was only 133s. Whence this difference? We think the evidence points clearly to the depreciation of the paper in which payments were reckoned. Now, in May and June, 1812, the price of gold bullion was about £4 18s. per ounce, at which the real value of the note was 15s. 11d. Now, are we to suppose that the enhancement of prices, when paid in paper, which was quite notorious before Lord Stanhope's Bill, was actually annihilated by that Act?

103. The principles of the Bullion Report having been decisively rejected by Parliament, and pronounced to be fallacious, by the resolutions which declared 21 to be equal to 27, the Bank took no measures to bring their notes to a nearer conformity to their nominal value, and the market or paper price continued to rise till, in November, 1813, it stood at £5 10s., the greatest height it ever reached. The long continuance of high prices, partly caused by a continued series of deficient harvests, and partly by the depreciation of the paper in which they were paid, gave rise to the belief that they would continue permanent. Immense speculations began in land-jobbing, vast tracts of waste and fen land were reclaimed. It was at this time that the immense agricultural improvements in Lincolnshire were effected. Rents in most cases rose to treble what they were in 1792; all the new agricultural engagements entered into at this period were formed on the basis of these extravagant prices; landlords and tenants increased their expenditure in a like proportion, family settlements were made on a commensurate scale. As a natural consequence, country banks greatly multiplied. In 1811 they were 728, in 1813 they had risen to 940, and the amount of their issues were supposed, on the most moderate estimate, to be about £25,000,000. After the disasters of the French in the Russian Campaign of 1812, and the Battle of Leipsic, the ports of Russia and Northern Germany were thrown open to British commerce. This naturally gave rise to enormous speculative exports and overtrading.

104. The harvest of 1813 was prodigiously abundant, so that the price of corn, which in August, 1812, had been 155s., and had receded gradually from that point, till August, 1813, fell with great rapidity, and in July, 1814, was only 68s. The ex

porting speculations were at their height in the spring of 1814, and the prices of all such commodities rose to a very unusual height, in many cases to double and triple of what they had been before. Every branch of industry was by the preceding causes affected, and the natural and inevitable consequences soon followed: a violent revulsion and general depression of prices of all sorts of property, which entailed such general and universal losses and failures among the agricultural, commercial, manufacturing, mining, shipping, and building interests, as had never before been paralleled. As is always the case, the consequences of the wild speculations and engagements persons had entered into during the continuance of the fever continued to be felt for some years after. The disasters commenced in the Autumn of 1814, continued with increasing severity during 1815, and reached their height in 1816-17. During these years 89 country bankers became bankrupts, and the reduction of the issues of country paper was such, that in 1816 its amount was little more than half what it had been in 1814.

105. This general discredit of country bank paper, resembling what had previously occurred in 1793 and 1797, caused a demand for additional issues from the Bank of England, to help to maintain public credit; and, though this caused an extension of the Bank paper by upwards of three millions, so great was the abstraction of country Bank paper from circulation (to certainly three times the amount of the Bank of England issues), that the value of the whole currency rapidly rose, so that, while in May, 1815, the market or paper price of gold was £5 6s., the exchange on Hamburg 28.2, and that on Paris 19 in October, 1816, the paper price of gold had rapidly fallen to £3 18s. 6d., the exchange with Hamburg was 38, and that on Paris 26.10., and they remained with little variation at these prices till July, 1817.

106. Hence, at length, was manifested the most complete triumph of the principles of the Bullion Report. The great plethora of this worthless quantity of paper currency being removed, the value of the whole currency was raised almost to par, so near, in fact, that the smallest care and attention would have brought it quite to par; and if means could have been taken to prevent the growth of the rank luxuriance of country Bank

notes, cash payments would have been resumed at this period with the utmost possible facility, and, as a matter of course, without exciting the least comment.

107. We have seen that, on several previous occasions, the Bank had intimated to the Government their perfect readiness and ability to resume payments in cash, but had always been prevented from doing so for political reasons. In 1815, when peace was finally restored, they prepared in good faith to be ready to do so as soon as they should be required, and, during that year and 1816, they accumulated so much treasure that, in November, 1816, they gave notice of their intention to pay all their notes dated previously to the 1st January, 1812, and in April, 1817, all their notes dated before 1st January, 1816. When this was done, there was found to be scarcely any demand on them for gold. The nation had got so accustomed to a paper currency that they were most unwilling to receive gold for it. Mr. Stuckey, one of the largest bankers in the West of England, said, that during this partial resumption of cash payments it cost him nearly £100 to remit the surplus coin which accumulated upon him to London, as he could not get rid of it in the country, his customers all preferring his notes; many persons who had hoarded guineas requested as a favour to have notes in exchange.

108. In March, 1812, the restriction was prolonged to July, 1816. The bill was brought in and passed before the news of Napoleon's quitting Elba had reached England. The Act was scarcely passed when the new war broke out which ended at Waterloo, and the expenses of the campaign made the Ministers dread a monetary crisis, and the restriction was subsequently prolonged till July, 1818.

109. The partial resumption of cash payments was attended with perfect success; it caused no very great demand for gold, which continued to accumulate in the Bank till October, 1817, when it reached its maximum, being £11,914,000. In that month the Bank gave notice that it would pay off in cash all the notes dated before 1st January, 1817, or renew them at the option of the holders. In the course of 1817 a very large

amount of foreign loans were contracted for; Prussia, Austria, and other continental States of lesser importance, were endeavouring to replace their depreciated paper by a metallic currency, and, as money was abundant in England, a very large portion of these loans was taken up here. The effect of this began to manifest itself in April, 1817, when the exchanges with Hamburg and Paris began to give way, and the market price of gold to rise. These phenomena increased gradually throughout 1818, until January, 1819, the price of gold was £4 3s., the exchange on Hamburg 33.8 and that on Paris 23.50. In July, 1817, the new gold coinage began to be issued from the Mint in large quantities. The consequence was a steady demand for gold set in upon the Bank, and, in pursuance of its notices, the sum of £6,756,000 was drawn out of it in gold. Just at this time the British Government reduced the rate of interest upon Exchequer bills. The much higher rate of interest offered by continental Governments caused a great demand for gold for exportation, and in the beginning of 1818 a very decided drain set in. The Bank directors, however, determined to set all the principles of the Bullion Report ostentatiously at defiance. While this great drain was going on, they increased their advances to Government from £20,000,000 to £28,000,000, and though they knew perfectly well that the demand of gold was for exportation, they took no measures whatever to reduce their issues for the purpose of checking the export. At the same time the issues of country banks had increased by two-thirds since 1816.

110. This demand for gold became more intense during 1818 and 1819, and it became evident that the Bank would soon be exhausted if legislative interference did not take place. Accordingly, on the 3rd February, 1819, both houses appointed Committees to inquire into the state of the Bank; and, on the 5th April, they reported that it was expedient to pass an Act immediately to restrain the Bank from paying cash in terms of its notices of 1816-17. An Act for that purpose was passed in two days' time. It was stated in the Report of the Commons that in the first six months of 1818, 125 millions of francs had been coined at the French mint, three-fourths of which had been derived from the gold coin of this country. The Act forbade the

Bank to make any payments in gold whatever, either for fractional sums under £5, or any of their notes, during that Session of Parliament. The Act, therefore, totally closed the Bank for payments in cash.

111. As we have given the names of the Committees of 1804 and 1810, we subjoin those of the Committees of both Houses in 1819. Those in the Commons were Lord Castlereagh, Mr. Vansittart, Mr. Tierney, Mr. Canning, Mr. Wellesley Pole, Mr. Lamb, Mr. F. Robinson, Mr. Grenfell, Mr. Huskisson, Mr. Abercromby, Mr. Banks, Sir James Mackintosh, Mr. Peel, Sir John Nicholl, Mr. Littleton, Mr. Wilson, Mr. Stuart Wortley, Mr. Manning, Mr. Frankland Lewis, Mr. Ashhurst, Sir John Newport. The Committee of the Lords were the Earl of Harrowby, Duke of Wellington, Marquis of Lansdowne, Duke of Montrose, Earl of Liverpool, Earl of St. Germains, Earl Bathurst, Viscount Sidmouth, Earl of Aberdeen, Earl Granville, Lord King, Lord Grenville, Lord Redesdale, Earl of Lauderdale.

112. The chief points of interest in these reports regarding our present subject are the opinions held by the witnesses respecting the great doctrines of the Bullion Report. The reports of neither House entered into the question of the theory of the currency, they were confined to recommending a certain course of action; but they examined a number of witnesses of the first eminence on the subject, and the result of their evidence is most extraordinary. It will be remembered that, both in 1804 and 1810, the immense preponderance of commercial testimony was entirely adverse to the doctrine that the issues of paper currency had any effect upon the exchanges, or the price of bullion, or should be regulated by them. Nevertheless, the reports of both Committees were entirely in the teeth of the mercantile evidence. The Bullion Report had now been before the country for nine years, and had caused more public discussion, both in Parliament and in the press, than almost any subject whatever; and it is perfectly manifest that if its principles were erroneous, the commercial world would only have been further strengthened in their opposition to them. But what was the result now? The overwhelming mass of commercial evidence was entirely in their favour. The current of mercantile opinion was now just as