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him to admit, that they make effectual provision for a metallic test

of paper currency a test, which averts the risk of deterioration

—which presents no obstacle to the issue of bank paper sufficient for the fair demands of commerce, and yet provides the means of checking its redundancy.

They appear therefore calculated to guard against those convulsive fluctuations in the money value of property, which any material variation in the currency is certain to produce; and to prevent that chasm in the circulating medium, which would be the fatal and inevitable consequence of an unqualified Repeal of the Bank Restriction Act.

Note.—It is a fact of notoriety, that many highly respectable country bankers contemplate an immediate reduction of their paper currency, so soon as the bank restriction shall be removed.—They say prudently, that they will not incur the risk and expense attendant upon the carriage of gold from the Metropolis, in case of any unusal demand upon them. The mischief consequent upon such diminished circulation, can hardly be calculated.—As for instance the corn buyer and grazier pay the farmer in bills upon London—the latter requires small notes for his ordinary expenses —the banker refuses to discount, because he may instantly be called upon to pay his notes in cash.—In any event, whether the Restriction be continued or not, a tender of Bank of England notes inpayment, ought still to be, as it now is, a protection against personal arrest.

OBSERVATIONS

ON

CREDIT,

WITH RELATION TO THE PROVISIONS OF THE

\

Bankrupt JUto

- AND

INSOLVENT DEBTORS' ACTS.

ORIGINAL.

LONDON:
1819.

OBSERVATIONS,

Of all other subjects, the theory of society is the most difficult. There are always a number of evils to which the community are exposed, and to provide a remedy for which the congregate wisdom of the Legislature has been often found inadequate. Witness the influx of our prisons, the magnitude of poor-rates, the recent loud and general complaints against mock auctions, &c. 8tc. And there is another evil which the community labor under, of great magnitude, and of deleterious and poisonous tendency in its influence on trade, which also escapes a remedy—and this is the abuse of that system called "Credit."

We will briefly inquire into the effects of credit as it is connected with the provisions of the Bankrupt Law, and venture to suggest some properties belonging to it which may lead to that description of evidence, which it is conceived is indispensable to be acquired by the Legislature in revising this Code.

It may be remarked that there is no portion of the jurisprudence of this country as to the utility of which so great a difference of opinion exists, as on that of the Bankrupt Law: and whether it really has operated (as it was always intended) as a punishment to the nefarious and unjust, or as an encouragement to their mal principles and practices, experience and opinion were never more at variance. Its perplexities have increased with its accumulation; and its accumulation belongs to causes, the recurrence of which has rendered Insolvency as familiar as if it were necessarily a branch of commerce, and inseparably connected with the intercourse and engagements of mercantile pursuits.

When men began by their industry to obtain superfluity, they gradually enlarged their dealings; and as they advanced in opulence, they naturally acquired confidence throughout society, and a more liberal latitude of dealing was established—a latitude which powerfully augmented that rational spirit of adventure and enterprise which has led to the present character of this country. Credit, the offspring of industry, has therefore with great propriety been called the life of commerce; and the circumstances in which it originated, evince that it is not less honorable where it is given than it is salutary in its effects. And where it is securely protected by the vigilance of the law, confined to proper hands, and kept within its legitimate bounds, nothing is more likely to give energy and spirit to commerce—to aid and advance the industry of our country—to contribute largely to its social order, and to augment its elegancies and refinement. Credit, in the person obtaining it, presupposes industry; and insolvency ought not necessarily in any case to be the consequence. But where it happens that credit may be abused, applied to indiscriminate adventure, perverted by the ingenuity and artifices of designing and unprincipled men—where it is no longer secured in its integrity by wise and restrictive laws; it becomes another name for gaming—propagates surreptitious wealth—infuses an immoral spirit of enterprise, creates a spurious system of emulation throughout society, and stabs at the root of all moral intercourse. Hence an universal spirit of competition supersedes the ordinary caution of tradesmen, and their rectitude of dealing: thus trade is reduced to a system of monopoly, chicanery, and fraud.

Whatever may be assigned as the immediate cause of a stoppage of payment—which it must be allowed may be occasioned on the moment by a variety of circumstances peculiar to the concerns of individuals—yet it is apprehended that the great primary mischief is produced from one source, viz. that of trading beyond the capital possessed by the party. It is believed that it may be assumed as a fact, ever since the Law on Bankruptcy has been established on its present principles, that there has not been one failure in which this circumstance did not belong to it—however obscured this cause may have been by apparent misfortune, plausible adventure, or high-sounding advantages of interests or connexion.

It is a matter only of speculation, to attempt to describe that state of society, which called for the introduction and severity of the Bankrupt Law. The best evidence to be collected on this point, and which is most to be relied upon, is contained in the preamble to the statute of the 34th and 35th of Henry VIII., which states " that divers and sundry persons, craftily obtaining into their hands great substance of other men's goods, do suddenly flee to parts unknown, or keep their houses, not minding to pay or restore

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