bank has also been issu- ing twenty-six millions of Bank notes. It is no wonder then that Panic is kept aloof. If it were not that the public mind is worn out with repealed disappointments, and that the men who possess the money are unwilling and incompetent to use it, the prices of com- modities would at this moment be higher than they were during the war, for at no period of the war had we so great a circula- tion as forty-eight millions of the legal or practical money of the country. We are now therefore, in the very same monetary circumstances in which Lord Goderich (in his speech of February 11, 1826) repre- sented us to be in the year 1825. We ought also to have now the " prosperity" of 1825. We had in that year forty-six millions of gold coins and Bank of England notes in circulation, as Lord Goderich informs us; and we have now forty-eight millions of gold coins and Bank of England notes in circula- tion, as Mr. Goulburn informs us. Accord- PREFACE. IX ing to Mr. Goulburn, those instruments of money have been increased from their amount of perhaps twenty or twenty-five millions in December, 1825, to about forty- eight millions in July, 1828 ; and according to Lord Goderich, they had been increased from about twenty-five millions to forty-six millions during the years from 1821 to 1825. The circumstances, so far, are very much alike. It remains yet to be seen, whether the same results will follow upon the same state of things. Of this twenty-six millions of Bank of England notes, now in circulation, how much does the reader think is issued upon dis- count in the regular way of banking bu- siness ? Just one million ! All the rest is issued in the way of " tampering with the cur- rency" in purchases of the national debt, effected for the threefold object, first, of shoving off panic, secondly, of enabling the Go- vernment to pay its dividends, and thirdly, of covering the retreat of the country one pound notes. None of these objects could be ef- X PREFACE. fected without the aid of this enormous cir- culation. By thus adding twenty-six mil- lions of Bank notes to twenty-two millions of sovereigns, the Government is enabled to keep up the appearance of metallic payments for a short time longer. After a little while, however, it is certain that a great proportion of the Bank notes must be withdrawn, or otherwise the gold will be driven abroad, and our "prosperity" will again terminate in all the horrors of "panic, barter" and " universal convulsion !" But if we withdraw the Bank notes, how are we to keep up our " pros- perity" and how are we to accomplish the three above-mentioned objects ? Here is a pretty state of things ! Our "prosperity" is at the best but very near akin to adversity ; and yet, equivocal as it is, we cannot preserve it ! Certainly the " prosperity" of 1828 is not equal to that of 1825 ; and yet the circula- tion of the first-mentioned period is greater than that of the latter. How is this to be accounted for ? In 1825 men's minds pos- sessed some degree of confidence and elasti- PREFACE. XI city. In 1828 they possess none. Men can- not now be made to believe that it is possible for them to move, without injury of some kind or other. In 1825 the increased money of the country had had four years to effec- tuate its action upon the national prosperity. In 1828 it has had but two. In 1825 also, the small note circulation of the country bankers, or what may be called the bread and cheese money of the country, was anchored upon the rock of parliamentary faith. In 1828 that anchor has given way* ! These three cir- cumstances combined, sufficiently explain, why the " prosperity" of Mr. Goulburn is not equal to that of Lord Goderich. But although the "prosperity" is less, Mr. Goulburn may certainly congratulate him- self that the adversity will be greater. Lord Goderich but just tasted of the bitter cup, which his own measures had prepared. Mr. Goulburn must drain it to the very dregs. * " Kissing" it is said, " goes by favour" and the same would seem to be the case with " public faith" Parlia- ment is a very dragon of virtue upon some occasions, but accommodating enough upon others ! Xll PREFACE. And what has the Duke of Wellington to expect? " Worthless Rags u Little Shillings' or " Equitable Adjustment !" Among these, it is perhaps given him to take his choice. It is perhaps too late for him to adopt either. The day and the night are not more sure, than that he must adopt one of these, or otherwise be driven in disgrace from his situation. The first of these alternatives is perhaps yet practicable. The second may perhaps be obtained through the medium of the first. The third is universal anarchy. An iron choice this ! But it is a choice from which the Duke of Wellington cannot escape. Let not the Duke flatter himself that half measures will succeed. He may reduce the dividends of the national debt one half! It will not save him. The distress which such reduction would occasion in London would destroy his Government ; and after all, the private debts would crush the present frame of society to atoms. The last article, entitled " Anticipation of PREFACE. Xlll the New Bank Restriction Act," may perhaps derive some credence from the fulfilment of its brother article in 1825. No man who understands any thing of this important sub- ject, would undertake to steer the Govern- ment through its difficulties without the as- sistance of a Bank Restriction Act. It is not certain that this great measure would now be efficient. The improvident consump- tion of agricultural stocks, and the injured state of agriculture, may perhaps render all measures vain. In this case, the Govern- ment will have to give an account of its stew- ardship. In the mean while, a Bank Restric- tion Act, judiciously regulated, would pro- bably save both the Government and the people from a long train of calamities. August 9, 1828. CONTENTS Page No. I. Lord Goderich and the Country Bankers (September 10, 1827) . . 1 No. II. The Prices of Wheat, and the Metallic Currency (October 13, 1827) 20 No. HI. Things as they are (March 14, 1828; 37 No. IV. A Few Facts (April 2, 1828) 50 No. V. Things as they might have been (April 1 , 1828) 63 No. VI. Famine (June 11, 1828) 92 No. VII. Scotch and English Bankers (July 20, 1828) 112 No. VIII. Anticipation of the LATE PANIC (November 22, 1825) 162 No. IX. Anticipation of the NEW Bank Restriction Act (February 2, 1828) 166 The six first Articles are republished from the GLOBE NEWSPAPER ; the three last have not been published before. 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Such, if there be, who loves so long, so well Let him our sad, our tender story tell. POPS, THE SCOTCH BANKER. o,- No. I. LORD GODERICH AND THE COUNTRY BANKERS. September 10, 1827. IN the establishment of the paper system, the coun- try bankers could have had no material advantage, because the stamps charged upon their notes, with the other expenses attending them, amounted an- nually to nearly as much as the annual use of the money so obtained was worth. The country bankers were prohibited by law from charging more than five per cent, interest to the public. The expense of their notes could not be much less than three per cent., and thus a gross profit of only two per cent, per annum on their circulation was left for the country bankers, out of which they had to bear the risk of bad debts, and then the remainder would serve as a remuneration for their time and attention, B 2 ON COUNTRY BANKING. In fact, the expense of the capital raised by the country banker, by the issue of cash notes, may be said to be about the same as that of the capital which he obtains upon interest deposits, viz., from two to three per cent, per annum. Now, supposing the country banker to be able to make five per cent, of his capital, this leaves him no great matter of profit. Upon a circulation of ten millions of small notes, it might amount to from 200,000/. to 300,000/. annually. The profit which the public derive from the use of bills of exchange, which are virtually the very same instruments as pro- missory notes, is probably a hundred times as great. The bills of exchange may amount to about four hundred millions sterling in common circulation; and if we reckon the profits of trade generally at about fifteen per cent., we shall find that the capital thus raised pays the public a profit of sixty millions per annum. It does not appear that Lord Goderich has said any thing yet about abolishing bills of ex- change, but there is reason to expect that he con- templates such a measure, on the alleged ground that the manufacture of paper money is " an inter- ference with the King's prerogative." Mr. Cobbett has the merit of originating this notable discovery ; and Lord Goderich and his colleagues, like apt scholars, have in this and many other instances rea- dily adopted the lessons of their great teacher. But although it is clear that the country bankers could have no great profit in the issue of cash notes, yet it does not follow that they had therefore ON COUNTRY BANKING. 6 no interest in the preservation of a system under which their own debts and credits, and all the general d.ebts and credits of the nation, were con- tracted. The business of the country bankers is to act as a medium between the debtor and the cre- ditor interest of the country. They collect the dormant and unemployed capital of the latter, and give it action and vitality by lending it out to the former, in a variety of ways. The country bankers, therefore, are not benefited by the depreciation of the currency; because the debtor to whom they lend money, pays them back the very same de- preciated money as they themselves pay to the cre- ditor from whom they borrowed the undepreciated money. It is the public, and not the banker, that gets the advantage of using a depreciated currency ; or, rather, the debtor interest, or active interest of the country, is benefited at the expense of the cre- ditor interest. A man borrows money because he wants to employ it, and another lends money be- cause he has not the means of employing it. The banker is the medium of communication between them. Without his assistance a great proportion of the capital of the country would be stagnant, and a great proportion of the labour of the country would be unemployed. By means of his interference the stagnant capital of the country is made active, at the particular times and in the particular places where its activity is from time to time required. When the currency is depreciated, the debtor in- terest of the country is benefited ; trade is made B 2 ON COUNTRY BANKING. prosperous, and debtors can readily discharge their debts. All the good that the bankers therefore de- rive, is the avoiding of bad debts, and the increase of their business by the general prosperity around them. The debtors pay their debts easily, and the creditors receive payment of their credits in a cheaper money than they advanced ; but the busi- ness of a banker being to act both as a debtor and a creditor generally, he cannot participate in the benefit of the one, nor in the injury of the other. Very different is the situation of the banker dur- ing the process of recovering the value of the cur- rency to its ancient level. Then the debtors, being compelled to pay in a dear and scarce medium the debts which they contracted in a cheap and abun- dant medium, become generally insolvent. The prices of their property fall, but the price or mag- nitude of their debts does not fall. When their debts were contracted in the cheap money, some proportion of the property which they held was their own ; and the carrying on of their respective trades was profitable and secure. But when the dear and scarce money comes to be established, the fall of prices consequent upon it deprives them of the whole of their property, instead of a part. It takes away the profit upon their respective trades, and it covers them with bad debts and losses on all sides. In this way the destruction of the debtor interest of the country is brought to act in produc- ing something like a similar destruction among the creditor interest. This latter frequently finds itself, ON COUNTRY BANKING, O indeed, more injured in the recovery of the value of the currency, by the destruction of its debtors, than it was previously injured in the depreciation of the currency, which enabled its debtors to pay their debts in a cheaper money than that which had been advanced. Here it is that the responsibility of the banker is brought forward, arid that his real interest is seen in the preservation of the paper system. It is not that he makes profit by that system, but that his debtors are made solvent by it, and their trades are made prosperous ; and he is himself enabled to pay his own creditors in the same cheap and abundant money which he received from them. In his neu- tral capacity, acting both as a debtor and as a cre- ditor, and standing between the latter and the former as a guarantee for the solvency of the debtor, and for the due payment of the creditor, the banker has indeed, in this light, a very strong interest in the preservation of the paper system, in comparison with which, his interest in the mere profits of his notes is perfectly trifling. If the paper system is preserved, or if any existing state of depreciation in the currency is preserved, the banker gets no benefit: his debtors pay him in the same money as he pays his creditors ; and all the good that he derives is a mere protection from injury and injustice. But when the paper currency is abolished, or when the value of the currency is attempted to be raised or recovered, then, in whatever degree the value of the currency is raised, the burthen of debts is increased, ON COUNTRY BANKING. without any consideration whether debtors are able to bear such increase of burthen, or not, or whether it requires merely a part of their property, or the whole of it, or even a part of their creditors' pro- perty in addition. If the prices of property are re- duced one-half, the value of money is thereby doubled, and the burthen of all debts is doubled. In this case a general insolvency takes effect among debtors, and a general ruin and alarm are necessa- rily spread among all creditors. The banker being the medium of communication between both, and being, in fact, the guarantee of the one for the other, has to bear the brunt of the mischief which is thus set in operation. When money depreciates or falls in value, the creditor is sure to preserve at least a part of his property; but when money rises in value, the debtor is sure to lose all. Now, one would naturally suppose that persons placed in the very serious and responsible situation of bankers, during the period of attempting to re- store the value of the currency, were entitled to all manner of consideration and protection from the government of the country. But Lord Goderich seems to be of a different opinion; he seems to think that it is some fault or crime of the bankers which has placed them in the responsible situation of guarantee between the debtor and the creditor interest of the country. He seems also to think that they are a useless, or perhaps injurious, de- scription of men in the body politic, and that their ON COUNTRY BANKING. 7 destruction, or, as he himself elegantly terms it, their " extinguishment," could not fail to produce benefit to the country. Under these impressions he seems to have acted, but he has not thought proper to bring forward, as yet, any bill in Parliament for their direct " extinguishment." He has proceeded more slowly and cautiously, by a great deal. He first of all writes a letter to the Bank Directors, in conjunction with Lord Liverpool. In this notable document he calumniates the bankers, and attributes to them the whole of the national dangers and calamities. He then proposes three grand measures for the national safety, viz. First, the abolition of small bank notes ; second, the establishment of branch banks of the Bank of England ; third, the establishment of joint stock banks. He then pro- ceeds to remark, that he doubts, " whether it be desirable to extinguish the country banks," but by the establishment of branch banks and of joint stock banks, he " hopes ultimately to extinguish what- ever is objectionable or dangerous among them !" Nothing can be more clear, therefore, than that the country bankers are deemed a great nuisance by Lord Goderich, and that their " extinguishment" is deemed by him a very great desideratum. He is not, indeed, so excessively ignorant as to believe that the business of bankers can be altogether dis- pensed with ; and therefore he proceeds to establish branch banks for the purpose of supplying their place ; and it would seem that these branches are 8 ON COUNTRY BANKING. instructed to act upon a system well qualified, in the mean while, to assist in the " extinguishment" of their rivals, and, in due season, to bring all the pecuniary transactions of the country within the surveillance and control of the Treasury. In accomplishing these great purposes, calumny is still a main agent to be relied upon, and this is to be propagated in rather a curious way, well worthy of the public knowledge. The bank branches, it seems, are rigidly instructed to refuse to receive any country bank notes, unless the country banker keeps a balance of cash in their hands by way of security. Now, it is not credible that this can be done from any real fear of the insolvency of the country bank- ers. If such amazing ignorance as this could possi- bly exist among any respectable men, it would ne- cessarily have been removed by the effects of the late panic ; about nine-tenths of the banks which stopped on that occasion having already proved their solvency by paying 20s. in the pound. The smallness of the sums required by way of security, amounting in most cases to only 300/. or 500/., and the facility of getting country bank notes paid every week, or every day, by the banks issuing them, furnish also a sufficient proof that this paltry pre- caution on the part of the branch banks does not originate in any real distrust which they entertain respecting the solvency of the country banks. It must originate, therefore, in the desire of humbling and degrading the country bankers, and of follow- ON COUNTRY BANKING. ing up the effect of Lord Goderich's letter to the Bank Directors, by exciting the public suspicion and animosity against them. ^ The Bank of England is well known to have ad- ^-^ r vanced more than twice the amount of its whole capital to the Government. Some persons may be of opinion that a debt of this kind, which it is im- possible for the Government to pay, may, some time or other, render the situation of that great establish- ment quite as precarious as that of any of the humble objects of its suspicious precautions. Calumny, however, is not the only weapon to be made use of against the unfortunate manufacturers of " worthless rags." It is not enough to charge them with being improvident, and speculative, and incapable of managing their own business ; it is not enough to expose them to the regular competition of powerful public bodies, but the evils of that compe- tition are to be increased by the branch banks acting upon a system of business which cannot possibly produce any projit whatever; and thus another means is devised of producing the " extinguishment" of the " existing establishments." Upon all former occasions, it has been held by political economists, that individuals and small partnerships are more capable of managing their own affairs, than public bodies and joint stock companies ; that " what is every body's business is nobody's business ;" and that the beneficial management of business generally requires to be conducted by parties deeply and im- mediately interested, and not by parties who have 10 ON COUNTRY BANKING. only a remote, and perhaps trifling interest in the success of their respective concerns. But now the ancient maxims of political economy are set aside ; " the solid principles of banking" are said to be only understood by public bodies ; and branch banks and joint stock companies are presumed to be more capable of conducting the trade of a banker, than individuals whose very life and death hang upon their prudence, and who have grown old in habits of industry and of wary and cautious circumspec- tion. It is well known that the profits of these men have been no monopoly ; they have been open to all men freely and equally, and the law itself has limited them to within five per cent, interest per annum, and a commission of 5s. per 100/. sterling, returned. The right of making paper money has been possessed by every individual, in common with the bankers ; and almost every individual has made use of it. If they have not drawn promissory notes on demand, they have drawn bills of exchange, or drafts, on demand ; or they have drawn promis- sory notes at a date ; and all these instruments have been just as much an interference with the royal prerogative, and just as beneficial to the issuers, as the promissory notes on demand have been to the bankers. Nor has any one ever complained of the mag- nitude of the charges which bankers have been accustomed to make for the accommodations which they have rendered to the public. On the con- ON COUNTRY BANKING. 11 trary, the accusation has been, that they have en- couraged " speculation and overtrading," by ren- dering their accommodations too readily and too cheaply. Lord Goderich, himself, has again and again repeated this accusation. He has set up the branch banks with the view of remedying the effects of it ; but what is the consequence ? The very first thing the branch banks have done, has been to render banking accommodations nearly twice as cheap as before ! They have first abolished the commission of 5s. per 100Z. ; they have then re- duced the rate of discount from 5 to 4 per cent, per annum ; and they have then undertaken to discount three months bills, although the country bankers, generally, have not been in the habit of discounting bills that have more than one or two months to run. By measures of this kind, it would seem that Lord Goderich and the Bank Directors expect to succeed in " extinguishing" the country banks; and then the Bank of England is to become a grand political engine; a kind of " Briareus" with a hundred hands, by means of which Lord Goderich and the Treasury may pinch, grind, and govern the country as they please. Instead of bringing charges against the bankers for not being able to protect the country against the consequences of his own errors, Lord Goderich would have done well to have rectified those errors ; he would have done well to have considered that it was his duty to have provided the country with the new circulating medium, before he passed laws to 12 ON COUNTRY BANKING. abolish the old. Or, if he did not think this his duty, which it undoubtedly was, he should at least have taken care, that in compelling the debtor in- terest of the country to pay their debts in gold, he left in their hands the means of providing the gold themselves. He should at least have reduced the gold standard to the same level of depreciation as had permanently existed among those " worthless rags" in which his own rents and salary had been doubled, and all private and public obligations had been contracted. But he leaves all these things to chance ! He passes laws to command thousands of millions of debts, contracted in " worthless rags," to be paid in heavy gold ; and then gravely wonders at the ruin and destruction around him ! It never en- ters into his head to blame his own arbitrary, ca- pricious, unjust, and impracticable laws; but he blames the unhappy wretches who are made his victims ! It is probable that the bankers owe the public 200,000,0007. sterling. Lord Goderich gravely orders this enormous sum to be paid suddenly in heavy gold, well knowing that there is not a twentieth part of that sum in the country at the time ; and then he accuses the bankers of indiscretion, and speculation, and " overtrading," and of not knowing their own business, and "not understanding the true principles of banking," merely because they cannot accomplish impossibilities ! It would be well for the country if Lord Goderich understood his business as well as the bankers understand theirs. ON COUNTRY BANKING. 13 He would then have taken care to provide the 200,000,000/. of gold money, before he compelled the bankers to pay it ; or at any rate, he would have guaranteed to them the payment of their own credits in gold, before he compelled them to discharge their own debts in gold. The term "worthless rags" was invented by Lord Goderich himself, and it is but a few months ago that he had the temerity to apply it, in open Parliament, to the paper money ; although he knows very well, that paper money has been the only legitimate money of the realm for near thirty years ! He knows very well that the nation has bor- rowed a thousand millions sterling in these " worthless rags," and yet he advocates the repayment of this "worthless" debt in heavy gold ! He knows very well that the rents of land generally have been doubled, or, as Lord Liverpool says, "trebled" in these " worthless rags ; " and yet he " wrings from the hard hands of peasants their vile trash, by basest indirection, 5 ' and compels the wretched far- mers to pay these " worthless" rents in heavy gold ! He knows that his own salary has been expressly raised from 3,000/. to 6,000/. a year, on the ground of the " depreciated state of the currency," and yet he pursues the " stern path of duty," and modestly requires this " worthless" salary to be paid in full in heavy gold ! ! Lord Goderich must take his choice : he must either plead guilty to indiscretion the most palpable, in calling the legitimate money of the realm " worthless rags," or 14 ON COUNTRY BANKING. to another charge far more censurable, in turning " worthless rags" into gold. This unheard-of transmutation was brought about in Parliament by the most solemn declarations that it would increase the burthens of industry only four per cent. ! All authorities now acknowledge that it must increase them full cent, per cent,, that is to say, that it must reduce the general prices of property and labour full 50 per cent, below the war level ; and yet Lord Goderich and his colleagues are content coolly to pocket this enormous profit, without making any deduction from the " fictitious" means by which they accomplish it. Lord Goderich is just old enough to recollect that the soldier's pay was doubled in " worthless rags." He is, perhaps, weak enough to think, that, like his own salary, it will be continued to be paid in full, and in heavy gold. But Lord Goderich has other merits which are worth attending to. He brought forward the odious and unjust Corn Laws. He supported the more odious and more unjust Money Laws. By the former he attempted to bolster up the price of bread at 10s. By the latter he attempted to beat down the price of labour to 5*. He gave us a "little loaf," but he compelled us to pay a " heavy penny" for it ; " making the loaf small, and the coin great, falsifying the balances by deceit" he brought forward his Corn Laws to protect the rich, but he left the pressure of the metallic standard to fall with un- broken force upon the poor! The poor, the indus- ON COUNTRY BANKING. 15 trious, the useful, and the valuable classes of the community, were to be brought down to the ancient level, without remorse, notwithstanding any misery with which this fatal process might be attended. But the rich, the idle, the useless, and the injurious classes of society, were to be supported and aggran- dized amid the general ruin, " like mildew'd ears, blighting their wholesome brothers." When Lord Goderich boasted of the " pros- perity," and took credit to the Government for having produced it, he seems to have been totally ignorant of the way in which it was effected. So long as the " prosperity " lasted, however, he claimed all the credit for the Government ; and as soon as it disappeared, he laid all the blame upon the bankers. He had plenty of facts in his head to show him where the merit and the blame lay ; but he did not know how, or he did not choose, to apply them. In his speech, reported in the Courier of February 11,1 826, he represented the circulation of Bank of England notes and gold coins, in the year 1820, as about 25,000,000/. ; that of 1821, as about 32,000,000/. ; that of 1822, as about 34,000,000/. ; that of 1823, as about 36,000,000/. ; that of 1824, as about 42,000,000/. ; and that of 1825, as about 46,000,000/. Now, one would think, here was cause enough to account for the "prosperity" of 1824 and 1825, without attributing it to the* "fictitious" operations of the country bankers. Surely, when Lord Goderich had thus increased the practical money of the country, from 16 ON COUNTRY BANKFNG. about twenty-jive millions in 1820, to about forty -six millions in 1825, he could not justly blame the country bankers for following up his operations, and contributing their humble efforts in support of his boasted " prosperity." Nor could he blame them justly when his pros- perity disappeared, in the winter of 1825. His own arbitrary and unsuitable laws had compelled the gold coins to disappear ; they had also compelled the Bank of England notes to disappear, or at least to be greatly reduced, at the very time when they ought to have been increased, to supply the place of the coins ! What had the bankers to do in processes of this kind, which set a double ruin in operation, and as necessarily produced " panic" in the political body, as the opening of an artery on each side would produce death in the animal body? The poor bankers were the victims, and not the cause, of the general ruin around them. If Lord Goderich had drawn in his bank notes as fast as he issued out his coins, he would have had no "prosperity" in 1824, and no "panic" in 1825; but he would have had universal anarchy ml 823! Lord Goderich seems now to regret that he did not face the ruin in 1822, when wheat was sold at 4s. 6d. per bushel, and butcher's meat at 3d. per pound ! He will have an opportunity of showing his courage one of these days, and we shall then see whether he will dare to meet a state of things which the unhappy Castlereagh had not nerve to face. ON COUNTRY BANKING. 17 There is certainly no evil in having things cheap, abstractly speaking. It is only when high rents, high taxes, and high debts have been contracted with reference to high prices, that any mischief is found in low prices. Whenever this is the case, the elements of society are crushed in detail by any general and extensive depression of prices. Nothing can enable society to support such depression, but a correspondent depression of monied burthens, effected by legislative interference. It is exceed- ingly doubtful, however, how far such interference is practicable without in itself producing the very explosions which it seeks to prevent. It is in the nature of some minds to regard the present evil as the worst ; and in the terror which present dangers inspire, to overlook alike the future and the past. Hence vacillation, inconsistency, and continual change. If Lord Goderich perseveres in his present measures, he will shortly find the price of wheat reduced again to 46'. 6d. per bushel, and in all probability much lower. He will then return to the paper system again. In every thing respecting bankers and paper money, indeed, the views of Lord Goderich seem to have been singularly oblique. During the late panic, he saw the nation saved from approaching anarchy by the increased issues of paper money ; and yet, within two months, he brought forward measures for the express purpose of reducing those issues again ! If he had not done this, the " pros- perity" of which he boasted would not have disap- 18 ON COUNTRY BANKING. peared. The "late panic" would have passed away like a summer cloud, and would have left but little consequences behind. All agriculture and all trade would have continued to prosper, so long as he kept the currency on the ample and abundant footing of 1825. So also with respect to one pound notes : when the country was " within forty-eight hours of a state of barter," Lord Goderich found that the Bank of England was luckily provided with a stock of one pound notes. The issue of these humble instru- ments (combined with the issue of larger notes in the purchase of Exchequer bills) suddenly and mysteriously arrested the national ruin. Lord Gode- rich saw this, and knew it; and yet, within six weeks, he brought the Royal authority in opposition to the law of the land, arid issued orders to the Stamp office to allow no more one pound notes to be made ! When this arbitrary proceeding was ques- tioned in Parliament, Lord Goderich or Lord Liver- pool justified themselves by alleging, that " they had certain information that a scheme existed among the country bankers to make a run upon the Stamp-office, and literally to deluge the country with one pound notesV This was, indeed, a strange and wild idea, but it was the mere " Cynthia of the minute ; " for within another little month Lord Goderich or Lord Liverpool came forward in Parliament and alleged, that " they had certain information that the country bankers, in order to thwart the measures of ministers, had entered into a combination to withdraw their one pound notes altogether" and therefore, ON COUNTRY BANKING. 19 that it was necessary to allow the Bank of England time to provide an extra quantity ! Strange, indeed, it is, that " certain informations " like these should have been listened to for a moment by men to whom the interests of the nation are committed. Every man of business will see at once that it is not pos- sible that either of them should have the slightest foundation. Lord Goderich is a man of probably good inten- tions, but his views and capacities do not seem of the highest order. Difficulties and embarrassments of many kinds are accumulating around him. Is it possible that he should overget them ? Let Castle- reagh Liverpool Canning answer. A SCOTCH BANKER. c 2 No. II. ON THE PRICES OF WHEAT, AND THE METALLIC CURRENCY. October 13, 1827- THE average price of wheat in England for two hundred years preceding the late war, appears by the returns from Eton College to have been about 5s. 2d. per Winchester bushel, or just one ounce of standard silver to one bushel of wheat. During this period of two hundred years, it is well known, that the prices of wheat on the Continent were not generally lower than they were in England ; on the contrary, during a great part of this long period England exported wheat to foreign countries, which she could not have done, if the prices of wheat in those countries had been lower than her own. About the year 1776, when the English country bankers first issued cash notes of 51. and upwards, a visible rise was effected in the price of wheat; and accordingly the average, for seven years preceding the late war, was about 6s. 6d. per bushel. In the year 1793 the Bank of England first issued 5/. notes, and adopted other important measures, which occasioned a further and very great advance in the price of wheat. In the spring of 1797 the Bank Restriction Act took ON THE METALLIC CURRENCY. 21 place ; and thus the prices of wheat, and of all other things, were released altogether from the metallic standard; and for a period of more than twenty years, they were governed entirely by the relative plenty or scarcity of bank paper, and of other paper money in the markets of the country. In the spring of 1797 also, the Bank of England first issued I/, notes ; their example was quickly followed by the country bankers, and thus the small remainder of the gold coins were driven out of circulation, and all prices became altogether artificial. The silver coins did, indeed, continue in a state of partial cir- culation ; but they were only enabled to maintain their ground by the extreme wear and tear and de- basement, which they had undergone ; and they did not contain, upon an average, more than one-half of the standard silver which the present silver coins contain. The release of the currency from the metallic standard having been thus effected, and the general issue of 5/. notes and of 1 /. notes having thus been generally substantiated throughout the country, it is not to be wondered that the prices of wheat, and of all other things, rose generally above the ancient level. From this cause alone proceeded the high prices of the late war, and not from any abstract tendency in war itself to occasion high prices. War never did produce high prices, upon any former oc- casion ; nor would it upon this occasion, if the an- cient pressure upon prices had been continued and if every 31. 17 's. }Q%d. of price had still been 22 ON THE PRICES OF WHEAT, made convertible, by law into an ounce weight of stan- dard gold. After a lapse of twenty-two years, in the year 1819 having first reduced the bank-note circu- lation one-fifth the Legislature proceeded again to render the currency of the country convertible by law into a metallic standard. They first, however, reduced this standard four or five per cent. ; and then they gradually strung it up to the ancient level, by rendering all currency, all prices, and all debts, convertible by law into the present coins. It may be remarked, indeed, that the present standard is strung up beyond the ancient level, because the re- lief which the silver standard had previously afforded, is now abolished ; and because the Legislature has repealed the ancient laws which formerly prohibited the exportation and the melting of the coin of the realm. It is now generally understood, that the conse- quence of this recovery of the ancient money of the country, must necessarily be the recovery of the ancient state of prices, which formerly existed in the country. When the general values of the country are measured by the ancient measure of value, they must, of course, be brought down to the ancient level, which that measure imposes. This great truth has, for a while, been studiously concealed from the public eye. It has been pretended by interested men, that the ancient measure of value might be re- stored without reducing the prices of value gene- rally more than four per cent. It has been pre- AND THE METALLIC CURRENCY. 23 tended also, that by the aid of Corn Laws, the ac- tion of the ancient measure of value upon the prices of agricultural produce might be prevented ; and that those prices might still be preserved upon the level of IQs* to the bushel of wheat, although all other prices should be beaten down to the ancient level. By representations of this kind, the country has been deluded on from year to year, until new interests have grown up, and new obstacles have in- tervened, which render retreat far more difficult than it would otherwise have been. The landed interest, indeed, which is the great depository of political power, has been literally hoodwinked. It has been led blindfold to the butchers shambles, and at this very moment the butcher's knife is on the point of being driven into its vitals ! This is the fate of the great agricultural ox. It has been crowned with chaplets of corn bills, and decked out and bedizened with metallic coins. It has then been paraded through the country, and ex- hibited before the public eye as the main cause of the public distresses. And now it is delivered over to the knife of the butcher, blindfolded and bound with a hundred cords, whilst bands of cunning and cruel Jews are crowding around their expected prey. Oh, thou simple agricultural ox ! It is not the Bankers, but the Jews, who have brought thee into this situation. If thou hadst but been so far gifted as to know enemies from friends, thou wouldst never have dismissed the bankers, whose interests are but one with thy own, and have taken to thy bosom the 24 ON THE PRICES OF WHEAT, false, cunning, plundering, and remorseless Jews, who literally double their own wealth out of the very measures which produce thy ruin ! Thou hast had men around thee who have warned thee at every step against the wiles of the Jews ; who have stood by thy side, year after year, whilst the chaplets were weaving, and the metallic coins were preparing; whilst the bandages were fastening upon thy eyes, and the hundreds of cords were twisting round thy limbs. These men have told thee again and again, what the cry of " only four percent" meant, and what " the stern path of duty" meant, and what " public faith" meant. But thou hast refused to hear them. Thou hast listened only to the calum- nies and sophistries of the Jews ; and now the knife of the butcher is sharpening for the coup-de-grace ; and if thou art saved at all, it will only be by the most sudden and desperate exertions. By means of these it is yet possible for thee to snap asunder the cords and bandages of the Jews, and to drive them and their sophistries, and their legions of harpies, far from their unhallowed meal. Dismissing figures, and returning to facts, and to the severe and rigid reasoning which their impor- tance requires, we come then again to Jive shillings and two pence as the natural price of the bushel of wheat in England ; a price which it can never again permanently exceed under the pressure of the pre- sent measure of value. The average price, for up- wards of twenty years during the war, was about twelve shillings ; and upon this latter range of AND THE METALLIC CURRENCY. 25 prices it was that the rents of land, the taxes, the contracts, and nearly all the burthens of the nation, public and private, had been founded. When, therefore, it was proposed, in 1819, to adopt the present standard of value, and to reduce the price of wheat permanently to five shillings and two pence per bushel, one would have thought that the "policy" of such an immense and impracticable undertaking would at least have been inquired into. Un- doubtedly, this was at least to have been expected. But nothing of the kind has been done. The Re- ports of the Committees of both Houses of Par- liament, upon which this great measure was founded, expressly state, that " the Committees have not in- quired into the policy of restoring the ancient mea- sure of value, considering that question to have been previously decided by the wisdom of Parliament!" Parliament, therefore, has legislated in the dark ! It has adopted measures for reducing the price of wheat, permanently, to Jive shillings and two pence per bushel, and all other prices correspond en tly, without ever inquiring whether the country can pay its taxes under such a reduction ; or whether indi- viduals generally can pay their debts, rents, mort- gages, contracts, and family settlements and incum- brances, of a hundred kinds ! Ail this has been left to chance ! In its eagerness to establish a system of such enormous plunder, to be effected by the cre- ditor interest of the country upon the debtor interest of the country, the Legislature has altogether omitted to inquire whether the literal destruction of the lat- 26 ON THE PRICES OF WHEAT, ter might not possibly revert the ruin upon the former ! And when the Legislature has been reminded that this is the inevitable result of its measures, when the most significant hints to this effect have been given by the distressful events of 1816, of 1822, and of 1825, the Legislature has not abandoned its mea- sures, but has contended itself with merely shoving o^the ruin pro tempore, by suitable temporary tricks and contrivances ! And thus we are living on, from expedient to expedient, and from contrivance to contrivance, until at last it seems probable, that we are approaching a state of things from which no human wisdom can extricate us a state of things, in which it is ruin to advance ruin to retreat and ruin to stand still. It is remarkable, however, that not only has not the "policy" of reducing the price of wheat to 55. 2d. per bushel, and other things in proportion, ever been inquired into ; but several other parts of this important subject have been entirely overlooked, al- though calculated to give strong ground of opinion, that the pressure of the present standard of value will reduce the price of wheat permanently far below that level. The lapse of thirty years is at all times an important consideration in human affairs, and cer- tainly it is not less so, when coincident with revo- lutions like that of France, and with the extraordi- nary moral, political, social, and commercial changes, which have latterly exhibited themselves throughout the world. AND THE METALLIC CURRENCY. 27 Now let us consider one or two of the circum- stances which have arisen during the last thirty or forty years, and which are calculated to convey a doubt whether it is possible for us to preserve per- manently in our present standard, so high a level of prices as 5s. 2d. to the bushel of wheat. Let us consider, for instance, the changed state of society in England. In the year 1791, Mr. Pitt calculated the current gold coins circulating in England at thirty millions of guineas. Thirty millions of gui- neas were therefore necessary in order to keep up the prices of wheat at 5s. Id. per bushel. In the year 1791, however, the state of society was very different from what it is now. The public roads and canals furnished but comparatively indifferent modes of transit for goods and persons; and the consequence was, that the division of labour, with all the mighty developments to which it leads, had made comparatively but little progress. The an- cient habits of society still continued in existence, and every small town or district produced nearly the whole of its wants within itself. There was a clothier, a tanner, a fuller, in almost every village ; and there was a spinner at almost every door. One half of the productions of the country were consumed by the very individuals who produced them. Men were not ga- thered into masses, producing separately masses of separate materials, only made available for the public use by the intervention of money. Money, there- fore, was not so important as it is now ; nor could it well be possible that more than one-half the money 28 ON THE PRICES OF WHEAT, could be required that is now required, for the purpose of creating, and of breaking up, the multi- tudinous masses of the national productions, and of distributing them generally into the uses of the population. We must find, then, sixty millions of sovereigns at the present period, instead of thirty millions, before we shall be able to preserve the prices of wheat so high as 5s. 2d. per bushel. Where are we to get these sixty millions of sove- reigns from ? Once or twice, we have contrived to get possession of about twenty or twenty-five mil- lions ; and upon each occasion the drain or suction of this enormous sum from the current circulation of the rest of Europe, has occasioned a great depression of prices among our continental neighbours. In France, for instance, upon the present occasion, the price of wheat generally has been reduced to about 4s. per bushel, which is much lower than the an- cient price in that country. The same is the case with Prussia, where the King has more than once been obliged to advance money to the landowners upon the mortgage of their grain, stored in the royal warehouses. Now, if in addition to twenty or twenty-five millions, we proceed to drain thirty or thirty- five millions of sovereigns more from these exhausted countries, it seems probable that such ad- ditional drain will reduce their prices even below their present level. Instead of 4s. per bushel, the continental price may become 3s. per bushel gene- rally, which indeed is the case already in Denmark, Russia, and Poland. The probability is, therefore, AND THE METALLIC CURRENCY. 29 that the Continent cannot supply us with the addi- tional number of sovereigns necessary to enable us to keep up our prices in the present money, at the level of 5s. 2d. to the bushel of wheat. Or if the Continent should be able to supply us, the probabi- lity is, that the consequent reduction of continental prices will draw the money back again from us, until our own prices are reduced correspondently to the new continental level. It appears, then, to be probable, that we may not be able to substantiate a price of more than 4*. or 3s. to the bushel of wheat, in our present money. Our uses of money have be- come so enormous, and so multifarious, during the period that we have laid aside the metallic money, that even supposing we could support our present so- cial system upon a level of 5s. 2d. to the bushel of wheat, it seems exceedingly doubtful whether we shall ever be able to substantiate even that level of prices in coins of the present weight, quality, and de- nomination. It is true, that since the year 1791, the use of checks, drafts, and orders upon bankers, has tended in some degree to economize the use of gold coins. These parts of the paper system are still to be con- tinued in existence, and, pro tanto, their existence is itself an argument against the propriety of discon- tinuing the other parts of that system. It must be borne in mind, however, that all these instruments of credit are payable in gold coins, and that they cannot be paid unless the gold coins exist wherewith to pay them. In whatever degree, therefore, these in- 30 ON THE PRICES OF WHEAT, struments of credit have increased since 1791, a new demand is occasioned for gold coins. Gold coins ought to grow up everywhere like grass, if they are to be found everywhere in sufficient quantities to meet the multitudinous uses for which they will now be required. This has, in fact, been the case with regard to the bank notes, or practical money of the country, during the last thirty years ; they have sprung up everywhere from a thousand centres, wherever the wants of industry have required them ; and they have retired from circulation as soon as ever those wants have been supplied. It is in this way, that the wonderful division of Labour ', which we now see, has been substantiated in society, and that the multitudinous supplies of money have every- where been made equal to the multitudinous uses for which it has been everywhere required. If all these habitudes and accommodations, to which so- ciety has been accustomed, and under which it has acquired its present state, are now to be withdrawn ; and if gold coins alone are to form our current circu- lation, it is sufficiently clear that we shall require a far greater amount of gold coins than we required in 1791, to preserve merely the same range of prices which then existed. In whatever degree we fall short in obtaining and preserving the extra quan- tity of gold coins which will be required, it is evi- dent, that, in the same degree, the prices of wheat will fall below the ancient level of 5s. 2d. to the bushel. Let us take another view, and consider the change AND THE METALLIC CURRENCY. 31 which has taken place in the annual supply of the precious metals derived from their great fountains, the American mines. Mr. Humboldt represents the annual income which Spain has been in the habit of deriving from those mines, previously to the late war, as about eight or ten millions sterling. Mr, Flores Estrada, the Spanish Minister of Finance under the Cortes, states, however, that the supply which Spain derived from those mines for four years preceding 1808, was about fifteen millions sterling per annum. It is well known, that now these most important mines have almost entirely ceased to be productive. Mr. Estrada, indeed, goes so far as to say, that they only remit to Europe about two mil- lions sterling per annum, He states also, that it is next to impossible, that any thing like their former produce should ever be raised again ; alleging, that the former produce was only raised by a system of tyranny the most dreadful and coercive, which it is not possible to make the South Americans submit to, under the liberties which they now enjoy. Now, if this be the state of the American mines, and certainly we cannot have a better authority than Mr. Estrada, we must here again be driven to the conclusion that we cannot permanently support a level of prices equal to 5s. 2d. upon the bushel of wheat in our present coins. Mr. David Hume in- forms us, that the discovery of the American mines in the reign of Elizabeth had such an effect, that it " quadrupled the prices of property through- out Europe in forty years" raising the price of 32 OX THE PRICES OF WHEAT, wheat from about Is. 4d. to 5*. 2d. per bushel in our present money. What, then, must be the pro- bable effect of any considerable reduction in the productive power of those mines ? If their discovery raised the price of wheat from Is. 4d. to 5s. Zd., is it not probable that any considerable diminution of the annual supplies of bullion which they have afforded, will reduce the price of wheat from 5s. 2d. to 4s. or even to 3s. or possibly to Is. 4d. again ? Here then are two circumstances which render it probable, that we cannot substantiate, in our present money, so high a level of prices as 5s. 2d. to the bushel of wheat. The state of society is changed in England ; and the state of the American mines is changed. These two circumstances cannot fail to affect prices in some way. The extent and degree, it remains for time to discover. The rent of land will, of course, fall with the fall of the prices out of which it is paid. Another cir- cumstance must also tend to occasion a greater fall of rents, than the contemplated fall of prices may seem to require. The increase of taxation, direct and indirect, paid by the cultivators of land, proba- bly more than counterbalances the effect which the improvements in agricultural science and practice may be supposed to have produced in raising rents above the level which existed in the year 1791. In this case, the fall of agricultural prices, whatever it may be, whether to 5s. 2d. per bushel, or to 4s., or 3s., will furnish no adequate criterion of the extent AXD THE METALLIC CURRENCY. 33 of the fall of rent. Taxes, like tithes, must neces- sarily act in reduction of rent; and therefore it is probable, that the fall of rent will exceed the fall of agricultural prices, in whatever degree the increase of direct and indirect taxation, paid by the cul- tivators, may be supposed to exceed the increase of income derived from agricultural improvements. This gives certainly no very flattering prospect for the landed interest. It almost seems that they have fallen under the anathema of Lord Goderich, and that they are destined to be " extinguished" or at least " absorbed" like their humble neighbours, the country bankers. The capital of their tenantry, indeed, is pretty well " absorbed" already. The te- nants of a nobleman, in a midland county, held lately a meeting, to consult upon their mutual in- juries and embarrassments. With the candour and sincerity which adversity sometimes imposes, they laid bare their mutual circumstances to each other. The result of their deliberations ended in exhibiting proof that they had lost the enormous sum of 270,000/. by the cultivation of their farms during the last fourteen years ! This sum amounted to very nearly the whole of the rent which the noble- man had received ! Now, the average price of wheat during the last fourteen years, has been about 9 pete with foreigners, by our present measures, we break up our home trade much faster than we in- crease our foreign trade, and we, in fact, injure our foreign trade itself, by depressing the prices at which British manufactures are sold, and by dimi- nishing the amount and the price of the foreign im- portations, in which alone British manufactures can permanently be paid for. All that we have to study is to make sure the reward of industry, by adopting such a paper cur- rency, or such a metallic standard, as will preserve the general prices of commodities above the level of the fixed charges which have been contracted in what Lord Goderich calls " worthless rags." By adopting a currency of this kind, we reconcile and preserve all interests. We make agriculture, manu- factures, and commerce flourish, all equally and permanently. We bring labour into full and per- manent employment, and we ensure to it its full and permanent reward. We guarantee and make sure 62 A FEW FACTS. the rents of the landowner, the dividends of the fundowner, the taxes of the Government, and the securities of the creditor of a hundred kinds ; and at the same time we give to these important classes quite as valuable a kind of money as they have any just right to expect, and as it is possible for them to receive. If they are content with this kind of money they are yet safe ; but if they are not, it is not difficult to foresee the fate which awaits them. They will make their yoke too heavy for the nation to bear, and it will most surely be shaken off. A SCOTCH BANKER. No. V. THINGS AS THEY MIGHT HAVE BEEN. April 10, 1828. HAVING brushed away the difficulties which en- tangled our subject, let us now turn to the contrast ; and let us examine what would have been our situ- ation if justice and reason had guided our councils, instead of a blind eagerness to exact the payment of our credits in an unjust and unsuitable medium of exchange, more valuable than we have a right to expect. If we had adopted a just and practicable cur- rency on the return of peace, two modes of accom- plishing this object presented themselves, without producing the slightest injury or injustice to any class of the community. We might either have continued the paper system, under proper regula- tions, obligating the Bank of England to some given amount of issues, and limiting it there ; or we might have adopted a metallic standard of value, depre- ciated to a level with the practical currency of the country. 64 THINGS AS THEY MIGHT HAVE BEEX. If either of these measures had been adopted, every thing would have been prosperous and secure in England. If we had in this way accommodated our currency to the existing relations of society, in- stead of attempting to crush society into an arbi- trary conformity with an ancient and long-forgotten standard of value ; by a just and wise policy of this kind, we should have preserved all the elements of our national prosperity in ample, secure, and har- monious operation, without the possibility of injury or distress to any class of the community. Take, for instance, the situation of the farmers ; the most important of all classes of men. If they had preserved the war level of prices, or something near that level, they could have had no difficulty in paying rents. They would have discharged all their rents, debts, and taxes, with facility ; and they would still have possessed the moderate and secure reward of their industry. They would have had a positive profit, instead of a positive loss, in employing la- bourers ; and therefore all labourers would have been fully and beneficially employed. These unfor- tunate men would not have found it necessary to wander from door to door, " begging for leave to toil." Their labour would have been in request; they would have found firm ground under their feet ; and in the means of giving value to their hands, they would have found a better protection for their rights and their welfare than any which the work- house can afford. The landowner and the merchant would have been equally benefited, and so would THINGS AS THEY MIGHT HAVE BEEN. 65 the shopkeeper and the tradesman of every descrip- tion. By the due payment of his undiminished rents, the landowner would have been enabled to preserve his proper station in society, and to dis- charge all his settlements and charges without diffi- culty or injury. The ports might have been open for ever, to the benefit of the merchant, the shipowner, and the public at large, without Injuring either the farmer or the landowner. The increased pros- perity, and means of consumption, among the com- munity, would have enabled them to have consumed all the grain that could have been grown in Eng- land, and all that could possibly have been imported from abroad, without reducing English prices at all. If the foreign importations of grain into England did not raise foreign prices to the English level, the British exportation of bullion would quickly have reduced the metallic level of British prices in the proper degree, without at all reducing their nominal level. Thus all interests would have been benefited and conciliated, and all would have been preserved in a sound, healthy, and prosperous state. Nor would the monied interest, in reality, have been injured. The mortgagee, and the creditor of many kinds, would have received Jive per cent, in- stead of four or three per cent, for the interest of his capital, because the use of capital in trade and agriculture being permanently prosperous, a less proportion of the capital of the country would have been determined into the markets of interest, at the same time that a greater demand for money would F 66 THINGS AS THEY MIGHT HAVE BEEN. have existed in those markets, as was particularly shown in a former paper. The price of consols would have been preserved at 60, and the Go- vernment would thus have been enablea to repay its debt on the same terms as it was borrowed, instead of being obliged to pay 80/., 90/., and 97/. of heavy gold, for every 60/. borrowed in " worthless rags." Under this state of things, we should never have witnessed the strange apoplexy of the circulating system which is now visible. The purchase of land, and the cultivation of land, would have been profitable to purchasers and cultivators. The mil- lions of money which are now drawn up into the money market of London, and there stagnate in the hands of bankers and brokers and retired capitalists, would have been diffused generally throughout the country, and there, in the hands of farmers, manu- facturers, traders, and labourers, they would every- where have been actively employed in feeding and clothing the population, in supporting the national industry, and in working the great duties of pro- duction and consumption throughout the country. " Over- trading," " over-population," and " over- production," and all the contradictory phenomena which a contracting circulation presents, would never have been heard of. " Over-population" might possibly have existed in the number of igno- rant, selfish, and tyrannical rulers, but it could not have existed in that of honest and industrious la- bourers. The country could never have witnessed THINGS AS THEY MIGHT HAVE BEEN. 67 the extraordinary spectacle of two committees sitting in the same house, and at the same time, one for the purpose of inquiring how to diminish the number of mouths in the country, and the other for that of in- quiring how to dimmish the number of loaves in the country ! It is the business of mouths to devour loaves, and it is a business which they are always sufficiently ready to perform. But money is the organ which brings them into contact ; and without this organ their mutual uses cannot be accom- plished. Without a piece of money in the hand, a bit of bread cannot be moved to the mouth. If the House of Commons had preserved this organ in am- ple operation, in a sufficiency adequate to meet the duties which it has to discharge, they would have had no occasion for " Emigration Committees," nor for " Corn Law Committees." The farmers would have got remunerating prices, whether the ports were open or shut, and unemployed labourers would not have been found in any branch of industry throughout the country ; because the prices of com- modities covering the reward of industry, and giving to the vested interests no greater value than was their due, the employers of labour would in this way have had a profit in employing it, and thus all classes of labourers would have been permanently and beneficially employed in producing some kinds of commodities, and consuming others. The disastrous periods of 1816, of 1819, of 1822, and of 1825, would never have been known. The tumults, the distresses, the cares, the anxieties, the F2 68 THINGS AS THEY MIGHT HAVE BEEN, disappointed hopes, the unrewarded labours, the broken fortunes, the broken hearts all the frightful circumstances which oppress the recollection of the past, would have been entirely avoided. And, in- stead of looking forward for the future into a chaos of difficulties and dangers which no force can con- trol, and no wisdom can overcome, the Govern- ment would, indeed, have " dispensed from the ancient portals of a constitutional monarchy the blessings of prosperity and contentment throughout the land." It is desirable here to draw a short parallel be- tween the present period, April 1828, and April 1821. The analogy is remarkable, and, from the past, it gives us a glimpse of the future. In April 1821, the exchanges had been forced in our favour by the depression of 1819 and 1820. The gold coins were therefore tolerably plentiful, and the Bank of England taking advantage of such a state of things, had made their notes equally plenti- ful; and the greater part of this double increase of money was drawn up into London, there beating down the interest of money, whilst its principal was rising in value. The state of trade and manufac- tures, although not prosperous, was not absolutely ruinous, and the mechanics and artizans were in a state of tolerable employment, the cheapness of bread enabling them to pay a high price for butchers' meat and grazing produce. Wheat was at 6s. 6d. per bushel, whilst the price of butchers' meat kept up at Id. and Sd. per pound. The con- THINGS AS THEY MIGHT HAVE BEEN r . 69 traction of the currency, however, and the drawing of it up into the interest markets, were still in pro- gress. The one pound notes would have become illegal in two years, viz. in April, 1823. Of course it was not difficult to foresee that the price of wheat must fall much lower, and that the price of butchers' meat and grazing produce must quickly follow it. This was an opinion very strongly expressed by several witnesses before the Agricultural Committee of the House of Commons, then sitting; and the experience of a very few months fully justified it. In 1822 the average price of wheat for three months together fell to 4s. 6d. per bushel, and the price of butchers' meat fell to 3d. per pound ! This was directly previous to Lord Castlereagh's renewing the one pound note act for eleven years. Now, in April 1828, the very same state of things exists again. The gold coins are plentiful, the Bank notes are plentiful, and both these kinds of money are drawn up into the interest market, instead of being employed in upholding " remunerating prices" in the markets of property and labour. The state of trade and of agriculture is exactly the same. The same difference between the price of bread and of butchers' meat prevails. The price of the latter is full Id. per pound, whilst the price of wheat is only 6s. 6d. per bushel. The same contraction and stagnation of the currency is still going on ; and in April next year the one pound notes become illegal. The parallel hitherto holds good. Can any reason 70 THINGS AS THEY MIGHT HAVE BEEIS'. be given why it should not continue to do so ? Can any reason be given why wheat should not again fall to 4s. 6d. per bushel, and butchers' meat to 3d. per pound ? Certainly none. The extreme probability is, that these ruinous prices will return in less than twelve months. Lord Castlereagh acknowledged that the contraction of the currency produced this effect in 1822. A much greater contraction of the active currency of the country is now contemplated, and is rapidly taking place. It is certain that this greater contraction will produce a greater depression of prices than any which we have hitherto wit- nessed. Sir Henry Parnell, in his late pamphlet on paper money, at page 40, lays down some elementary pro- positions, which are too superficial to lead to just conclusions. He states very properly, that " the market price of commodities depends upon the pro- portion which the supply of them bears to the demand for them" but he neglects to show upon what this " proportion" itself depends. If he had considered the subject a little more, he would have found out that there are two sides of the question, and that the " market price of commodities" depends just as much upon " the proportion" between the supply of, and the demand for, money, as it does upon " the proportion" between the supply of, and the demand for, commodities. Money is as necessary to consti- tute price, as commodities : increase the supply of money, and you increase the demand for commodi- ties ; diminish the supply of money, and you di- THINGS AS THEY MIGHT HAVE BEEN. 71 minish the demand for commodities. The supply of commodities is the demand for money, and the supply of money is the demand for commodities. The prices of commodities, therefore, depend quite as much upon the " proportion" between the supply of, and demand for, money, as they do upon the " propor- tion" between the supply of, and demand for, com- modities. This is a truth which Sir Henry Parnell has altogether overlooked, and his neglect in this respect has led him into a labyrinth of errors. He has considered the supply of, and demand for, com- modities as acted upon by some obscure, uncontrol- lable, and capricious principles, having no reference to the state of the currency, and none to the legisla- tive enactments, which, at one period, have intro- duced cheap money and high prices ; and, when enor- mous monied obligations have been contracted in such cheap money, have then, at another period, in- troduced dear money and low prices, and have thus strangled the industry of the country by compelling it to discharge monied obligations which its monied prices will not redeem. If the money of the country had been kept ample to its purposes, in a state sufficient to keep the prices of property above the level of the fixed charges which the paper system has imposed, it would have been quite impossible for labour to have been in want of employment. All trade and all agriculture must of necessity have been permanently prosper- ous ; it could not have been otherwise among an industrious and intelligent people. Trade is the 72 THINGS AS THEY MIGHT HAVE supplying of human wants. Human wants are in- satiable. The products of labour are the things wanted. Therefore the extent of our trade is only limited by the extent of our productive power. " Over- trading" is impossible. Too great a proportion of the national industry may indeed occasionally be directed into particular channels, but the principle of private interest quickly regulates any inequality of this kind, and certainly and securely determines the proper proportions of the national industry into the proper channels which the national wants re- quire. The national wants are thus surely supplied as far as our productive power extends ; but this is their only limit. The greater our productive power, the greater is our real wealth, and the greater ought to be its individual distributions among- the commu- o nity. But money is the organ of productive power. Money is the organ which creates and breaks up the masses of productions, and distributes them ge- nerally into the general uses of the population. Money is the organ which substantiates the " divi- sion of labour " and enables every individual to con- vert the separate mass of his own particular produc- tions into such proportions of all other productions as his individual wants require. So long as this organ is efficient, the separate masses are convertible into general masses, at such times, and in such pro- portions, as the wants of the owners may require. If the productive power is increased, the general riches of the community are increased. Each individual obtains a greater proportion of such general riches. .THINGS AS THEY MIGHT HAVE BEEN. 73 and he converts that proportion into such particular articles, either foreign or domestic, as his habits and disposition induce him to prefer. AIL this is the work of money. If this vital organ is contracted and made deficient by the pressure of an unsuitable standard, then, in a state of society like ours, all the phenomena present themselves which we now wit- ness. The prices of productions fall within the level of the expenses attending them, within the level of those fixed charges which the paper system has im- posed. The reward of the farmer, the manufacturer, and the merchant, is thus destroyed. " The ox is muzzled that treadeth out the corn." The founda- tions of the national wealth are undermined. The markets are glutted with food and clothing on the one hand, whilst a hungry and naked population have not the means of purchasing them on the other. The great processes of production and con- sumption are thus obstructed. The whole machi- nery of society works wrong. Labour is made use- less to its owner and to its employer, and the in- dustry of the country dies. It is in this state of things that a British labourer becomes less valuable than an African negro. The latter is an object of purchase ; he can not only obtain an abundance of food and shelter, in ex- change for his labour, but his owner can sell him for a premium of a hundred pounds ! The labour of this poor creature is not worth one-third of what the labour of an Englishman is worth; and yet the Englishman wanders from door to door, offering in 74 THINGS AS THEY MIGHT HAVE BEEN. vain his invaluable labour in exchange for a scanty bread. The British labourer, powerful, laborious, patient, dutiful, and intelligent ; this noble indivi- dual, the real wealth and the strength of his coun- try, is in want of employment ! whilst the weak, the helpless, the lazy, the stupid African negro literally sells for a premium ! Can it possibly be doubted, that every healthy labourer in the kingdom is at this moment competent to produce, in every year, more th-aiifour times the food and shelter which the humble wants of his family require ? Here then, the British labourer offers to his country, in real wealth, an annual production of more than Jour times the necessaries and comforts which his wants require; he offers to his country the maintenance of four families in exchange for the maintenance of one ; and yet this invaluable labour is refused ! How is this to be accounted for ? Solely by the restora- tion of the ancient metallic standard having con- tracted the currency and the prices of p-'operty within the gripe of the fixed charges. If the fixed charges could be paid in kind, and if they were now so paid, with the same proportion of the products of industry as they received during the war, not a la- bourer in England could be in want of employment. The use of labour would be profitable to its em- ployer ; and since all men are desirous of profit, all would be willing to avail themselves of the ad- vantage which the employment of labour would present. There can then be no doubt that if the money of THINGS AS THEY MIGHT HAVE BEEN. 75 the country had been preserved on a footing ample to its purposes if no ruinous contractions of the currency had been attempted for the purpose of re- storing an ancient and obsolete standard of value, there can, in this case, be no doubt that the prices of property and labour would have been generally and uniformly preserved at about the war level, and that level would have covered the reward of indus- try in all its branches, and would have prevented the possibility of agricultural or commercial distress, and of those injurious fluctuations which we have witnessed for the last fourteen years. The whole population of the country would have been perma- nently, equally, and uniformly employed; and as fast as each class produced masses of its own pecu- liar productions, all classes would equally have con- sumed equivalent masses of each others produc- tions. Is any proof from experience required ? Look to the years 1818 and 1824. In each of these years the currency was increased by the positive acts of the Government. The means were lifted up to a level with the burthens, and all the national mise- ries disappeared. The chimeras of the political economists passed away twice, " like a hideous dream;" and twice they have returned with the contracted circulation effected in the years 1819 and 1825. In 1816 we were told that it was "the change from war to peace" which produced the dis- tress. In 1818 we were congratulated upon having "over-got" this dreadful "change." In 1819 we 76 THINGS AS THEY MIGHT HAVE BEEN* were told that it was " speculation," and " over- trading," and " over-production," and " fictitious credit," which had done all the mischief. In 1824 we were again congratulated that we had '* over- got" every thing, and that a solid and real " pros- perity" a prosperity founded on a " healthy cur- rency," and not on " worthless rags," was the sure and permanent reward of all our sufferings and pri- vations. In 1826, however, we come again to the old stories ; and again we have dinned in our ears the thrice-disproved dogmas of " over-trading," " over-production," and " over-population," as if it was in the very nature of mankind that they should under- trade to-day, and over-trade to morrow ! It is clear, therefore, that no kind of national " distress" could ever have existed, if we had pre- served our currency upon just and practicable prin- ciples. The years 1818 and 1824 were only dif- ferent from the years 1816, 1819, and 1826, in so much that the former were years of an increased and adequate currency, and the latter were years of a contracted currency. The one produced u pros- perity" and the other produced adversity ; because, at the two former periods, the means were adequate to the burthens, and at the three latter periods they were not. If the increased issues of the currency which were effected by the Government in the years 1817 and 1822 had been effected through the medium of the country bankers^ instead of principally through the Bank of England, and if the confi- THINGS AS THEY MIGHT HAVE BEEN. 77 dence of the productive classes had been re-assured by some public act at the same time, their effect upon the national industry would have been much more immediate and beneficial than it actually was. Such increased issues would, in this case, have passed directly into the hands of labourers and me- chanics, instead of first glutting the money market of London in stagnant masses, and then slowly and circuitously forcing their way into the active uses of the country. The Manufacturers' Loan Committee of the city of Dublin, in their late annual report, tell us wonders of the effect which the sum of 1,500/. advanced in small sums to industrious labourers, has had in maintaining seventeen hundred human beings ! Undoubtedly this statement is correct, and this is the way to benefit England as well as Ireland. The 1,500/. so advanced enables the borrowers to main- tain themselves and their families, and to conduce to the national wealth instead of its poverty. It enables them to produce every year many thousands of pounds value of their respective commodities, and to consume equal quantities of other commodities which they respectively require. The producers of such other commodities, finding thus an additional market for their products, are thereby enabled to consume the commodities produced by the first parties; and thus all parties are respectively and equally benefited, by being enabled to produce and consume the respective productions of each other. But this is the very trade of country bankers ; it 78 THINGS AS THEY MIGHT HAVE BEEN". is the very essence of their occupation. There is not a country banker in England who does not live in the daily and constant exercise of the vital func- tions, of which the Dublin Committee give us but a glimpse. The Dublin Committee have been practising by retail, what it is the very business of country bankers to practise by wholesale. The structure of society is such, that the men who own the capital cannot wield it ; and the men who can wield it, do not own it. In this way it is probable that one half the capital of the nation would be stagnant if these two important classes of men could not be brought into communication with each other. In an earlier and less complex form of society, the money scrivener interferes with his cumbrous and tedious legal forms and expenses. But in a more advanced and artificial state of society, when the division of labour becomes extreme, and when the universal supply of money becomes almost as vital as that of atmospheric air, then, the country banker supersedes the scrivener, and in a ready, cheap, and business-like way, he supplies every- where the temporary loans which the state of the circulation and the general wants of the community require. He derives the means of accomplishing this important duty from three sources; first, as the depository of the surplus capital, whether temporary or permanent, of his respective neighbourhood ; secondly, from the issue of cash notes ; thirdly, from his own capital. By these means the country THINGS AS THEV MIGHT HAVE BEEN. 79 banker is enabled to supply money where money is wanted, and to give assistance wherever the wants of industry require it. Tt is his business to gather power at all times, and from all parts, where it is in excess ; and to give it out at all times, and to all parts, where it is in deficiency. It is thus that the whole social machinery is kept in ample, gene- ral, and uniform operation, and that the means of employment and of bread are everywhere distri- buted as the wants of the community require. Strange it is indeed to reflect, that men exercising functions of this important character, through whose hands one-half of the active capital of the country receives its action upon the national industry, and without whose intervention, indeed, it may be truly said that society, in its present state, cannot be held together strange it is to reflect, that men occupying this important station in the social system should have been proscribed and hunted down by the Government itself! The infatuation of the managers of the Bruns- wick Theatre was certainly remarkable. In defi- ance of repeated warnings, they forced down the roof upon their own heads. May God grant that a similar fate may not await the ministers of the Brunswick Throne ! And yet the infatuation of ministers has certainly been more remarkable than that of the unfortunate individuals above alluded to. They have listened to no warnings. " Urged on by a fate which is 80 THINGS AS THKV MIGHT HAVE BEEN. sometimes witnessed in men whose hour is come," they have proceeded headlong to their object, with- out inquiring into its " policy," its safety, or its practicability. The builders, the carpenters, the men acquainted practically with the subject, have warned them from time to time, and have proved to them, again and again, that the building could not bear the weight which they were imposing. Still they have proceeded with infatuated hands, to lay on more and more weight. They have considered the builders as " interested persons," and have there- fore listened to theorists and bookworms, and cun- ning and plundering Jews. From time to time, the most loud and distinct crashes have confirmed the warnings of the builders, and have announced, in the most terrific manner, that something important was giving way in the social fabric. Still the mi- nisters have persevered, They have contented them- selves with removing the weight partially for short periods ; they have then plastered over the rents and gaps in the building, to conceal their own havoc from their own eyes; and then they have madly proceeded to lay on their weight again ! What can be expected from conduct like this ? Whilst this infatuated measure was in contempla- tion, the Bank directors humbly presumed to remon- strate with the Government, and to express their fears that the country could not bear the change which was contemplated. But Lord Grenville openly and i insultingly rebuked them, and told them, " that it THINGS AS THEY MIGHT HAVE BEEN. 81 was no concern of theirs to attend to the interest of the country, but that they must mind their own affairs ! " This eminent nobleman of the " ancien regime" has just published a pamphlet, acknowledging that he was wrong in his ancient opinions respecting the Sinking Fund. It is but a few years ago that he acknowledged that he was wrong in his ancient opinions respecting the Bank Restriction Act ; " He took shame to him- self," forsooth, for having supported Mr. Pitt in that great measure, which saved his country from foreign conquest ! Is it too much to expect that he will change his opinions again ? When he lost Mr. Pitt, he lost the pole star of his benighted mind ; and he has ever since wandered without a guide. When the plague, or other frightful disease, rages in the animal system, physicians and medical men are consulted. It is never thought that their being interested renders them unfit to advise and direct in a department peculiarly their own. But when a plague rages in the monetary system, another line of conduct is pursued ; the bankers and practical men are thought interested, and advice is raked up from every quarter, but from that where alone any sound knowledge of the subject is to be expected. Mr. Cobbett has been the man who has guided the Ministers and the Parliament into their present difficulties ; and there it would seem that he is dis- posed to leave them, or at least to lead them out only through the rugged road of " equitable adjust- ment" Like the wolf in the fable, he has prevailed G 82 THINGS AS THEY MIGHT HAVE BEEN. upon the sheep to give up their dogs : and now the sheep are almost at his mercy. The restoration of the ancient standard of value was urged upon them by Mr. Cobbett for twenty years. For twenty years the paper system was calumniated and denounced by him, as fraught with some tremendous and de- structive principles, which were certain to explode some time, and to destroy the Government in their explosion. By alarms of this kind, by a hundred wild and terrible imaginings, incessantly dinned in the ears of the Government, Mr. Cobbett at last drove them to the adoption of the only possible measure which could verify his predictions and his hopes that of subjecting the paper system to an unjust and impracticable test. There was but one way of verifying Mr. Cobbett's predictions re- specting the paper system, and that one way Mr. Cobbett himself has prevailed upon the Govern- ment to adopt. Having guided them into this fatal error, Mr. Cobbett then turned round upon them, and laughed at their folly, and openly declared in his Register, " that the measure which they had adopted was literally impracticable, or, if practica- ble at all, that it could not be carried into full effect without two millions of human beings dying of hunger under its operation ! " To men ignorant of the subject, this assertion of Mr. Cobbett may appear wild and improbable ; but to men who have studied it deeply it wears a far different aspect. Upon this occasion Mr. Cobbett was remonstrated THINGS AS THEY MIGHT HAVE BEEN. 83 with, and he was asked how he could censure the ministers for adopting a measure which he had him- self recommended to them? Mr. Cobbett's answer was remarkable, as given in his Register about three years ago : " Does not the farmer's wife," said he, " recommend the fox to enter into her yard when she has first planted a ball of poison for his destruc- tion ? Do the idiots think that I recommended the measure for their good ?" It is but justice to Mr. Cobbett to believe that the " destruction" here contemplated was merely meta- phorical and political. He never could have con- templated that ministers would have persevered in attempting to carry into effect a measure, the mortal consequences of which he has himself denounced and foretold. He merely contemplated the triumph of the Gridiron, to which he is justly entitled, believing, as a matter of course, that the ministers would start back with horror the very moment they perceived the true character of the measure which they had adopted. But, returning to the immediate object of this paper, it is not enough to say, that under a just and equitable depreciation of the currency we should have avoided all the miseries, the fluctuations, and the dangers of the last fourteen years; we should also have avoided all the dangers and the difficulties which now threaten and oppress us. No bankrupt tenantry, no impoverished yeomanry, no falling aristocracy, no embarrassed finances, no panics, no " barter," no " universal convulsions " in our mone- G2 84 THINGS AS THEY MIGHT HAVE BEEN. tary system. The national debt, that frightful bugbear, made ten times more frightful by our own errors, would by this time have disappeared ; or, at least, it would with ease have been reduced to its amount before the war. Let us consider this part of the subject a little closer. The national debt, in the year 1791, amounted to two hundred and thirty-eight millions. At the end of the war it amounted to eight hundred and forty millions. It now amounts to about eight hundred and thirty millions. Here, then, are six hundred millions of increase. At the price of 60 for Consols, which is the average price at which the whole of this increase was borrowed, it would have taken about three hundred and sixty millions to redeem it. This was, in fact, the exact sum in paper money which the Government received for it, and it was all that could justly be demanded in the discharge of it. It was advanced in paper money worth about one half of the general values which the present money is worth, or will be worth when its action is fully accomplished. There could, there- fore, have been no injustice, and no injury, in so acting with our currency as to preserve the value of money at the same level as existed during the period when this increase of six hundred millions of debt was effected. Therefore, three hundred and sixty millions of paper money, or of metallic money de- preciated in the same degree, would have been suffi- cient to have justly redeemed this increased debt of six hundred millions, Now, twenty millions per an- THINGS AS THEY MIGHT HAVE BEEN. 85 num for fourteen years, amounts to two hundred and eighty millions sterling, and adding the naturaljope- ration of interest at five percent., it amounts to more than three hundred and sixty millions. It follows, therefore, that an increased produce] of taxation during the last fourteen years, of about twenty millions per annum, would by this time have reduced the national debt to its amount before the late war, viz. to about two hundred and thirty-eight millions. How then could this increase of twenty millions per annum in the produce of taxation have been effected during the last fourteen years? It might have been effected with perfect ease, and it would have been effected without being felt by the commu- nity, if the paper currency had been preserved, or if a just and practicable metallic standard had been restored. It would, in fact, have been produced in a great degree by the natural operation of the na- tional prosperity, by the full employment of labour, and by the increased production and consumption of the country, which would have rendered the existing taxes yearly more productive than they have hitherto been. The taxes taken off since the peace amount to twenty-seven millions per annum, including the property tax of about fifteen millions. The pay- ment of these taxes was scarcely felt during the war. It did not, in fact, require much more than one half the property and labour which the present taxation requires. The whole population of the country, also, were fully and beneficially employed, and the 86 THINGS AS THEY MIGHT HAVE BEEN. general productions of their labours were sold at what are called " remunerating prices." If this state of things had been preserved permanently and uniformly, not only would the pressure of the taxes not have been felt, but the very same taxes would have produced much greater sums of money into the Exchequer. The abandonment of the Income Tax only would have been amply sufficient to have gra- tified what Lord Castlereagh called " the ignorant impatience of taxation," which was in reality the increased burthen of taxation, co-operating with the diminished means of the country to bear it. It was, in fact, the reduced prices which the changes in the currency had effected, and which gave an increased pressure to the taxation, at the same time that they crippled the productive powers of the country, and made them incompetent to bear even the former pressure. This was what Lord Castlereagh called " the ignorant impatience of taxation !" If he had preserved the " taxation" at merely the war level, and had at the same time preserved the national industry in full and uniform operation, he would have found no difficulty in continuing the same taxes which existed during the war, and which would, in fact, have produced daily more and more revenue, from the natural operation of the increas- ing population and productive powers of the country. The very most that could have been required, either by the House of Commons or the country, would have been the abandonment of the Income THINGS AS THEY MIGHT HAVE BEEN. 87 Tax r of fifteen millions per annum. This would have left a net produce of twelve millions per an- num, which would have been applicable to the reduction of the Government debt. The increase which would have taken place in the natural produce of this twelve millions per an- num, and in that of the other taxes of the country, under the uniform prosperity which a just and fixed currency would have produced, may be estimated from what took place in the produce of the present taxes during the years 1818 and 1825, when the pressure of our monetary operations was relaxed. In each of those years the produce of the existing taxes amounted to from five to seven millions per annum more than they produced in the preceding years of depression and distress. It is therefore not unreasonable to conclude, that under the system here contemplated, the increased produce of the whole existing taxation of the country would have been, at least, eight millions per annum more than it now is. Add this eight millions per annum to the twelve millions which the pressure of monetary operations only has rendered it necessary to take off, and we obtain a net produce of twenty millions per annum in taxation, which might have been effected during the last fourteen years, without being felt by the country. Under a just and practicable currency, indeed, not only would this increased produce of taxation have been effected without difficulty, but it would also have been attended with from one to 88 THINGS AS THEY MIGHT HAVE BEEN. two hundred millions per annum of increased in- come, derived from the preservation of the war prices, and/ro??z the general and uniform employment of the population. Thus, then, by a just adaptation of the currency to the wants and circumstances of the community, we might by this period have easily reduced our enormous national debt to the same level which existed before the war; and at the same time we might not only have preserved all the elements of our national prosperity uninjured, but we might also have increased our real riches, and have avoided all the distresses and the dangers with which our present tortuous and disastrous policy is attended. And what would have been our situation with respect to foreigners? No humility, no conscious weakness, no degradation from the commanding in- fluence to which our national qualities entitle us. Instead of canting about " national faith," we should have been in a condition to support the national honour, to which all "faith" is, and ought to be, subservient. Instead of truckling to the meanest of our enemies, we should have broke the head of the first despot that looked us in the face. Instead of fawning and cringing, and inviting in- sults by open professions of humility and weakness, instead of acknowledging, as Lord Liverpool did, that we " dare not threaten, because we are not in a condition to redeem threats by war," instead of sub- mitting to this galling, burning degradation, we THINGS AS THEY MIGHT HAVE BEEN. 89 should have been in a situation to set all nations at defiance, and to declare openly " that not a can- non should be fired in Europe without our per- mission." Nor would this have been an empty threat : we should have had ample means of enforcing obe- dience to it, without difficulty or injury. Our sur- plus revenue of twenty millions per annum, com- bined with the taxes applied to pay the interest of the six hundred millions of debt, which we should by this time have redeemed, would have given us a surplus income of forty millions per annum of the money of the war, which would have been applicable to the great purpose of humbling and controlling our na- tional enemies. This forty millions would have been equal in solid gold to twenty millions per an- num of our present money. What nation, or what combination of nations, could have dared to resist our will, with such a surplus revenue as this at our disposal ? How could the Russians, the Austrians, or the French, have dared to enter Turkey, Italy, or Spain, without our permission ? In short, turn the subject in what way we will, and examine it how we will, we find every thing wrong in our present system, and every thing right if a different system had been adopted. The system which is fraudulent, disgraceful, ruinous, and de- structive in all its parts, that we have eulogised and adopted, and the system which is really just, salu- tary, safe, and necessary, that we have calumniated, 90 THINGS AS THEY MIGHT HAVE BEEN. denounced, and rejected. By these means we have accumulated difficulties behind us, before us, and around us. Will the Duke of Wellington surmount these difficulties ? Will he break- up the system of gigantic plunder which is now in operation, or will he lend the influence of his powerful character in exacting the payment of paper taxes and paper debts, in heavy gold, out of the very bones of this oppressed and misgoverned nation? This leads us to another subject, which, perhaps, it is better to leave to time to develop. The Duke of Wellington succeeds to an unhappy station, at an unhappy time. The firm-hearted Castlereagh the obstinate, bigoted Liverpool the bold and talented Canning, each in their turn have sunk under the burthens to which the Duke of Wel- lington succeeds. The gentle, conciliating Gode- rich, took warning from the fate of his predecessors. In the dim vista of futurity, perhaps, he saw the dismal alternative of the revolutionary axe, or the cross-road grave. He was not a man to meet times like these. He therefore retired ; and of him it may be truly said, that " no act of his political life be- came him like the leaving of it." The Duke of Wellington is a different man. Born in camps, and bred up in the thunder of battles, it may be thought that he is a mere soldier. But the greatest soldiers have been the greatest men. A weak man never was a great soldier. Alfred and Marlborough, Caesar and Alexander, Charlemagne THINGS AS THEY MIGHT HAVE BEEN. 91 and Napoleon these have been the first of soldiers, and the first of men. Therefore, the country has every thing to hope from the Duke of Wellington. The Duke of Wellington is remarkable for cou- rage and decision. These are great qualities, but there is another quality more important still. " Knowledge," says Lord Bacon, " is power." If the Duke of Wellington exhibits this quality upon this trying occasion of his country's need, and if he exhibits also a corresponding integrity at the same time, he will leave a name behind him greater than any Englishman has left before. But unless he has a just confidence in this respect, he will do well to retire. The sword will not cut the Gordian knot of difficulties which surround him. His well-earned laurels will fade in the intellectual Waterloo which is now before him. A SCOTCH BANKER. No. VI. FAMINE. June 15, 1828. WHEN great principles are in operation, it is not difficult to foresee that great results must follow. The precise time at which such results will ensue, it is not indeed easy to calculate ; because the action of collateral circumstances interferes, and some- times retards and sometimes precipitates their opera- tion. If an act of Parliament had been passed to prohi- bit the cultivation of the earth, and if such prohibi- tion had been enforced by the bayonet, there can be no doubt that a famine must have been the sudden and certain consequence of such wild and destruc- tive legislation. Such an act of Parliament has not yet been passed, it is true; but one, very nearly analogous to it, has long been in operation. The act of 1819 has virtually rendered penal the cultiva- tion of the ground. It has destroyed the reward of industry, and rendered it impossible for farmers to cultivate the earth without sustaining a positive loss in so doing. Why, then, has not famine ensued ? Famine has been predicted for years by every man who has understood the necessary effect of forcing all the relations of society into an arbitrary con- FAMINE. 93 formity with an unjust, an unsuitable, and long- forgotten standard of value. Why, then, has not famine ensued ? Let us examine this important subject let us in- quire into the probability of an approaching fa- mine and into the causes which have hitherto tended to retard or counteract it. Certainly, if the ancient metallic standard of value had been carried into effect in 1816, as was at first intended, an immediate famine must have ensued : the plough could not have been kept in motion. The sudden and certain fall of English prices to the con- tinental level must of necessity have paralysed every hand. The pressure of the war burthens upon the reduced prices must have been equivalent to a war- rant of ruin, upon every farmer who should dare to cultivate the earth. It was therefore found necessary to proceed slowly and cautiously, scattering the ruin gradually over a number of years, and relaxing our hand from time to time, in order to allow the farm- ers and productive classes a little leisure to breathe, and to recover their exhausted spirits. The poor wretches have therefore been played with, like mice in the jaws of over-gorged cats ; they have been suffered to escape, as it were, one moment, in order to be again seized the next, and every time they have been seized, the talons have entered their very vitals. It was thus that in 1816 the Government relaxed their hand, and by restoring cheap money they kept the plough in motion, and restored the prosperity of 94 FAMINE. 1818. It was thus that in 1822 the Government again relaxed their gripe, and, by again restoring cheap money, they again restored the prosperity of 1824. At each of these periods, however, the Go- vernment did not relax their hand until thousands and thousands of honest and industrious farmers and manufacturers had been ruined. They did not re- lax their hand until, upon each occasion, more in- justice had been done to, and more misery had been endured by, the productive classes, than would have been done to or endured by the fundowners, if the Government had abolished the whole national debt at once. In 1825 the victims have been seized again; and although a good deal of " tampering with the currency" has since been had recourse to, it is but justice to the Government to allow, that they have hitherto " let no compunctious visitings of nature shake their fell purpose." It is not to be supposed, however, that the mis- chief which has already been done has been confined to the mere misery of the productive classes. Other effects have been produced, which are well worthy of the most serious investigation. The agricultural stocks of the country have been consumed, and the productive powers of agriculture have been injured. These two effects operating together, and combining with an increasing population, will probably conduce shortly to a frightful state of things. Mr. Jacob, in his late report to the Government, estimates the stock of wheat in England, at the har- vest of 1823, only five years ago, at 7,000,000 of FAMINE. 95 quarters. The probable stock, at the ensuing harvest of 1828, he estimates at only 700,000 quarters, or only one tenth of its amount five years ago. The harvests have not been bad during these five years, but have, upon the whole, been full average crops. The last year's crop, indeed, was notoriously more than an average one. We have, therefore, been consuming about 1,200,000 quarters of wheat per annum more than the country has pro- duced. Now, if this supply of food had been drawn from foreign sources, it would have been an alarming fact, unless those foreign sources were clearly and securely under our own control. But it becomes ten times more alarming when drawn from our stock at home from that stock which furnishes our main security against famine, and provides the most effi- cient means of keeping up the due cultivation of the land. If this stock amounted to 7,000,000 of quarters of wheat at the harvest of 1 823, the proba- bility is that it amounted to 20,000,000 of quarters, or to a whole year's consumption, in such years as 1813 and 1814, when the productive powers of agriculture were uninjured, when the dealers and corn-factors had the confidence and the means neces- sary to the holding of large stocks of grain, and when the 500,000 families of farmers had generally the means and the disposition to keep their rick- yards and their granaries full. It was of far more consequence to the nation to " keep faith" with the holders of this stock of 96 FA MINK. wheat, than with the holders of the national debt, if, indeed, it had been necessary that either should be sacrificed. The holders of this 20,000,000 of quarters of wheat had the " public faith" pledged to them, just as effectually as it was pledged to the holders of the national debt. They had just the same security from the Government that it should not be torn from their hands, and that its value should not be capriciously reduced by legislative enactments. Instead of being a burthen to the na- tion, it constituted a most important part of the national wealth, and was in fact necessary to the nation, as capital in the hands of the farmers to ensure the due cultivation of the land. So long as the nation possessed this stock of wheat, it held a guarantee against the evils of scarcity ; and, in the event of one or two harvests proving deficient, the nation could rely upon having its wants supplied out of this stock, until some one or more abundant harvests should replace the deficiency occasioned. It presented therefore the means, the cheap and secure means, of securing the due cultivation of the land, of guaranteeing the nation against the evils of scarcity, and of ensuring a general and uniform sup- ply of bread, with only small casual variations in its price. Instead of possessing a stock of 20,000,000 of quarters of wheat, however, or a whole year's consumption, which it seems probable we did pos- sess at the harvest of 1814, or even of 7,000,000 of quarters, which we possessed at that of 1823, FAMINE. 97 it now seems from Mr. Jacob's Report, that we shall possess only a stock of 700,000 quarters, or about one fortnights consumption, at the harvest 0/1828! Mr. Jacob's Report would not, perhaps, be much to be relied upon, if it were not supported by colla- teral circumstances ; but it certainly assumes a very important aspect when considered with reference to the cessation of agricultural enclosures, and to the acknowledged increase of the population ; and more particularly with reference to the universal im- poverishment among the agricultural classes, and to their acknowledged want of means and of confi- dence to hold any considerable stocks in their pos- session. These unhappy classes of men have been toiling for year after year in vain. They have reaped poverty as the reward of their labour. They have been compelled to give two bushels of wheat where they contracted to give one, and therefore it is not to be wondered at, that their granaries and their rick-yards are at last exhausted. Here, then, the secret of " over-production" is explained. It is the emptying of the granaries and the rick-yards, which has caused the glutting of the markets. The money has been drawn out of the markets, and the stocks of grain have been forced in. It would therefore have been strange if the appearance of " over-production" had not ex- isted. We have closed our ports for the last nine years, we have therefore had little or no foreign im- portations during that long period. But we have H 98 FAMINE. been drawing 1,200,000 quarters of wheat per an- num from our stocks ! By this means, and by keep- ing a considerable part of our population in a half- fed state, we have been enabled to support existence without the aid of foreign importations. But this has not been the only fund that we have been drawing upon. Like wild and reckless prodi- gals, we have also been drawing the means of our present maintenance out of our future bread. It is well known to all who have inquired into the sub- ject, that the same impoverishment of the agricul- tural classes, which has forced the stocks of grain into the markets, has also at the same time com- pelled the farmers to exhaust, neglect, and over- crop their land. In some instances they have broken up their pastures to enable them to grow cheap crops of wheat, without manure, and almost without labour ; in others they have forced the rota- tion of crops, and have grown three crops of wheat where the fertility of the land could only support two. They have not, in this way, produced more than the population required; but they have pro- duced more than the land could grow without injury to its fertility. They have, in short, " over-crop- ped" and " over-tilled" the land, in order to enable them to raise the present means of meeting their present necessities. By thus drawing upon the future to support the present, and by giving up their stocks, the agricultural classes have been en- abled to supply the wants of an increasing popula- tion, during the absence of those foreign importa- FAMINE. 99 tions which the country has formerly required and received. The decomposition of the stocks of grain, and the exhausting of agricultural fertility, have furnished the annual means of maintaining our po- pulation for a few years, and in the meanwhile we have rejected the supplies which foreign nations have offered us, and those nations have conse- quently ceased to grow them ! And whilst the necessities of the farmers have driven them to the adoption of this destructive sys- tem of over-tillage, and breaking up of pastures in the best lands, the very same necessities have driven them to the adoption of an equally destructive sys- tem of a different character in the inferior lands. It is not difficult to point out whole parishes of this kind of land, and of lands of expensive cultivation, where cultivation is entirely abandoned. The land is laid down as no longer paying to cultivate, and is now rapidly becoming a sheep-walk, or a desolate waste. Over thousands and thousands of acres the gorse and the heath are recovering their ancient do- minion, and the solitary bittern and the curlew are building their nests where the song of the reaper was but lately heard. The best lands are, in fact, in many places exhausted with over-cropping ; the inferior lands are becoming waste, and all land is cultivated in a slovenly, neglectful, and poverty- stricken manner. These are facts well known to agricultural men, and they may more or less be wit- nessed in every part of the country. H 2 100 FAMINE. We come, then, to a crisis shortly. Our popula- tion is increased ; our agricultural productive power is diminished ; our agricultural stocks are exhausted. For year after year, our supply of bread has been unequal to our consumption, and we have been drawing one or two millions of quarters of wheat per annum from sources which must shortly fail us. We come now to the end of our reckless career. We are rapidly approaching a period when we shall want ten times the foreign importations which we formerly obtained, and when foreign nations will not be enabled to give us one half of what they formerly gave ! In all reasonable probability, it would therefore appear, that we are on the verge of & famine. This deadly calamity has been concealed from the public eye by the collateral circumstances attending it; it has been in some degree retarded and counter- acted by those circumstances; but still it has been advancing with slow and remorseless certainty to its consummation. And, unfortunately for us, our situation is becom- ing so exceedingly complicated, by the mismanage- ment of our rulers, that it begins to appear doubtful whether we can adopt any measures for our relief, wnich will not either exasperate our calamity for a period, or precipitate a political catastrophe. There are only two ways of restoring agriculture to a healthy state, and of rescuing the country from the danger which threatens it. We may either lift FAMINE. 101 up agricultural means by restoring the paper system boldly and permanently ; or we may cut down agri- cultural burthens by an equitable adjustment. Suppose, then, that we adopt the former ; and that, whilst we reassure the confidence of the pro- ductive classes, we stimulate and encourage the country bankers to open their seven hundred sluices of the circulation, and to issue their powerful but "worthless rags" from seven hundred centres, into the uses of industry. It would be of no use to act upon the " rag makers," without at the same time acting also upon the public mind ; for unless the public are willing to borrow the " rags," the " rag maker" cannot issue them. It is therefore necessary to act upon both parties ; the one must be stimu- lated to borrow, and the other to lend. Both these dispositions are rather stagnant at present, and are becoming daily more so. Prudent and safe men are afraid to borrow money, because they cannot safely and beneficially employ it. Bankers are afraid to lend it, because they know that it cannot be safely employed, and because they remember the late panic, when they were compelled to pay every body, whilst nobody could pay them. It may be thought by some persons, that it is right that this system of borrowing and lending should cease. It may be thought by others, that the system of lend- ing and borrowing land should cease also, and that no farmer should be allowed to cultivate land which is not his own. These are some of the wild theories which have latterly been invented by political econo- 102 FAMINE. mists ; but they are totally inapplicable to the pre- sent state of society. Without the borrowing of the land, millions of acres must remain uncultivated; and without the borrowing of the money, millions of human beings must die ! The unhappy " rag makers," having- fallen .under the anathemas of Lords Goderich and Liverpool, and of Mr. Cobbett, have for the last three years been obliged to act diametrically opposite to their own interest and to that of the public. Instead of acting as arteries of the circulation, distributing the circulating medium in all parts where the wants of industry require, they have been obliged to act as drains upon the circulating system, drawing up the money from the wholesome operations of agriculture, manufactures, and trade, in order to employ it in Lon- don upon short and safe securities, where they think they can rely upon getting it again at a moment's warn- ing. But if this unwholesome and unnatural state of things should be counteracted by the Government, and if the bankers and the public should again be induced to open the sluices of the circulation in seven hundred quarters, there can be no doubt that, in this case, agriculture would quickly become prosperous, and the due cultivation of the land would be restored and secured. But in the position in which we now stand, care is required in restoring the paper system. There was no fear of excess during the war there never was an excess of paper money during the war ; nor was there any in the year 1825. The money of FAMINE. 103 the country was never more than the exigencies of the country required. If any period of the late war presents an exception to this remark, it was the year 1800, when the increase of paper money, co- operating with a deficient harvest, perhaps tended to occasion the holding and the hoarding up of a greater proportion of the stock of grain in the country, than the interest and welfare of the coun- try required. This is the emergency which we have now to fear in a much more serious degree. If we should have a deficient harvest in the present year, when our stocks of grain are exhausted, it becomes doubt* ful whether renewed issues of money would not, for a short period, increase the sufferings of the popula- tion. Such renewed issues would supply the means and the disposition to hoard grain, at the very time that we should want more than the whole of our grain in the market. We should begin to re-accu- mulate stocks, when we ought to decompose them. In the immediate absence of any eligible invest- ments for money, too great a proportion of the new money might probably for a time be employed in buying up and hoarding of grain, and in jobbing and dealing in an article, to which an acknowledged scarcity would cause an unusual degree of confidence to attach. In this way the price of wheat, instead of keeping at 10s. or 12s. per bushel, which, in the present means of the country, would be a famine price, might probably rise to 20s. or 30s. per bushe], 104 FAMINE. before the action of the new money in raising the prices of labour could have time to enable the dis- tressed population to pay 10^. per bushel. Here, then, we should come to a state of things which would render the restoration of the paper system a difficult and dangerous operation. And yet the very deficiency of the harvest, which would occasion the danger, would render some great mea- sures absolutely necessary and unavoidable. Ob- serve the operation of such deficient harvest. It would open the ports ; but it would not give the farmer the means of supporting cultivation. The opening of the ports would draw the gold abroad. All bankers must then pull in their circulation of notes. By the action of this double exhaustion, the prices of wheat would again be forced down, and the ports would again be closed, even in the midst of famine ; for the dearth of money would be still greater than the dearth of bread. In the midst of famine, then, we should have panic. The money would be unequal to the task of paying the debts, and therefore the debts could not be paid, and panic would ensue ; panic which could not, in such case, be relieved without a restoration of that very paper system which we were seeking to avoid. If, then, we should, in such case, be determined to avoid the restoration of the paper system, we should then be driven upon the other alternative of an equitable adjustment. Unless we had recourse FAMINE. 105 to this, in such a state of things, we could not keep the plough in the ground, nor could we possibly prevent the whole frame of society from falling upon our heads ! Now, how would it be possible to work equitable adjustment under the terrible emergency here con- templated ? Certainly, if we must have recourse to this great measure, we had better attempt it now, while society is tranquil, and whilst we have leisure to digest its various complicated and multitudinous details. But in a state of society like ours, it seems almost an impracticable measure. In other countries, where the state of society is less complicated and artificial, general rules may be established which may be safely acted upon ; but in England such general rules could not be defined or rendered ap- plicable. How, for instance, could the two hundred millions in the hands of the bankers be dealt with ? This sum of money belongs to individuals, varying from day to day ; and yet it is the basis on which permanent credits have been formed. The tern- porary credit on the right hand supports the per- manent credit on the left hand. How, then, can one be reduced, without reducing also the other? So also with bond debts and simple contract debts : the bond debt on the right hand supports the simple contract debt on the left hand. The money ad- vanced upon simple contract debts is again lent out upon bond and mortgage debts. How, then, can one be reduced without the other? The varying 106 FAMINE. debt and the permanent debt, the bond debt and the simple contract debt, are all interwoven with each other, and cannot possibly be separated. The re- duction, then, must apply equally to all existing debts, and the man who advanced his money in 1822, when money was strung up to nearly its an- cient value, must submit to the same reduction as the man who advanced it in 1825, when money was depreciated to nearly the war level. This would be manifestly most unjust, and yet there would be no means of avoiding it under Equitable Adjust- ment. The same difficulties present themselves in every other part of our social system. General rules are not applicable, and cannot be made applicable. In the very beginning of our attempt we should meet a difficulty which would probably be insurmountable. It would be necessary, in the first instance, to stay the course of law generally, and to grant a kind of restriction act to every individual in the country ! Without this a general run would take place upon the national debt, and upon every other debt in the kingdom. Every individual would be anxious to get his full amount of money whilst it appeared practicable to do so, and a million of sheriff's war- rants for debt would be set in motion in every county in England ! What Government could stand its ground in the midst of such a whirlwind as this ? The Government must then refuse equitable ad- justment. It is not practicable now, nor at any FAMINE. 107 future time. If, then, they are determined to avoid the paper currency, and to avoid also an adjustment of the standard of value, they must proceed in their present course. But here also the same fate will still await them, procrastinated for a while. Even if the apprehensions of famine should be unfounded, they will still have to contend with wheat at 4s. or 3s. per bushel, and with butchers' meat at 4d. or 3d. per pound, as shown in the Globe of the 22d of October last. At these prices, or at prices any thing near them, no rent can be permanently paid in England, without reducing the taxation to some- thing near the level of 1791. If any rent whatever should remain, it will be more than swallowed up by family settlements and other incumbrances. But the landowners have still the political power in their hands. They will, therefore, in their own defence, be compelled to pull the taxes from under the feet of the soldier, the pensioner, and the fundowner. The Government might as well reason with the winds, as with men whose rents are rapidly falling within the level of their debts and fixed incum- brances. No reason will persuade men in this situ- ation to grant taxes to the Government, and there- fore the taxes will not be granted. If the fund- owners get one-half of their present dividends, they will be fortunate, and the same will be the case with the soldiers and pensioners. Thus the expenditure of the landowner, and that of the fundowner, and that of the Government, will all be reduced at 108 FAMINE. almost the same time. This general reduction of expenditure will act principally in London, where the greater part of these three descriptions of income are now expended. The population of London will thus be thrown out of employment, and out of bread. Half a million of hungry wretches will be let loose upon the Government, at a time when the Government will be weakened and distracted with a hundred difficulties, and unable to pay its creditors on the one hand, or its soldiers on the other. There are thus three courses for the Government to adopt. They may restore the paper system, and afterwards either render it permanent, or convertible into a just and practicable metallic standard; or they may adopt equitable adjustment, and thereby precipitate the grand denouement of our errors ; or they may slumber on in their present course, amidst dangers at home, and insults abroad, until the iron knell of the tocsin awakes them. The Duke of Wellington is riot a man for this latter course. He is not a man to submit patiently to the grossest insults, and to pretend not to see them. In his hands the national honour will at least be safe. He may be hostile to the paper system. Be it so. He may possibly be ignorant of the mortal ruin which attends our present system. Be it so. But he knows what is due to his own character, and to the national honour. He knows that the national debt was contracted to preserve the national honour, and if these two great princi- FAMINE. 109 pies must come in collision if no possible means can be devised whereby they can be reconciled with each other, he will sacrifice the instrument to the object, and shake off the debt, " like a dew-drop from a lion's mane." The Government must not lay the flattering unc- tion to their souls, that they are already come to the worst. Lord Liverpool boasted of this seven years ago, and found himself woefully deceived. They are yet but at the beginning of troubles. They have as yet scarcely tasted a drop of that bitter cup, which they must drain to the very dregs. When they shall see the continental level of prices established permanently in England; when they shall see the continental level of rents established, and the continental level of taxation and of wages established ; when they shall see all these mighty consequences established in England, and all work- ing and harmonizing together, then they may be- gin to think that their troubles are at an end. But what a world of calamities must they not witness before this state of things appears ! Famine, bank- ruptcy, and revolution these are the three demons which they have yet to grapple with. When the Duke of Wellington shall have overcome these gaunt and remorseless enemies, he may sit down under the shadow of his laurels, and rest in peace. These are probably new enemies to the Duke of Wellington. They are not new to Lord Liver- J 10 FAMINE. pool ; they were proved to him to be the inevitable consequences of his measures in 1819. It was proved to him in 1819, that he was entering upon " a race where the course was filled with diffi- culties and distresses, and the goal was death." It was proved to him that he was pursuing a course, " beginning with poverty, misery, and universal fraud, and ending in famine, bankruptcy, and revo- lution." It was proved to him, that in scattering the ruin over a series of years, he was not changing its character, but that he was " giving the nation to perish by the tedious and intolerable agonies of prolonged disease, instead of sinking under the sudden and swift destruction which a bolder policy would have occasioned." It was proved to him, in every shape and way in which proof can be given, that the restoration of the continental mea- sure of prices would necessarily produce the restora- tion of the continental level of prices ; that this con- tinental level of prices would literally double the real weight and the real value of all British obli- gations; and that the consequent pressure of Bri- tish obligations upon the country would be made so extreme, that it would be certain " to pull down the fabric of society upon his head." With des- perate fatuity he persevered in his fatal career he rejected all counsel he refused all inquiry. The panic comes, and, with a voice of thunder, tells him that he is wrong; still he perseveres. Prosperity and adversity are laid both before FAMINE. Ill him. Instead of rectifying the standard, which caused the adversity, he proceeds to rectify the paper, which caused the prosperity ! Stern, inflexi- ble, ruthless, and remorseless to the very last, with dying breath he imprecates calumnies and penalties on the heads of his victims, and leaves famine, bankruptcy, and anarchy, as a legacy to his successors. A SCOTCH BANKER. No. VII. SCOTCH AND ENGLISH BANKERS. July 20, 1828. THE Scotch banking system is somewhat different, but it is not better than the English banking system. The failures among the English banks are not so much a proof of weakness or imprudence in those banks, as they are of crime or error in the Govern- ment. The principal, if not the only fault, in the English bankers, has been ignorance ; not ignorance of their own business, but ignorance of the wild and mortal political measures which the Government has been secretly setting in operation. This has been their grand fault. In consequence of this fault, they have stood still patiently, and suffered themselves to be fleeced and plundered for fourteen years to- gether. Some of them have been fleeced out of their whole property, and all of them have been unjustly injured in their property and their cha- racter in various ways. If they had been as good politicians as they are bankers, if they had under- stood their political rights and interests properly, they would have resisted the introduction of the present gold and silver coins into circulation, except SCOTCH AND ENGLISH BANKERS. 113 with a prospective operation ; and they would have insisted upon their right of making their retrospec- tive payments in Bank of England notes, or in some other description of paper currency, equally cheap and tangible as that in which they had made them- selves liable to such payments. There would then have been no failures among them, or none worth notice, and none among their connections generally. The debts due to them from the public, contracted in what Lord Goderich calls " worthless rags" would all, generally speaking, have been good ; and they would also all have been tangible, or capable of being got in when wanted. But when the public, or rather that portion of the public which comprises the productive classes, when these unhappy helots and " adscripts gleba" were ordered to pay the bankers heavy gold at the ancient low price, instead of " worthless rags," it is no wonder that the public should have become insolvent to the bankers, and that the bankers in their turn should have been, in some cases, incapacitated from paying every body, at a period when nobody could pay them ! It does not appear, however, that many of the English banks have been made absolutely insolvent ; for even the individuals among them who have been driven into the Gazette, seem generally to have paid 20s. in the pound. The public have therefore not been injured by the English bankers ; but, on the contrary, have been greatly benefited by the sacrifices which the bankers made in support of public credit, at a time when all credit must have given way, but for their i 114 SCOTCH AND ENGLISH BANKERS. interference. They presented in reality seven hun- dred outworks of the public credit, against which the public panic was allowed to break itself, until the Government obtained time to mitigate the con- sequences of its own errors. Had it not been for the resistance, which the capital and character of the English bankers enabled them to make, the Government would have been swept away in the storm of its own raising, without the possibility of escape or rescue! The English bankers presented themselves everywhere in the front of the ruin, which Government had let loose. Some were crushed entirely, and all were injured, but by their sacrifices the Government was saved ! Who could have expected, that the Government, thus saved by the bankers, would have immediately turned round upon them, in order to reproach, de- grade, calumniate, and punish them ? And yet this has literally been the conduct of the Government towards the English bankers. Every thing is wrong among them forsooth, because they cannot reconcile impossibilities ; because they cannot gua- rantee the conversion of two thousand millions ster- ling of " worthless rags" into heavy gold! This is about the sum of all public and private obligations, which the English bankers were required to gua- rantee, in a direct or indirect way; and because they could not accomplish this bedlamtike task, they are to be accused of insolvency, and weakness, and fraud, and of not understanding their own business, and of many other charges, too stupid or too malig SCOTCH AND ENGLISH BANKERS. 115 nant to be worth alluding to. And the Scotch bankers forsooth, are to be lauded to the very skies, for standing their ground when no one pressed them ! Theirs is the very beau ideal of banking, it seems, because by their combinations and by their arbitrary and interested defiance of both the public and the law, they had previously to the panic prevented such a thing as a sovereign, or a bank of England note, from being even known in Scotland /" The common sense of every man must see at once, that in such a state of things as this, there could be no great difficulty in the Scotch banks con- tinuing to give one bit of paper in exchange for another bit of paper. Scotland was not the coun- try where sovereigns or Bank of England notes cir- culated in 1825. Edinburgh was not the port from which ten millions of sovereigns were ex- ported in that year : Edinburgh was not the city from which five millions of Bank of England notes were suddenly drawn in, in that year, in order to make the bank notes as scarce and as valuable as the few remaining sovereigns in circulation. These great operations took place in England and in London. The English money was suddenly con- tracted by the export of the coins, and by the calling in of the bank of England notes, and it became thus unequal to the duty of meeting English debts and obligations, which consequently gave way, and pro- duced panic. How could the Scotch banks be affected ? There had been no drain upon them, either for coins, or for Bank of England notes, i 2 116 SCOTCH AND ENGLISH BANKERS. neither of which species of money existed in Scot- land! Nothing but Scotch notes existed there, and nothing but Scotch notes were known there. There was no calling in of these notes, and there was no exportation of gold coins from that country, and therefore there was no panic, and there could be no panic. If these Scotch notes had been reduced in the same proportion as the English circulation of gold coins and Bank of England notes had been reduced, the same consequences would have ensued in Scotland as in England. The same scarcity of money, the same difficulty of paying debts, and the same distrust, alarm, and panic consequent upon their non-payment, would have been exhibited in Scotland as were exhibited in England. All the difference between the Scotch and the English bankers is, that the former, by a system of union and combination, which had been perfecting for one hundred years, had established in Scotland a kind of Moral Bank Restriction Act, which enabled them to pay " worthless" debts and " worthless" taxes, in " worthless rags," and prevented the possibility of their being suddenly called upon to pay such debts and such taxes in heavy gold. If there is any good in this union and combination, it is only so far a proof that a paper system is better than a gold system, and that it ought to be rendered perma- nently legal. For otherwise it is sufficiently evi- dent, that the mere shoving off of the metallic test, by aid of mutual combination among the bankers, is worse than useless; because it only increases the SCOTCH AND ENGLISH BANKERS. 117 mischief and the ruin, which must inevitably ensue, whenever such test comes to be applied at last. It is therefore only good, upon the supposition that the payment in heavy gold can be shoved off for ever ; and in this case, it is certainly better to have this object effected by the authority of Parliament, and not by means of a combination of interested bodies counteracting the law of the land. The English bankers have met the measures of the Government in a different spirit, and in a differ- ent spirit they are rewarded. The Scotch bankers resist the Government, and the Government leaves them their small note circulation, and sends no med- dling establishments among them. The English bankers obey the Government, and the Government not only deprives them of the small note circulation, but sends branch banks among them to reduce their moderate charges full fifty per cent., and literally to annihilate their moderate profits* ! The English bank- * It is strange that the Bank of England cannot reduce its charges to the public as well as to individuals. They charge the public 260,000/. a year for the management of the public debt, besides about 200,000/. a year more which they derive from the interest of the balances of the public money in their hands ; and at the same time they do the business of individuals for nothing ! The country bankers will be glad to form a new Bank of England equally strong as the present, and to contract to do the public business for one half of what the public is now compelled to pay. Is it not right then, that the Bank of England should be com- pelled to make this reduction to the public in the first instance, before it is allowed to waste the public resources in a reckless warfare against the profits and fortunes of individuals ? Cer- tainly it was the duty of the Government to compel the Bank of 118 SCOTCH AND ENGLISH BANKERS. ers have done every thing in their power to assist the Government in the unjust and impracticable object of converting " worthless debts" and " worth- less taxes" into heavy gold, and for thus aiding and abetting the Government, they are denounced and calumniated, degraded and punished, whilst the refractory, the monopolizing, and engrossing Scotch bankers are extolled to the very skies, for having so far opposed the errors of the Government, as not to allow such a thing as a sovereign to be even known in Scotland! The Scotch bankers pretend that their circulation of cash notes cannot be in excess, because they have a custom of changing their notes with each other once a week. If there is any merit in this, the English bankers are more meritorious still, for they change notes with each other every day, in every con- siderable town in the kingdom ! But the argument is erroneous. Such changing of notes does not prevent England to reduce its charges, where they are confessedly too large, before they encouraged it to do the business of the country bankers' connections for nothing! What right has the Government to allow the public purse to be used in this way, for the mere purpose of injuring a respectable body of tradesmen, whose trade is no monopoly like that of the Bank of England, and whose profits have never been complained of by a single individual in the country ? If the Government will allow the country bankers to form a new Bank of England to compete freely and fairly with the old Bank of England, they will quickly compel the latter either to close her branches altogether, or otherwise to conduct them upon a system which will enable them to pay the expenses attending them out of their respective profits, and not out of the public purse / SCOTCH AND ENGLISH BANKERS, 119 their being in excess. It only enables each banker to pay his own notes away, instead of those of his neighbour ! If they were to change notes only once a year, instead of once a week y it would not add one single note to the circulation. It would only com- pel each bank to pay away its neighbours notes instead of its own notes, or otherwise to lock up the notes of other banks in its chest, whilst its own notes were also locked up to a similar amount in the chests of others, neither of which operations would make any difference whatever in the general number of notes in circulation. The Scotch bankers also allege, that they have a system of granting cash credits, which is greatly beneficial. There is no doubt of the truth of this. The only wonder is, that it should be assumed as peculiar to Scotland, when every tradesman and farmer in the kingdom knows well, that it is prac- tised equally in England, under various names. In fact, the main business of a country banker is to borrow money from those who have too much, and to lend it out to those who have too little. The country banker undertakes the duty of giving action to the dormant capital of the country. It is his business to interpose the guarantee of his capital and character between lenders and borrowers ; and without his interference the circulating medium would stagnate in inert masses, whilst half the in- dustry of the country was suffering from the want of it. Into these inert masses, money has always a ten- dency to gather. In former days, they were sometimes 120 SCOTCH AND ENGLISH BANKERS. broken up by the arbitrary exactions of the crown, which was interested in plundering the Jews, who were the general holders of money and monied obligations. Afterwards the money scrivener drew out the money from its hoards in a more honest and equally useful way; and now, the country banker supersedes both the crown and the scrivener, and keeps the circulating medium in a general state of activity, to the general benefit of all. The only instance in which the Scotch banks can in any way be reckoned better than the English, is their assumed less liability to failure. In this re- spect, it must be allowed that the Scotch possess an apparent advantange ; but it has been already ex- plained how that advantage arises, that is to say, from not being tried. It is not difficult to show, however, that full nine-tenths of all the failures that have ever taken place among the English bankers, have been directly owing to the measures of the Government, against which neither the Scotch nor the English bankers could effectually guard. The former, however, by their union and mutual co-operation, and by the local habits of their country, have been enabled to maintain their ground better than the English bankers, who, being more pressed, and having less union and co-opera- tion among themselves, have in some cases been compelled to give way, and to expose their cre- ditors to the inconvenience of waiting a few months for the due discharge of their engagements. The actual loss, however, which their creditors have v 5 SCOTCH AND ENGLISH BANKERS. 121 sustained generally from their positive insolvency, is literally too trifling to be worth notice*. Let the Government but do justice to the English * Mr. Burgess has stated lately, upon good authority, that the mercantile failures in Liverpool alone during the year 1810, amounted to more than three times the amount of the whole sum which was due from the insolvent English bankers who failed at i\\Q panic of 1825-6. He states further, that the insolvent Eng- lish bankers have already paid nearly the whole amount due upon their whole debts, whilst the insolvent merchants at Liverpool have only paid about 3s. 4d. in the pound ! There were no " worthless rags" in Liverpool, no paper money of any kind, but bills of exchange and Bank of England notes. And yet it appears, that the positive loss of the public in one single year, in the town of Liverpool only, from mercantile failures, was ten times over more than the public have sustained in all England from the failures of bankers during the memorable period of the late panic ! How then is it possible that the failures among the bankers, which have produced so little real loss to the public, can have made so great a noise in the country ? Lord Goderich and his cloud legislators have done a good deal in promoting this noise ; but the fact is, that the law makes as great a fuss about proving a one pound note as a ten thousand pounds debt, and the lawyers contrive to make as much business and as much profit, out of a country banker who fails with three or four thousand one pound notes in circulation, as they make out of a mer- chant who fails with three or four hundred thousand pounds owing on bills of exchange and book debts. This is not so much the fault of the lawyers as of the law makers, and is a slight in- stance of the consequence of legislators living in the clouds. If a competent number of tradesmen and men of business were in Parliament, the laws and customs which allow things of this kind would quickly be abolished, and things would be settled in a business-like way, with a hundreth part of the labour and a thousandth part of the expense with Avhich they are now attended. 122 SCOTCH AND ENGLISH BANKERS. bankers, and they may be assured that there will be no failures among them, or at least none worth notice. They are all of them competent to pay their just debts in just money ; but if they are to be compelled to pay their debts in heavy gold, instead of what Lord Goderich calls " worthless rags" in which they were contracted, and if they are also to act as guarantees between the debtor and the creditor interests of the country generally, whilst this enormous operation is in progress, it is by no means improbable that they will yet give Lord Goderich further cause of censure and displeasure. And the Scotch bankers .will give him equal cause, whether they preserve the small notes or not. The unhappy helots and " adscripti gleba" the plun- dered and swindled manufacturers, traders, and farm- ers, who are indebted to the bankers in debts con- tracted in paper money, or in depreciated bullion money, cannot pay such debts in undepreciated bullion money, or in paper convertible into such money. They cannot pay ounces of gold worth twenty bushels of wheat each, in the discharge of debts contracted in " worthless rags," or in ounces of gold worth only Jive bushels of wheat each ! If, then, these unhappy helots cannot pay the bankers in such unjust and plundering money, how are the bankers to pay the public ? Lord Goderich would have done well to have attended to his own business, and to have established just and practi- cable laws in society, before he presumed to censure others for not being able to resist the consequences SCOTCH AND ENGLISH BANKERS. 123 of measures, which they could no more guard against than against the thunderbolts of heaven. Lord Goderich expresses sympathy for the suffer- ings which the poor are exposed to from the failure of bankers. It is strange that he can feel no sym- pathy for the million times greater sufferings which they experience from the misconduct of legislators. If he will take the trouble to calculate, he will find that where the poor man has lost one single pound sterling from the failure of bankers, he has lost one million of pounds sterling, by the want of em- ployment occasioned by the misconduct of legislators ! And from these millions of pounds of losses there is no dividend! The whole is sheer unmitigated loss and ruin ! If the whole of the bankers in England were to fail every year, and if upon each occasion the poor were to sustain the whole loss upon the whole circulation of one pound notes in existence, the sufferings of the poor even then, from the failure of bankers, would not be one-tenth part so great as they now experience every year, under the pressure of Lord Goderich's arbitrary and impracticable laws. The positive loss which the poor sustain, even in the present year, from the want of employ- ment and from deficiency of' ivages, may be esti- mated at full Jlfty millions sterling! In 1816, in 1819, and in 1826, their positive loss in this re- spect was much greater. Even in London, at this moment, the working classes in one single week, sustain more loss from the want of employment than they ever sustained from the failure of bankers, from 124 SCOTCH AND ENGLISH BANKERS. the beginning of the world to this day ! What a perfect absurdity it is to talk of the loss of a pound note or two, now and then, or rather of a shilling or two in the pound upon a one pound note now and then, in the very midst of such enormous losses as these ! And after all, if any weakness has been shown by the English bankers, it has been exhibited princi- pally in London, where the Bank of England notes existed, rather than in the country, where the calum- niated one pound notes existed. It is well known, that the failure of almost all the country bankers, who stopped payment during the late panic, was occasioned directly by the previous failure of the London bankers, with whom they were connected. If those London bankers who failed Jirst, had stood their ground, or even if any other London bankers could have been found, who, during the panic, had possessed courage to take up the country bank accounts, not one in ten of the country bankers who then suspended their payments, would have found it necessary to do so. But what could the country bankers do, when their London connections stopped payment, and no other London connection could be found to take up their bills, even when cash itself was, in many instances, duly provided for them 9 To blame men for suspending payment under these circumstances, is to add mockery to ivrong, insult to injury, and calumny to oppression. It is useless to say more upon this subject. Lord Goderich may be assured, that there is not a coun- SCOTCH AND ENGLISH BANKERS. 125 try banker in England who has not understood his own business, a hundred times over, better than the Government have understood theirs. It may be useful to examine one or two of the errors of the Government. There was but one article in the whole world which ought not to have been considered, in estimating the depreciation of the currency ; and that one article the cunning of the Jews and the learning of the lawyers have in- duced the Government to adopt as its sole mea- sure / Bullion was the only article which had been superseded in its use and demand, which had in fact been placed hors de combat and made a mere drug in society ; and this was the very article, above all others, which the Jews and lawyers fixed upon, wherewith to measure the depreciation of the cur- rency ! In this way the Government was induced to pass Mr. Peel's Bill, the inevitable effect of which is to transfer the whole rental of England into the hands of the monied interest ! The magnitude of this "transfer of property" was carefully concealed for a long time, under pretence that it amounted to " only four per cent. ;" and now when its real magni- tude begins to be known, we are gravely assured that it is too late to retreat! Disgusting it is to reflect, that men who have suffered themselves to be cajoled in this way, should have the confidence to accuse a body of respectable tradesmen of ignorance and incompetence in business ! Let one of these gentlemen, who are so ready to accuse others, en- deavour to borrow only a few pounds of " worthless 126 SCOTCH AND ENGLISH BANKERS. rags" upon bad security, and he will instantly find that the Government may be swindled out of hundreds of millions sterling, with greater facility than the bankers can be deprived of a few dozen of their " worthless rags *." Let us take another instance. There was but one description of men in all England, who ought not to have been consulted, or who ought less than any others to have been consulted, in the inquiries respecting the currency ; and this is the very de- scription of men who have been selected by the ministers, to the exclusion of all others ! The Jews, the brokers, the stock jobbers, the mortgagees, and the bullion dealers, the men technically denomi- nated the monied interest, and as such directly in- terested in doubling the value of money and in halving the value of all other property, these have been the men, to the exclusion of all others, who have been selected by the ministers to give the evi- * It is but a short time ago that nine different deputations from the productive classes were waiting in London at the same time for the purpose of watching the proceedings of these cloud legislators, and of protecting their respective interests from threatened ruin ! Is it not monstrous, that men whose proceed- ings require to he watched in this way, who cannot be trusted for a moment, without the constant superintendence of the people, should have the confidence to accuse others of incapacity in bu- siness ? Lord Goderich is so busy in establishing branch banks said joint stock banks to protect the public against the errors of the bankers, that he never dreams of the possibility of establish- ing a joint stock government to protect the country against his own! It will be well for him, and for his country, if his errors should not force this idea into the heads of millions. SCOTCH AND ENGLISH BANKERS. 127 dence upon which the Bank Reports are founded ! It is no disparagement of the private characters of these persons technically denominated the Jews, or the monied interest, to say, that, like all other men, their opinions are liable to be warped and biassed when their own interests are strongly concerned. Accordingly they have given that kind of advice to the ministers which has had the effect of trebling their own wealth, at the expense of the landowners and productive classes ; it has converted their sixty pounds of paper money consols, into about eighty- five or ninety pounds of heavy gold money consols ! and yet these are the class of men who have per- suaded the ministers, that the country bankers are so much interested in the issue of paper money, that they ought not to be consulted upon the subject ! Now let us inquire into what this question of in- terest and private advantage in the country bankers really amounts to. Mr. Goulburn himself states the circulation of country one pound notes to be only two millions sterling, which gives four thou- sand pounds each as the average circulation of the five hundred country banks actually issuing them. At the present value of money, in its interest or use, it is not possible for each bank to make a greater profit than one per cent, per annum, or just forty pounds a year, upon four thousand pounds of circulation, after deducting two per cent, per annum for the unavoidable expenses attending it ! How ab- surd it is to imagine, that a profit of this kind, or even of ten times its amount, can by any possibility be an object to any country bank in existence J The 128 SCOTCH AND ENGLISH BANKERS. country bankers must not only be " hucksters and grocers? as Lord Liverpool calls them, but they must also be literally beggars and paupers before they can possibly be influenced by a profit of forty pounds a year! No, no, it is not the interest which the country bankers have in the circulation of " worthless rags" which renders their counsel obnoxious to the Jews, but it is the interest which they have in the pros- perity of the country, in seeing the farmers, the manufacturers, the traders, and the landowners, flou- rish, and thereby inevitably flourishing themselves ; this is the interest and the private advantage which renders the country bankers obnoxious to the Jews, in the same manner as the physician interested in the life of the patient is obnoxious to the undertaker interested in his death ! In short, every thing is delusive and erroneous which comes from the ministers on the subjects of banking and currency. There are no possible terms too strong to describe the gross manner in which they have suffered themselves to be deluded in the management of these great interests ; and yet they have the presumption to accuse others of ignorance and incapacity, and not understanding their own business ! It has been observed before, that the term " worthless rags" was invented by Lord Goderich. But Mr. Cobbett has here again the merit of in- venting the reasoning on which it is founded. It is not a correct term, nor is it correct reasoning, when applied to the paper money, as it has existed in SCOTCH AND ENGLISH BANKERS. 129 England during the existence of the present genera- tion of men. The paper money is worth rather more than the mere paper on which promises to pay are written, in the same way a bond or a mortgage is worth more than the parchment on which it is written. These kinds of instruments command the property and the " goods and chattels " of the issuers, and in this light they are certainly better than mere " worthless rags." They will pay taxes, and debts, and contracts, and purchase food and clothing, which mere rags will not do. Undoubt- edly the paper money is, in one sense, a " worthless rag ;" and so is also a death warrant. But this notable discovery gives but little comfort to the poor wretch who receives it. Would the " execution done upon the criminal" be less painful if the death warrant should be stamped upon solid gold, instead of being written on a worthless rag 9 Even Lord Goderich will not contend so. How then can the payment of taxes and of debts be less burthensome because this deluded nation is compelled to pay them in heavy gold, instead of being permitted, as heretofore, to pay them in worthless rags? The idea is monstrous. It is not the material of which the instrument is formed, but the Junctions which it performs, which are to be considered ! The rest is a mere petty-fogging consideration. One instrument destroys human life, and hurries its victim to a dreadful end. The other breaks open prison doors, and sets the captive free ; and feeds the hungry and clothes the naked, and saves families from 130 SCOTCH AND ENGLISH BANKERS. ruin ! Are functions of this nature the less impor- tant or the less useful, because the instrument which works them is cheap and easily obtained ? Are functions of this nature the more important or the more useful, because the instrument which works them is dear and difficult to be obtained? No one can really think so. Was it wise then, in a minister of state, to hold up instruments of this kind to public odium ? Instruments, too, in the existence of which, it may be truly said, that the safety of the throne and the welfare of the people, and his own power, and his property, and his very bread itself, are essentially compromised and mixed up? Lord Goderich will live to regret the hour when he first lent himself to sophistry like this. But Lord Goderich would " put a bit of gold in every poor mans pocket," it seems ! Generous man ! But he would make him pay through the nose in bread and bacon to get it / Of what use then is the " bit of gold ?" The " poor man" does not want the bit of gold for its own sake. He only wants it in order to buy with it bread and bacon for his family, and beer for the comfort of his exhausted frame. How then is he to get any good from the bit of gold, if he is only to obtain it by first giving double the quantity of his labour, and of his bread and bacon, in exchange for it ? Of what use is it to him, if he is to be starved to death in obtaining it ? Or if, before he can obtain it, he is to be driven out of his employment, and beaten down in his wages, and crippled and humbled in his means of maintenance, SCOTCH AND ENGLISH BANKERS. 131 and in all his rights, interests, and feelings ? If Lord Goderich had really intended to do the " poor man" a service, he would have taken care that the " poor man" should first possess the means of ob- taining the " bit of gold' as cheaply and as readily and as certainly as he has hitherto been in the habit of obtaining the bit of paper. He would first have guaranteed to him the same facility of paying taxes, the same state of employment, the same amount of wages, and the same amount of the humble com- forts of his life, as the bit of paper has hitherto given him. Lord Goderich might then have safely gratified his fancy of " putting a bit of gold in every poor man's pocket," without first compelling the poor creatures to buy it out of the bread of their families. But he acts upon the supposition that gold is of itself the only real value in existence, and that bread and cheese, and bacon and beer, and all the other necessaries which support mans life, are only valuable as they contribute to the important object of buying gold ! Lord Goderich knows very well that hitherto the poor have derived but little benefit from his abortive humanity. Three times over he has been compelled to abandon his golden fancy, and to bundle out his bales of " worthless rags" in order to save the poor from death, and the rich from ruin ! He ought by this time to have found out, that it is not his duty to " put a bit of gold in every poor man's pocket ;" but that it is his duty to put " a bit of bacon and a pot of beer, on every poor man's table every day in the year." If K 2 132 SCOTCH AND ENGLISH BANKERS. Lord Godericli will but do this, which he ought to do in a country like England (or otherwise never to think of being a minister), if he will but do this, he will find that the " poor" will be perfectly con- tented with their lot, and that they will not care a rusk whether they obtain such just and reasonable comforts through the means of a " bit of gold' 9 or of a " worthless rag" This may be a considera- tion of importance to " lacltadaisiacal" gentlemen and card-playing ladies, but Lord Goderich may make himself quite certain that it is no consideration at all with the "poor" What can Lord Goderich have got into his head, when he asserts that the depreciation of the cur- rency commenced in 1808 and ended in 1816? Surely he is not still dreaming about the exploded nonsense which measured the depreciation of the currency by the price of gold? His great teacher, Mr. Cobbett, has crushed this doctrine to atoms over and over again. If Lord Goderich is deter- mined to listen to Mr. Cobbett only when he is wrong, and not to hear him when he is right, why has he not listened to others, who have again and again proved to him, that the price of gold was no guide to the depreciation of the currency ; and that the real depreciation of the currency, and of gold itself, was full fifty per cent, in 1797; in conse- quence of which, and of which alone, the pay of the soldiers and of the sailors was about doubled in that year ! Instead of the depreciation of the currency commencing with 1808, and ending in 1816, every SCOTCH AND ENGLISH BANKERS. 133 man of business in the kingdom knows well, that the depreciation in the years from 1800 to 1808, was literally greater than it was in the years from 1808 to 1816. During the former period, the paper currency had, as it were, its full swing. It was unchecked in any way. But in 1810, the Bullion Report strung up the value of currency full thirty per cent. ; and although the necessities of the Go- vernment compelled it afterwards to abandon the recommendations of the Bullion Report, yet in 1814 and 1815 it is well known that the currency was again raised in value full thirty per cent, by the circumstances consequent upon the two occupations of Paris. In 1810, the Bank of England, as is well known, followed up the recommendations of the Bullion Report, and knocked off* at once the dis- count of many millions of accommodation bills ^ which it had been in the habit of discounting for many years ! The great banking house of Kensing- ton, Styan, and Adams, and several other eminent London banking houses, were crushed by this opera- tion. The well-known failures at Boston, and in the corn trade generally, were directly occasioned by it. A state of alarm approaching that of the late panic was spread through the whole country. How can Lord Goderich pretend that the state of the cur- rency was more depreciated in this state of things than in the preceding years, from 1797 to 1808, when no such operations were going on ? So also in the years 1814 and 1815, the measures then adopted by the Bank of England, and by other bankers in their own 134 SCOTCH AND ENGLISH BANKERS. defence, scattered terror through the whole country, and the well-known contraction of the currency in those two years, produced a reduction of prices and a mass of insolvency, which was scarcely excelled by any produced in 1826. When the currency was thus raised in value full thirty per cent, at two dif- ferent periods between the years 1808 and 1816, how can Lord Goderich pretend that its deprecia- tion was greater in those years than it was in the years from 1797 to 1808, during which period the paper currency was unchecked and unlimited, and the rents of land, and the wages of labour, and the pay of the Government dependents, and the prices of all property generally, were fully and permanently doubled? It is strange that any man can be found to hold doctrines of this nature, and more particularly so after the experience of the year 1825, during which period it is well known that the price of gold was at par with paper, and yet that the depreciation of the currency was full fifty per cent., or very nearly as great as in any year during the war. If Lord Goderich will but break out of the cobwebs, in which the bullion brokers and exchange brokers have spun him up, he will see at once, that bullion itself was depreciated by the measures of the Government, full one half, or fifty per cent, on the twenty years average of the war ; and that the general currency of the country was depreciated in rather a greater degree; in fact, in the very same degree as the prices of bullion, on that average, exceeded the price SCOTCH AND ENGLISH BANKERS. 135 of paper, which was about ten per cent. The bul- lion pound sterling, during the war, was worth about I0s. 9 and the paper pound sterling about 9*. of the ancient money which existed in the country before the year ] 793. The paper money, therefore, was not quite a " worthless rag." It was worth 9$. in the pound, and the bullion money itself was worth only 10$. in the pound, on a twenty years average during the war. If Lord Goderich will take the trouble to com- pare the price of an ounce of bullion on a twenty years average during the war, with that of bread, or of labour, or of rent, or of all commodities and va- lues generally, he will find at once, that the value of the ounce of bullion was reduced full one half, during the period when the use of bullion in coins was superseded by the paper standard. If he will take the trouble to look a little further, he will also find that 1047,000,000/. sterling of the national debt, were borrowed during this period of depreciated currency, or within a year or two of it; that upwards of two hundred millions of this new debt have been redeemed by the Sinking Fund, and that about 800,000,000/. sterling of it yet remain unpaid, more than double the amount of the whole debt existing before the war having since been redeemed by the Sinking Fund ! Lord Goderich is therefore putting a pretty profit into the pockets of the fundowners, at the expense of the landowners and of the public at large. He contracts a net balance of eight hundred millions of debt in cheap money, worth only one half 136 SCOTCH AND ENGLISH BANKERS. of the ancient money. He receives about Jive hun- dred millions for this debt of eight hundred millions, being at the rate of sixty to the 100/. of consols. This jive hundred millions, thus received by the na- tion, could not possibly be worth more than one half, or about two hundred andjlfty millions of the ancient money of the country ; and yet the nation is now coolly compelled to repay very nearly the full sum of eight hundred millions of the ancient money of the country, and indeed of money which is in the process of being strung up considerably beyond the ancient value ! And this is an operation which Lord Goderich seems still to consider as a mere question Q{ four per cent. ! Eight hundred millions sterling are given in payment, where only two hundred and Jifty millions of the present money have been really received; and Lord Goderich and his noble c'om- panions can see no more difficulty or injustice in this operation, than in scattering a few extra half crowns over a card table ! One of the greatest evils that can possibly exist in a community, is to have its legislators living in the clouds, that is to say, so far removed in rank, habits, and wealth, from all the wants, and modes, and means of the public, as to have no clear and de- finite views respecting them. These kind of legis- lators may do very well in common times, when dear-bought experience has long laid down and marked out the measures necessary to the public welfare. But when new, unknown, and undefined measures become necessary, then an absolute and SCOTCH AND ENGLISH BANKERS. 137 close contact with men and things is required, in order to enable legislators to meet the emergency. Mr. Burke expresses this in better words, when he applies the same sentiment to men " conversant in office" as well as to men born and bred up among the clouds. " But it may be truly said," says he, " that men conversant in office are rarely minds of remarkable enlargement; their habits of office are apt to give them a turn to think the substance of business not to be much more material than the forms in which it is transacted ; and therefore, men conversant in office do admirably well as long as things go on in their common order ; but when the high roads are broken up and the waters out, when a new and troubled scene is opened, and the^/z/e affords no precedent, then it is that a greater know- ledge of mankind, and a far more extensive compre- hension of things, is requisite, than ever office gave, or than ever office can give !" Now this is just the situation of our unhappy country. The " men of office" have considered " the substance of business" not to be so material as " the form in which it is transacted ;" they have considered the restoration of an ancient standard as more important than the preservation of the national welfare ; as if the public were made for the standard, and not the standard for the public ! In the mean while, they have altogether omitted to notice the changes which time, " the great innovator," has produced, and which have literally rendered the restoration of the ancient standard impracticable. 138 SCOTCH AND ENGLISH BANKERS. They keep faith with insensible masses of metal ; but they violate all faith with mans life, and fash, and blood. By errors of this kind, our legislators have at last brought us into a perfect chaos of diffi- culties, into a state of things, where " the high roads are" indeed, broken up, and the waters out, and a new and troubled scene is opened, and thejile affords no precedent," and yet still they keep blun- dering on. It would not be possible for them to act as they do, if they knew any thing at all of the real world in which they live. But they look down upon this earth from the clouds, through the mists and illusions with which distance environs it, and every thing becomes distorted and discoloured in their eyes. Hence the preposterous and impracti- cable measures which we have seen adopted during the last fourteen years. The abolition of the one pound notes is of itself a tremendous operation, and sufficiently proves, that the parties who have resolved upon it, without in- quiry, can know only about as much of the affairs of this earth as they know of those of the moon. The small notes, in their eyes, appear only as little contemptible objects, which are important only to the little interests of the little individuals who issue them. To " extinguish" these little individuals altogether, has been assumed by Lords Liverpool and Goderich to be " desirable ;" and therefore it is no wonder that the " extinguishment" of their " worthless rags" should at once be decided upon. If these noble lords had had the advantage of SCOTCH AND ENGLISH BANKERS. 139 spending a few months in the office of a country banker, they would have seen things in a different light. When they ceased to look down upon this earth from the clouds, through the mists and fogs which surround rank, wealth, and station, and when they came to examine things closely with their eyes, and to touch them with their hands, and to watch them in their nature and operation, they would have found them to be altogether different from what they at first apprehended. The one pound notes, instead of appearing " worthless rags" would have been found out to be vital in- struments of immense importance, feeding and clothing the population, substantiating the division of labour, and equalizing the demand for labour, breaking up the monopolies of capital and of trade, appearing everywhere as the wants of industry re- quire, and disappearing again as soon as ever those wants are supplied, working everywhere the great duties of production and consumption throughout the country. Noble lords would have been rather surprised to see these humble objects of their aris- tocratical contempt, growing up everywhere like grass under the cow's mouth, enabling the bankers to render accommodation to the public, which they otherwise could not give, smoothing the paths of industry, converting sellers of labour into buyers of labour, diminishing the profits of capital, and in- creasing the profits of labour, checking the growth of enormous fortunes, and facilitating the growth of small fortunes, supplying everywhere the means of 140 SCOTCH AND ENGLISH BANKERS. continuing the uniform employment of industry, under all the fluctuations and uncertainties to which that employment is exposed. And the calumniated country bankers too, instead of appearing such very little, useless, contemptible, and noxious individuals as noble lords suppose, would have been found to be prudent and respectable tradesmen, of considerable capital, carrying on their business with much skill and industry and little gain, interposing their gua- rantee between the debtor and creditor interests of the nation, gathering up the circulating medium from stagnant masses, and distributing It out from seven hundred centres into vital uses, and in short, exercising functions which in point of utility and importance in the social system, certainly need not shrink from comparison with any which noble lords themselves can exercise. The country banks, indeed, would have been found to be great arteries of the circulating system, gathering up the vital fluid wherever it is In excess, and delivering it out wherever it is In deficiency, and in fact, discharging duties which, in a state of society like ours, are quite as necessary to the support of the political, body, as those of the natural arteries are to that of the animal body. These are the vital establishments which Lord Goderich talks of " extinguishing" and which he evidently considers as a kind of noxious excre- scences in the social system, establishments which have grown up with the present frame and structure of society, which have been the creation of its SCOTCH AND ENGLISH BANKERS. 141 wants and uses, which are inwoven with its very elements, and which cannot be " extinguished" without endangering its total dissolution ! Equally absurd, but not more so, would be the conduct of an empiric, who having himself pro- duced syncope in his unhappy patient by opening an artery in each arm, should then coolly proceed to rectify the consequence of his errors, by tearing out or otherwise " extinguishing" the whole arte- rial system ! A few years ago, an Act of Parliament was passed to prohibit the payment of labour in provisions. Another Act has since been passed to prohibit the payment of labour in cask notes. We have a third Act in force, which renders almost impossible the payment of labour in coins; and thus with our Corn Laws to diminish the number of loaves, and our Emigration Laws to diminish the number of mouths, we have a system of legislation before us, which it is probable that the history of the world cannot parallel ! When the Sinking Fund is considered in the light above referred to, as having redeemed the na- tional debt to the extent of double its whole amount before the late war, it appears to be not quite so absurd an establishment as it may now suit the in- terest of Lord Grenville to represent it. The Sink- ing Fund was wise in its commencement, and bene- ficial in its progress, from the very first to the very last. Mr. Pitt established it, as a real surplus of the national revenue, appropriated to the redemp- 142 SCOTCH AND ENGLISH BANKERS. tion of the national debt. The stern necessities of the nation shortly afterwards compelled Mr. Pitt either to abandon the Sinking Fund, and to seize upon the taxes thus appropriated, or otherwise to borrow an equal amount of additional money an- nually, wherewith to support the national expendi- ture, until the national exigencies should have been overcome. Mr. Pitt wisely chose the latter course. By so doing he accomplished two objects of great importance, which have since been overlooked, and partly counteracted by the ignorance and incompe- tence or worse quality of his successors. In the first place he facilitated the conversion of the an- cient metallic debt into the new paper debt, by pro- viding paper money, the produce of paper taxation, wherewith to buy up the ancient metallic debt from such parties as might choose to sell it; whilst, at the same time, he provided for the national expendi- ture by borrowing a new paper debt to an equal amount. The metallic debt was thus in a great degree converted into a paper debt, an object of the first importance to be accomplished. In the second place, he preserved a constantly growing fund, the real produce of annual taxation, which fund he cal- culated upon having at full liberty to act in the real reduction of the national debt, as soon as ever the immediate exigencies of the nation should have been overcome. He calculated rightly, that on the return of peace he should have nothing more to do but to cease borrowing new debt, in the proportion that he should be enabled to reduce the national SCOTCH AND ENGLISH BANKERS. 143 expenditure; and thus the whole produce of the taxes forming the Sinking Fund, would have been left in full operation upon the debt. The produce of these taxes has since amounted to near twenty millions sterling per annum, the whole of which would, for the last fourteen years, have been applicable to its object, if Mr. Pit fs plans had been pursued ! If Mr. Pitt had lived, every thing would have been right in England. He would never have suffered an object to be attempted in 1819 which was found impracticable in 1797 ! He would never have suffered the Government to act upon the ex- traordinary principle, that it is easier to pay debts than to borrow them ! He would have recollected that the paper system was necessary to enable him to borrow one thousand millions sterling ; and he would never have suffered the Jews and jobbers to whisper in his ear, that it was not at all necessary to enable him to repay it ! He would never have directed a suicidal hand against the country bank- ers. He would have preserved the paper system, with such regulations upon the Bank of England as experience might have suggested, and in so do- ing he would have been enabled to preserve the Sinking Fund in such a state, as would certainly by this time have reduced the national debt to its level before the war, without the slightest difficulty or distress. This has been sufficiently shown in the paper entitled, " Things as they might have been." No other plan could have been devised, which would have preserved such a mass of taxation ap- 144 SCOTCH AND ENGLISH BANKERS. plicable to such a great and necessary purpose, with so little injury to the public interest, and so little obnoxious to the public prejudice. The mis- conduct of Mr. Pitt's successors, and nothing else, has prevented the realization of his wise and judi- cious plans. That misconduct has rendered the exigencies of the nation greater in time of peace ', than during the worst period of the late war ! It has rendered taxation positively unbearable, and has consequently compelled the Government, from time to time, to seize first upon one part, and then upon another part of the Sinking Fund, until at last they have been compelled to seize upon the whole. Having been driven to these necessities by their own misconduct, and by that alone, they now turn round, and to cloak their own faults they ca- lumniate the memory of Mr. Pitt, and they dare to denounce his measures as futile and absurd ! Well might that great man express sorrow for his country in his dying hour. He saw that he had left a wea- pon behind him which his companions were not competent to wield. He left them a weapon, pow- erful indeed to destroy their enemies, but in weak or corrupt hands equally powerful to destroy his country. That weapon was the paper currency. Rightly managed, it was powerful to all good, and utterly impotent to all evil. It did no injustice to any class of the community. It merely threw upon the creditor interest of the country, which had the greatest stake in the success of the war, the great- est burthen in supporting the war. It enabled us SCOTCH AND ENGLISH BANKERS. 145 to crush our enemies and to support* our friends. It enabled us to establish a Sinking Fund, which would have melted away the national debt quite as fast as it arose. But in destroying the paper cur- rency the successors of Mr. Pitt have destroyed the Sinking Fund ; and instead of redeeming the na- tional debt, they have made it convertible into solid gold, and given a double and trebled pressure to its enormous burthen* ! * It is remarkable, that this destructive measure was adopted in Parliament, not only without any solicitations on the part of the public, but positively in opposition to the voice of the mer- cantile classes, us expressed in petitions from the merchants of London, Liverpool, and other places. It was literally forced upon the public by a knot of Jews and lawyers, who had the ad- dress to satisfy the landowners, under the assurance that it would reduce the prices of property only four per cent. So far from the public having any interest in the question, it is well known that the public very generally preferred the " worthless rags" to the sovereigns, and that they literally and generally refused to receive the latter, until the state of the exchanges created a profit in sending gold abroad! When this profit arose, it is no wonder that sovereigns should have been preferred, and more particu- larly when it was found that Government had made all debts legally payable in sovereigns, without taking the precaution of providing more than a hundredth part of the quantity necessary ! Nor was it any wonder that the public confidence in " worthless rags" should at last have been shaken, when the edicts of Mr. Cobbett were registered in Parliament, and his anathemas upon the paper system were sanctioned and adopted by the ministers of the King ! Some intimate friends of Mr. Pitt have asserted, that they knew it was Mr. Pitt's intention to have rendered the paper system permanent ; if then Mr. Pitt thought such a mea- L 146 SCOTCH AND ENGLISH BANKERS. After all the exertions which the nation had made during the war, and after it had contracted such prodigious burthens in its defence, one would have thought that the idea of voluntarily adding to those burthens would never have entered into any human head. The idea of " making a release" as the Holy Scriptures term it, was by no means an impro- bable idea to have been entertained ; nor could such an idea, if acted upon to its fullest extent, have produced one-tenth part of the wide havoc and the wasting misery which the mere attempt to double the national burthens has already occasioned. In the present days, it seems that all our sympathies are with those who have claims to receive, and not with those who have burthens to bear. A boule- versement would appear to have taken place, not only in the long established principles of political economy, but also in the natural sympathies and affections of the human mind. The " auri sacra fames" the cursed thirst of gold, which Lord Byron calls " the beggars vice" is now the " ruling pas- sion" in England. To this fell spirit, every thing is made to yield. Truth and reason, the national happiness, the national honour, the cries of violated justice, and of outraged humanity, all are disre- garded. Of what consequence are they, when the u golden opportunity" occurs to take advantage of sure necessary so early as 1805, how much more necessary has it become since ? SCOTCH AND ENGLISH BANKERS. 147 a Jewish bond, and exact the payment of " worth- less " obligations in heavy gold 9 But here, as in all other cases, " honesty" is found to be " the best policy" at last. " Even- handed justice returns our poisoned chalice to our own lips." The debtor is sacrificed. But in the debtor s ruin the creditor finds his own ! The land- lord destroys the tenant, and is himself destroyed by the mortgagee. The fundowner oppresses the country, and compels the payment of two bushels of wheat instead of one. The country submits to the plunder for a while, but, goaded by despair, at last pulls the taxes from under the fundowner's feet. All classes are thus taught by painful experience, that justice is the true interest of men ; and they learn to estimate the wisdom of that eternal princi- ple, " Thou shalt do unto others as thou would est be done by !" When the advocates of the present money are driven into a corner, it is by no means unusual to hear them say that the public faith was pledged for the restoration of the ancient standard money on the return of peace. This is totally incorrect. No pledge of the kind was ever given, expressed or implied. On the contrary, about ten or twelve implied pledges have been given that it should never be restored at all, unless it was perfectly convenient to the nation to restore it. Ten or twelve Acts of Parliament were passed from time to time, postponing the payment in specie on the L2 148 SCOTCH AND ENGLISH BANKERS. ground of national " expediency" and of course an implied pledge may be said to be given in those acts, that it should be again and again postponed so long as the national " expediency" should re- quire. To suppose that these acts of parliament, which have thus postponed the payment in specie from time to time, could carry a pledge that it should be restored on the return of peace, is to sup- pose that the acts of parliament which continue the exclusive privileges of the Bank of England from time to time are passed unjustly, because each act, in continuing them to a certain period, may be said, in this light, to point out a time beyond which they shall not be continued. Lord Liverpool himself, when he brought forward the Act of 1819 in the House of Lords, did not represent the ancient standard of value as in any way necessary to public faith, or public justice ; but he spoke of it as the " best and most convenient standard" that could possibly be selected, in the event of Parliament deciding " that the currency of the country should again be subjected to a state of regulation by a metallic standard of value." It is therefore evident that no public faith was ever pledged to the resto- ration of the ancient standard of value, but that the nation is left at full liberty to adopt any standard which may be found just and beneficial. Mr. Cobbett has often asserted (but never proved, and never attempted to prove) that the paper cur- rency contained within itself the seeds of its own SCOTCH AND ENGLISH BANKERS. 149 destruction, and that it must of necessity have ex- ploded some time, and have destroyed the Govern- ment in its explosion. All this is perfectly erro- neous. It is the subjecting of the paper currency to an unjust and impracticable test which constitutes its sole danger. The paper currency might have been preserved for ever, upon any given level of value which might have been deemed just and beneficial ; or it might at any time have been made safely convertible into a just and practicable metallic standard of value. To limit and obligate the Bank of England to an issue of thirty millions of paper legal tenders, and to make the country bank notes payable in such legal tenders, would prevent the possibility of the currency being in excess, or of its depreciation be- ing carried farther than justice and the national welfare require. Under a just and well-regulated paper currency, no fluctuations whatever could have taken place. The prices of wheat would have been preserved for ever at Ss. or 10s. per bushel, and these prices would not have varied in any material degree, even in years of acknowledged scarcity, because the stocks of agricultural produce, being kept up at their ancient amount, would in such years have been brought forward to preserve an equalization of prices. In years of scarcity, the stocks of grain would have been diminished, and in years of plenty they would have been increased, and thus one 150 SCOTCH AND ENGLISH BANKERS. general and uniform level of prices would have been constantly preserved. No want of employment could have existed. No deficiency of abundant wages could have existed. No deficiency of just and reasonable profits in any branch of industry could have existed. The taxes, debts, and obliga- tions of the country would have borne their proper proportion to the means of the country, and after receiving all that was their due, they would have left in the hands of the productive classes a suffi- cient proportion of their productions to gratify their own wants, as well as those of their labourers and workmen. So also with respect to a just and practicable me- tallic standard. Such a standard would have pre- served the prices of property and labour at a just and beneficial level, and would have secured to the creditor interest of the country the whole of its just and equitable values, without trenching upon those of the debtor interest. It would have given to the taxes, rents, and credits of the Government, and of individuals, the very same amount of commodities and labour as the country contracted to give ; and it would at the same time have left in the hands of the tax-payers, rent-payers, and debt-payers, the very same proportion of their productions and commodities as they possessed when their different obligations were entered into. No evil could have arisen from fluc- tuations such as we now experience. It is possible, that, occasionally, the public credit of the country SCOTCH AND ENGLISH BANKERS. 151 might be pushed a little farther than usual ; the in- struments of credit, payable in such a just metallic standard, might possibly be increased a little faster than was necessary to keep up a healthy and bene- ficial level of prices. In this way, it may be granted for the sake of argument, that some casual elevations of general prices might perhaps exist occasionally. But it is certain that such elevations would be minute and temporary, and attended with no difficulty or embarrassment. Because the pres- sure of the standard would pull them down the very moment they started from the ancient level, and would thus reduce such temporary elevations, before they had had time to act in producing cor- respondent elevations in the taxes, debts, wages, and contracts of the country. The elevations would be temporary, arising from a permanent level, suffi- ciently high of itself to secure the national welfare, and therefore they would be attended with no mis- chief. As things now are, the elevations are indeed temporary, but they are gleams of sunshine amid the storm, they arise from a permanent level which is not sufficiently high to secure the national wel- fare. They arise from a level, under which the industry of the country is suffocated; under which the debtor interest of the country cannot fulfil its engagements. This is the reason why the present depression of general prices is ruinous. It brings the industry of the country within the gripe of the vested interests. If the present depression of prices was merely a depression from an elevation higher 152 SCOTCH AND ENGLISH BANKERS'. than necessary, into a healthy level, it would do no harm. But it is a depression from a healthy eleva- tion into a level lower than is healthy or necessary, or than is consistent with the existing relations of society, and therefore it produces the misery and the danger which we now see. No misery and no danger could arise if a just metallic standard were adopted, or if the paper system was restored under such obligations and limitations as common sense would suggest. It is ridiculous to suppose that a paper system would of itself some time or other blow up. It would last for a thousand years as well as for one year, and would preserve a greater steadi- ness and regularity of prices than even a just metal- lic standard would preserve. The fate of paper money in other countries is no guide to us. It never existed in any other country as it has existed with us. The French Government issued 1 800,000, OOO/. sterling of assignats forcibly in six years ! These represented nothing. The English bank notes never exceeded 30,000,000/., and represented the capital of the Bank of England, guaranteed by the annual produce of the national taxation, which never failed, and never could fail \ so long as the Bank Restriction Act continued. There is no comparison that can be drawn between such different paper systems as these. They resemble each other only in name. The English paper system might have lasted for ever ; and for ever have secured the just rights and interests of all classes of the com- munity. SCOTCH AND ENGLISH BANKERS. 153 We have now, every day, some new confession that a fatal error has been committed by the Go- vernment in adopting this Jewish theory of Mr. Ricardo, which measured the depreciation of the currency by the price of gold. Mr Baring, Mr. Banks, Sir Francis Burdett, and Sir James Graham, have all acknowledged this fully. Why cannot Lord Goderich make the discovery? Even Mr. Hus- kisson begins now to acknowledge that all the evils which the country has sustained have been entirely owing to the Act of 1819, or to what he curiously enough calls the Act of 1797. He no longer talks about "four per cent." and about the price of gold being the measure of the depreciation of the cur- rency, but he candidly confesses in his speech in Parliament on the 15th inst. that " the Restriction in the year 1797, which continued for a quarter of a century, had been the cause of producing more calamitous consequences, more confusion, more moral and political evils, than any other measure Parliament ever sanctioned." It is well known that none of these <( calamitous consequences" occurred during the war. It is not therefore the Act of 1797, but the Act of 1819, which has occasioned them. It is true, that if the Act of 1797 had never been passed, the Act of 1819 could never have been passed ; and by special pleading of this kind, it is certainly possible to attach blame to the Act of 1797. But upon the same principle the builder of a house may be accused of burning it down, because if he had not built it, the incendiary could not have 154 SCOTCH AND ENGLISH BANKERS. burnt it. There is no reasoning with sophistry of this kind*. The Act of 1797 did not at all render * Nothing can be more absurd than this attempt to blame the Act of 17^7 in stead of that of 1819. The former was in all respects beneficial. The latter is in all respects injurious. The former improved agriculture and occasioned new inclosures all over the country. The latter has injured agriculture and put a total stop to all inclosures and to all improvements. The former increased agricultural productions of all kinds. The latter diminishes them daily, and is certain in the end to produce a famine, as was shown in a former paper. When this certain famine comes, it is right that the proper horse should be saddled with the burthen, and that the Act of 1797 should be held totally harmless in the national ruin. The Act of 1797> by encouraging the productive classes, placed a strong ground under the feet of the nation. But that of 1819 has weakened every element of the national strength, and has everywhere converted the tillers of the earth into builders of houses, the producers of food for the people into producers of luxu- ries for the Jews, who thus obtain a temporary "prosperity" until the agricultural stocks are consumed; and then, as Mr. Malthus observes, " gigantic inevitable famine must follow, and with one stroke at once level the population to the means of existence." Beyond a doubt Mr. Malthus will agree, that whether the famine is occasioned by increasing the number of mouths, or by di- minishing the number of loaves, will make very little difference in its tendency to " level the population to the means of exist- ence." This Rev. Gentleman has certainly committed a great error, which he does not seem very forward to acknowledge. He has considered that it is proper to place a " moral restraint" upon the breed of men, when their numbers appear too great for the existing quantity of food. Now one would think that a bet- ter way of " levelling the population to the means of subsist- ence," would be to increase the quantity of food ! To make just and judicious laws in society, to promote the cultivation of the earth, to encourage the growth of manufactures, and SCOTCH AND ENGLISH BANKERS. 155 necessary or obligatory the Act of 1819. This latter Act had not even the pretence of national ex- pediency to justify it. It was a measure which in- volved a thousand times the wrong, cruelty, in- justice, and danger, which the Act of 1797 in- volved ; and after all, it was a gratuitous and un- called for sacrifice of the agriculture, manufactures, and commerce of the country, at the shrine of the to increase the breed of cattle and sheep, which would certainly be quite as easy as to dimmish the breed of men! If this learned divine had studied the great book of life, instead of bewildering 1 himself in the books of colleges and cloisters, he would probably have found out that Divine Providence has done nothing in vain, but that whenever it has made one mouth, it has taken the pre- caution of making two hands wherewith to feed it ! And that every pair of honest hands in this kingdom, whilst in life and health and manhood's prime, is fully competent to produce food and shelter every year sufficient to maintain four or five families in comfort and comparative affluence, provided only that the said hands be not crippled by unjust and injudicious laws. Sooner or later, famine of a most awful kind is certain, if the Act of 1819 is persevered in. The great feature of the Act of 1797 was the number of new inclosures, that of the Act of 1819 is the number of new houses; the one clearly demonstrating an increase of food, the other reversing this part of the subject, but showing equally clearly an increase of population ! When the famine comes, inte- rested men will be certain to ascribe it to the paper system ; but it is the gold system which produces all the mischief, and which is at this moment doing more injury to the country, producing more " calamitous consequences" in one single year, than the paper system ever produced, or ever could produce. Even the gold system would have done no harm, or at most but very little, if the parties adopting it had thought proper to give the nation a just and equitable and practicable gold standard. 156 SCOTCH AND ENGLISH BANKERS. monied interest. It is the Act of 1819 then, which has produced the " calamitous consequences" which Mr. Huskisson deplores. These " consequences" have all occurred since the peace, whilst the Go- vernment have been engaged in the attempt to force back the currency into its ancient state, without forcing back the debts, taxes, contracts, and obligations of the country into their ancient state at the same time. It is impossible to believe that an addition of only four per cent, to the national bur- thens, or even of ten or twenty per cent., can have done all the mischief to which Mr. Huskisson al- ludes. The country could well have overgot an ad- dition of this amount to its burthens, however un- just and fraudulent it might be. It is the addition of cent, per cent, to its burthens which the nation cannot bear. It is the reducing of general prices to the ancient level, which is a full reduction of fifty per cent, below the war level. This reduction ofjifty per cent, in general prices makes an increase of cent, per cent, in general burthens. It fully dou- bles the real burthen and the real value of every tax, debt, and monied obligation in the kingdom ! Mr. Huskisson may therefore be now said to ac- knowledge that this is the enormous addition which the Act of 1819 is making to the national bur- thens. It is no wonder then, that he should speak of " calamitous consequences," and of " confusion," and of " moral and political evils," which have re- sulted from such a tremendous operation as this. It is no wonder that he should speak also of the SCOTCH AND ENGLISH BANKERS. 157 " alarm which he cannot help feeling at the pros- pect of future disquietude '." It would be strange, in- deed, if he did not feel " alarm.'" He has placed the nation upon ground which may give way under her feet at a moment's notice, ancj. precipitate her into a frightful abyss of misery. He has subjected all the obligations of the country to be discharged in a standard which cannot possibly be substantiated, and which, in fact, is only prevented from crushing society from day to day., by the continual " tamper- ings with the currency," which the Government is, at this moment, compelled to have recourse to ! Let the Government cease those " tamperings" but for a moment, let them repay the Bank of England the amount of their circulation which is advanced on the Government debt, and the whole circulating system would tumble over their heads in an in- stant! Mr. Huskisson's dreaded state of " barter" would come upon them in a moment. We are thus living on from day to day in a state of constant alarm, whilst dangers and difficulties are accumu- lating before us, behind us, and around us ! What reparation can Mr. Huskisson make to his country for placing her in such a frightful position as this ? He has done more than any other man in this work of havoc, misery, and danger. He must have a heart but little subject to human sympathies, if he does not, at this moment, labour under the bitterest feelings of regret for the past, and of fear and horror for the future. Mr. Huskisson seems to have understood this sub- 158 SCOTCH AND ENGLISH BANKERS. ject in his youth, and to have forgotten it in his ma- ture years. A second youth seems now to have come upon him, for it is evident that he under- stands it again. In his pamphlet " On the Depre- ciation of the Currency" published in 1810, at p. 7 of the preface, he very properly observes, that " The experience of our own, as well as of all other countries, has placed beyond the reach of contro- versy the proposition, that if one part of the cur- rency of a country (provided such currency be made either directly or virtually a legal tender ac- cording to its denomination) be depreciated, the whole of that currency, whether paper or coin, must be equally depreciated." How Mr. Huskisson could bring his mind afterwards to neglect this great truth, and to consider that the gold coins during the war were not equally depreciated with the paper, but that the casual differences of price between them constituted the true measure of the depreciation of the currency, it is not easy now to determine. It is not right to surmise that he might possibly have become a proprietor of consols, or perhaps have found a different doctrine contagious under the at- mosphere of the throne. It is not just to estimate the conduct of public men in this way, and " to follow still the changes of the moon with fresh sus- picions." It is sufficient for us to know, that Mr. Huskisson now abandons the idea of the national miseries having been occasioned by any other cause than the actions upon the currency, and that it is not possible that those miseries should have been SCOTCH AND ENGLISH BANKERS. 159 occasioned in any way by a mere question of "four per cent. * / " * The probability is, that Mr. Huskisson had the entire get- ting up of the business of the Bullion Report in 1810, and of that of the Bank Report in 1819; that no witnesses were ex- amined by the respective committees without his concurrence, and that he took care that none should be examined, whose opinions he had not previously ascertained to be pretty nearly the same as his own. This is not certain, but it is highly proba- ble. It is in this way that things are managed in Parliament. The committees are nominated by one or two individuals who happen to have the ear of the Government^ and who take care to nominate those only whose opinions they previously know and approve. The same system operates in nominating the wit- nesses to be examined. Not a man is nominated without first being approved by the one or two individuals who nominate the committees. If by any accident a witness should be intro- duced without this previous sanction, care is taken that his evidence shall come to nothing, that he shall be examined all day long upon indifferent matters, without being allowed to say a word upon the business respecting which he comes to be exa- mined. In this way the committees are made instruments to support and confirm the opinions of the one or two individuals who nominate them ; but they have nothing at all to do in making any actual examination into the business at issue. No- thing of this kind is ever done, or intended to be done. If either the Bullion Report Committee, or the Bank Report Committee, had effectually examined men of business generally throughout the country, instead of examining a few London bullion brokers and cambists only, it is not possible that either the Bullion Report or the Bank Report should ever have been agreed to. As the measures of a few bullion brokers and stock-jobbers, they may be well enough ; but considered as national measures, there is nothing equal to them in wildness and absurdity in the whole his- tory of the world. 160 SCOTCH AND KXGLISH BANKERS. Lord Goderich is thus left alone, " like a mile- stone on a deserted road." The " march of intellect" has left him far behind. The " schoolmaster" has been abroad." But Lord Goderich has never opened his primer /" We shall shortly learn whether the Duke of Wellington will see things in the same light that Lord Goderich sees them. If he does, it is not difficult to foresee his fate. The Duke of Wellington's situation becomes more difficult and more complicated every hour. He may struggle like a lion in the hunter s toils; but force will not relieve him. What then must he do ? He must not be guided by Mr. Cobbett, who has for twenty years denounced the paper money, because he knows and acknowledges, that the presentfabric of the Go- vernment cannot exist without it I It is no flattery to Mr. Cobbett to acknowledge, that his talents are great and various, and in some respects unrivalled. But his ambition, his inveterate prejudices, his ignorance of the paper system, and his bitter hat red of existing institutions, render him but a dangerous guide to those who wish to preserve them. The writer of this paper told Lord Sidmouth, in 1819, that in adopting Mr. Peel's Bill " the Government were falling into the snares of Mr. Cobbett, as completely as ever bird fell into the fowlers net." Within six months afterwards, Mr. Cobbett's notes of triumph resounded from across the Atlantic. The Duke of Wellington must dismiss Mr. Cobbett from his Majesty's councils, or Mr. Cobbett will very shortly SCOTCH AND ENGLISH BANKERS. 161 dismiss him. He must shake off the thraldom of the Jews and jobbers, into whose hands this de- luded nation has so long been delivered. He must c'cse his ears against the syren song of the lawyers. He must drive far away the recreant slanderers of Mr. Pitt. He must get rid of theorists and book- worms, and of antiquated and retired capitalists. These will not serve him in the great fight at " Ar- mageddon." He must call around him the bankers, the farmers, the manufacturers, the shipowners, the traders, and the landowners. These are the faithful battalions that must pull him through. He must not look back to the u t file for precedents" No circumstances exist in history, which have reference to those of England at the present period. " The high roads are broken up, and the waters out" Every thing is new and gigantic about him. He must adopt new and gigantic measures, or he is lost. Above all things, the Duke of Wellington must take care that he is not caught slumbering on his post. A SCOTCH BANKER. M No. VIII. ANTICIPATION OF THE LATE PANIC. On the Expediency of the Bank of England being prepared with a Quantity of One Pound Notes to issue immediately, whenever a new Bank Restriction Act may be determined upon. November 22, 1825. FROM the present aspect of our monetary system, it seems probable that a period is rapily approaching, when Government will find it absolutely necessary to restore the Bank Restriction Act ; and it becomes a question of great importance to ascertain whether such a measure would be efficient for its purposes, under the circumstances which will probably give rise to it. In the year 1797, when the Bank Restriction Act was first passed, no one pound notes of any kind were in circulation/ The weekly wages of all the labourers in the country were paid in gold and silver coins. When, therefore, the Bank Restriction Act was determined upon, no difficulty was found in con- tinuing the payment of those wages ; because the gold and silver coins then scattered throughout the ANTICIPATION OF THE LATE PANIC. 163 country, continued in circulation for a sufficient pe- riod, until the Bank of England and the country bankers could insinuate the one pound notes into circulation in their stead. Very different is the situation of the circulating system now. Except in Lancashire and Middlesex, nearly the whole of the weekly wages of labour are now paid in country one pound notes. It is to be expected, that the very same circumstances, which will induce the Government to have recourse to the Bank Restriction Act, will exhibit themselves in a general discredit of the one pound note circulation of the country bankers. When this general discre- dit approaches, the richer banks will withdraw their one pound notes from policy, which indeed some of them are now doing, and the weaker banks will with- draw them from compulsion. In all cases where the country banks should persevere in the issue of one pound notes, under the circumstances contemplated, it is probable that they would only issue them to their own ruin, and to the increase of the general discontent and confusion. The coins will not exist wherewith such notes can be paid ; and when no Bank of England one pound notes are ready pre- pared for that purpose, it will not be possible for them to be paid at all. The country banker may, indeed, tender large Bank of England notes of five pounds and upwards, but these will be of no avail in satisfying the claims upon him for the payment of one pound notes. Under such circumstances, it is to be feared that M 2 164 ANTICIPATION OF the country bank note circulation may totally ex- plode at the period alluded to. Whenever such explosion occurs, it will take many weeks before the Bank of England can supply itself with a sufficient quantity of one pound notes to be issued under the protection of a Restriction Act, in order to supply the place of the country one pound notes. It will require two hundred of the Bank clerks for six weeks merely to sign the necessary quantity ; and of course none but confidential clerks of the Bank can be employed for this purpose. How then is the labour of the country to be paid during this short but momentous period ? Ought not the Bank of England to take the precaution of providing itself with ten or twelve millions of one pound notes to be issued inst anter at such a crisis, in exchange for the larger notes, and to serve as a medium wherewith the country one pound notes may be either dis- charged or supported in circulation? Without some precaution of this nature, it is probable that the re- newal of the Bank Restriction Act will be found un- equal to its purposes, and for a short period the most frightful commotions may be apprehended through- out the country. It is by no means impossible, under the calumnies to which the paper system has been long exposed, that these commotions may be of such a nature as will render it impossible for any force of law to pre- serve any kind of paper in circulation. It does seem, therefore, to be a wise and judicious precaution, either that the Bank of England should be provided THE LATE PANIC. 165 with an ample supply of one pound notes to meet the emergency contemplated, or otherwise that the renewal of the Bank Restriction Act should not be postponed, until the same circumstances which will render it necessary will perhaps render it useless at the same time. No. IX. ANTICIPATION OF THE NEW BANK RESTRICTION ACT. On the Danger of postponing the passing of a New Bank Re- striction Act. February 2, 1828. SINCE the month of May, 1823, the Bank of Eng- land note has ceased by law to be a legal tender, and all debts of all kinds have been payable by law in coins of the realm. This great truth, however, continued unnoticed by the public for a long period ; and when it became necessary largely to increase the issues of bank notes in December, 1825, during the period of what is called " the panic" it was found that the bank note still retained its influence over the public mind ; and by virtue of that influence, and of that influence only, the country was rescued from the state of frightful anarchy which threatened it. The Bank of England circulation was increased between December 10 and December 24, 1825, from eighteen millions to twenty-six millions. The bank note had still the character and moral power of a legal tender over the public mind. No one thought he had the right of refusing to receive it ; and no one thought he had the right of demanding gold in ANTICIPATION, &C. 167 payment for it. Had it not been for this state of the public mind, the panic could not have been relieved by the increased issues of bank notes, because such increased issues would have been thrown in upon the Bank for payment as fast as they were issued, and instead of relieving the panic they would but have added fuel to the flame, until the whole struc- ture of our public credit was destroyed. Under the emergency here alluded to, it is very doubtful how far a new Bank Restriction Act could have been passed in due time, and have been made competent to protect the most vital interests of the nation. If the bank note had, at the period in question, lost its moral influence over the public mind, it is probable that no force of law could sud- denly have restored it. It would not have been enough for an order in council to have protected or restricted the Bank of England, a positive Act of Parliament would have been necessary. The Lon- don bankers generally, and the country bankers generally, must also have had a similar protection, or in default of this, universal ruin would have rushed in at one door when shut out at the other. During the panic, these latter bodies of men were enabled to meet the sudden and general demands upon them by giving Bank of England notes in pay- ment of those demands. But if the Bank of Eng- land notes had then lost their moral power, or if it had been known generally that they were no longer legal tenders, the public would generally have re- fused to receive them in payment of their demands, ANTICIPATION OF THE unless the same power which protected the Bank of England from paying gold, protected also the Lon- don and the country bankers from giving any thing but Bank of England notes in payment of the de- mands upon them. From these considerations it appears certainly probable, that in case any future panic should occur, at a period when the bank note shall have lost its moral influence over the public mind, or in other words, when the late Bank Restriction Act shall have been repealed de facto, in its power and influence over the public welfare, as well as de jure in the mere technical letter of the law, it does seem probable, in case of a new panic occurring at such a period, that the increased issues of Bank of England notes, or even an order in council to protect the Bank of England, would not be sufficient to meet and overcome the national emergency. A positive Act of Parliament would be required, and if such Act of Parliament could not be passed in forty-eight hours or thereabouts, the most dreadful conse- quences might be apprehended to ensue. In the passing of such an Act of Parliament, indeed, hours would be more precious than months, in any other parts of the legislation of the country. The recurrence of a new panic is not, it is true, absolutely certain, but it is nearly so*. It may, in * A new panic may originate in many ways. The slightest turn of the exchanges, or the slightest rumour of a reduced stand- ard, might bring it on in forty-eight hours ! The London bankers and merchants are now so glutted with bank notes, that it is NEW BANK RESTRICTION ACT. 169 fact, be expected from day to day, and from hour to hour. This is a truth well known to every London banker ; but the credit of bankers is so exceedingly liable to serious injury, that it is difficult to get them to acknowledge it. They refused to acknowledge it, and to sign a memorial to the Treasury respect- ing it, on the very eve of the late panic, only a week before the important house of Pole, Thornton, and Co. gave way. It is, indeed, next to impossible to extract the truth from a London tanker upon a subject where his own credit is liable to be compro- mised or mixed up. The moral power of the Bank of England note, however, is not yet gone; but it is the object of this paper to show that it is rapidly passing away. The panic contributed much to attract attention to the subject, and the very slightest attention is calculated to excite alarm, when the relative quantities of gold believed they have six millions of balances in the hands of the Bank of England. It is well known also, that they hold many millions more of bank notes lying idle in their own drawers. A slight action upon the exchanges, or a slight rumour of a reduced standard, might induce the holders of these balances and bank notes to turn them suddenly into sovereigns. Ten millions of sovereigns might be demanded of the Bank of England in the course of a single week ! The Bank could by no possibility meet an accident of this kind, without suddenly selling its Govern- ment securities to an extent which would produce instantaneous panic! This is what Lord Goderich calls a " solid and a healthy currency /" Various other ways, by which panic is liable to arise suddenly, will occur at once to the mind of a man of business, but it is not proper to allude to them here. 170 ANTICIPATION OF THE and of debt are considered throughout the country. The twenty or thirty millions of gold, which is the most which the nation can possibly obtain, appears as nothing when compared with the prodigious masses of monetary obligations which the legislature has made payable in gold. The least movement among these masses, the least disposition in the public mind to realize them in gold, at once counter- acts its own object, and endangers the whole public credit of the country. The test appears practicable so long as no one wishes to apply it. But it be- comes utterly impracticable the very moment it is attempted generally to be put in force. Notwithstanding the effect of the panic, how- ever, the Bank of England note might still have re- tained its moral power for a long period, if the doc- trines of Mr. Cobbett had not been adopted in the heart of the Government, and if such influential statesmen as Lords Goderich and Grenville had not been so far infatuated as to lend themselves to his views, and in open Parliament to stigmatize paper money as " worthless rags!" In the midst of this daring and reckless imprudence, and as if the ex- plosion of public credit was not sufficiently rapid y the apple of discord is thrown between the Bank of England and the country bankers ; and where union and concord are absolutely necessary to the national safety, there strife and crimination, and " war to the very knife,'" are kindled up from one end of the country to the other ! The country bankers, injured for many years in NEW BAN'K RESTRICTION ACT. 171 many ways, compelled by the very nature of their occupation, for year after year, in all the fluctuations of the currency, to bear the brunt of the Govern* rnent errors, to stand as it were between the living and the dead, making good the engagements of debtors to creditors, at times when debtors have been compelled to pay double the real value which they have really owed ; the country bankers compelled, in this way, for year after year, to partake largely in the losses attendant upon the occasional rises in the value of money, without the possibility of their par- taking at all in the profits attendant upon the occa- sional/alls in the value of money, these injured and meritorious men, instead of receiving the sympathy and protection to which they are entitled, are them- selves marked out and proscribed by Lords Liver- pool and Goderich, as the guilty authors of the national distress, of which they are in reality the victims and not the cause. Insult and calumny are thus added to the severest injury, and left to rankle in the hearts of as useful, as upright, and as honourable a class of tradesmen, as any that exist in England. Proceeding onward upon this most unjust and im- politic line of conduct, Lords Liverpool and Gode- rich have established branch banks throughout the country ; not to assist and come in aid of the coun- try bankers, not to heal the wounds which their own errors have occasioned, but to injure the injured, to calumniate the calumniated, to exasperate the exas- perated, to oppress the weak, and to waste prodi- 172 ANTICIPATION OF THE gaily the resources which the Government has placed in the Bank of England, in a violent and reckless warfare against the profits, the credit, and the very existence of every other banking establishment in the kingdom ! The consequence of this state of things may well be conceived. The country bankers at last are driven to the necessity of defending themselves in the best way in their power. Proscribed by the Government, denounced by the public press, and attacked by the Bank of England at their own doors, they have no other resource but to meet their opponents with such weapons as they possess. The Bank of England criminates them. They criminate the Bank of England. The Bank of England charges them with not understanding their own business, and with lending imprudent accommo- dations to the public. They charge the Bank of England with discounting accommodation bills, and with locking up the whole of their capital three times over, in one doubtful debt to the Government ! The Bank of England refuses to receive their notes. They refuse to hold or to pay away Bank of Eng- land notes. They explain to their connections that a great change has taken place in the Bank of Eng- land ; that the Bank note is now no longer a legal tender; that the Government has withdrawn its legal power from the Bank of England ; that the pri- vate fortunes of the Bank proprietors are not liable to the Bank debts ; that the Bank of England note is in reality not so good as their own ; that the Bank NEW BAXK RESTRICTION ACT. 173 of England refuses to receive the notes of country bankers, and therefore that it no longer answers their purpose to hold or to pay away the notes of a rival establishment, pursuing the conduct which the Bank of England does. In this way, the connections of the country banker are satisfied to take his own notes instead of those of the Bank of England. In many instances they warmly espouse his cause ; and in all they obtain knowledge respecting the Bank of England, which they might not otherwise have ob- tained for years yet to come. The credit of the Bank of England is thus rapidly passing away. In every part of the country the country bankers, in their own defence, are forced to expose and criminate the Bank of England ; and the reports thus propagated from hundreds of influential quarters, and probably exaggerated and distorted at every repetition, are very naturally producing an effect upon the public mind, which threatens shortly to render the Bank note a feeble instrument in arresting the action of any serious monetary convulsion. If these representations are correct, it follows as a matter of course, " that the renewal of the Bank Re- striction Act ought not to be driven off, until the same circumstances which may render it necessary, may possibly render it impotent at the same time." These words were addressed to Lord Liverpool on the 22d of November, 1825, in anticipation of the then approaching panic, and another alternative was then proposed by the writer of this paper, viz. " that the Bank of England should otherwise be provided with 174 ANTICIPATION OF THE a stock of one pound notes, wherewith the country one pound notes might be either discharged or sup- ported in circulation." This latter alternative was preferred. The country one pound notes are now in the process of retiring from circulation, but the ne- cessity of preserving a stock of one pound Bank of England notes does not seem much diminished ; however doubtful it may be, whether or not the con- templated re-issue of such notes would be adequate to the national emergency. If a panic should again occur in the present state of our monetary laws, and whilst Parliament is not sitting, the probability is, that no provision of small notes, arid no issue of large notes, by the Bank of England, would be competent to arrest its fatal pro- gress. The whole structure of our public credit would probably disappear at once, and every possible effort to restore it would prove utterly in vain. It may be thought perhaps that the renewal of the Bank Restriction Act will not be necessary. The writer of this paper is of a totally different opinion. He thinks it perfectly impossible to carry on the Government of this country much longer without it. Even admitting that it should be possible for the Government to overcome the dangers of monetary convulsions, and to overget the consequences arising out of the miseries of the population, and those aris- ing from financial embarrassments, and those arising from the approaching ruin among the landowners ; yet even then, there is still an evil left behind which NEW BANK RESTRICTION ACT. 175 no force can control and no wisdom can relieve, an evil, slow, insidious, and unseen, but most sure and mortal in its operation; that evil is famine. It is not possible that the mighty changes which are now in progress should be effected without materially in- juring the cultivation of the earth. It is not possible, in a nation like this, that an increasing population and a decreasing agricultural produce should even- tuate in any other result than famine. But it is not necessary to discuss this question now. It is suffi- ciently evident, that it is probable that a renewal of the Bank Restriction Act may be absolutely neces- sary for the safety of the country ; and it is equally evident, that the point of time, to which such renewal can safely be driven off, is a matter of the very high- est importance to have fully ascertained. iTY THE END. LONDON PRINTED BY CHARLES WOOD AND SON, Poppin's Court, Fleet Street. TTT. n-KT THE LAST DATE 14 DAY USE TO DESK FROM WHICH BORROWED LOAN DEPT. This book is due on the last date stamped below, or on the date to which renewed. Renewals only: Tel. No. 642-3405 Renewals may be made 4 days prior to date due. Renewed books are subject to immediate recall. UCLA INTERLlBRARY LOAN NON-RENEWABLE UCLA fJJERlBRARY LOAM KEC. CIR. APR 3 679 LD21A-10w-8,'73 (R1902S1 0)476 A-81 General Library University of California Berkeley LD 21-10bm-7/89 (402.1 VB 1 8 1 ; UNIVERSITY OF CALIFORNIA LIBRARY