increase in that amount, when coupled and attended with all the indications of a depreciated circulation, does afford the strongest confirmatory evidence, that, from the want of some adequate check, the issues of such paper have not been restrained within their proper limits.

try banks issuing such paper as a most valuable and essential branch of that improvement in this kingdom; in the same proportion, is your Committee anxious to revert, as speedily as possible, to the former practice and state of things in this respect convinced on the one hand, that any thing like a permanent and systematic departure from that practice must ultimately lead to results, which among other attendant calamities, would be destructive of the system itself; and on the other, that such an event would be the more to be deprecated, as it is only in a country like this, where good faith, both public and private, is held so high, and where, under the happy union of liberty and law, property and the securities of every description by which it is represented, are equally protected against the encroachments of power and the violence of popular commotion, that the advantages of this system, unaccompanied with any of its dangers, can be permanently enjoyed, and carried to their fullest extent.

Upon a review of all the facts and rea

Your Committee cannot quit this part of the subject without further observing, that the addition of between four and five millions sterling to the paper circulation of this country, has doubtless been made at a very small expence to the parties issuing it, only about 100,000l. having been paid thereupon in stamps to the revenue, and probably for the reasons already stated, no corresponding deposits of gold or Bank of England notes being deemed by the country banks necessary to support their additional issues. These parties therefore, it may be fairly stated, have been enabled under the protection of the law, which virtually secures them against such demands, to create within the last year or 15 months, at a very trifling expence, and in a manner almost free from all present risk to their respec-sonings which have been submitted to the tive credits as dealers in paper money, issues of that article to the amount of several millions, operating, in the first instance and in their hands, as capital for their own benefit, and when used as such by them, falling into and in succession mixing itself with the mass of circulation of which the value in exchange for all other commodities is gradually lowered in proportion as that mass is augmented. If your Committee could be of opinion that the wisdom of parliament would not be directed to apply a proper remedy to a state of things so unnatural, and teeming, if not corrected in time, with ultimate consequences so prejudicial to the public welfare, they would not hesitate to declare an opinion, that some mode ought to be derived of enabling the state to participate much more largely in the profits accruing from the present system; but as this is by no means the policy they wish to recommend, they will conclude their observations on this part of the subject, by observing, that in proportion as they most fully agree with Dr. Adam Smith and all the most able writers and statesmen of this country, in considering a paper cir culation constantly convertible into specie, as one of the greatest practical improve ments which can be made in the political and domestic economy of any state; and in viewing the establishment of the counVOL. XVII.-Appendix.

consideration of your Committee in the course of their enquiry, they have formed an opinion, which they submit to the House :-That there is at present an excess in the paper circulation of this country, of which the most unequivocal symptom is the very high price of bullion, and next to that, the low state of the continental exchanges; that this excess is to be ascribed to the want of a sufficient check and control in the issues of paper from the bank of England; and originally, to the suspension of cash payments, which removed the natural and true control. For upon a general view of the subject, your Committee are of opinion, that no safe, certain, and constantly adequate provision against an excess of paper currency, either occasional or permanent, can be found, except in the convertibility of all such paper into specie. Your Committee cannot, therefore, but see reason to regret, that the suspension of cash payments, which, in the most favourable light in which it can be viewed, was only a temporary measure, has been continued so long; and particularly, that by the manner in which the present continuing act is framed, the character should have been given to it of a permanent war measure.

Your Committee conceive that it would be superfluous to point out, in detail, the disadvantages which must result to the (R)

country, from any such general excess of currency as lowers its relative value. The effect of such an augmentation of prices upon all money transactions for time; the unavoidable injury suffered by annuitants, and by creditors of every description, both private and public; the unintended advantage gained by government and all other debtors; are consequences too obvious to require proof, and too repugnant to justice to be left without remedy. By far the most important portion of this effect appears to your Committee to be that which is communicated to the wages of common country-labour, the rate of which, it is well known, adapts itself more slowly to the changes which happen in the value of money, than the price of any other species of labour or commodity. And it is enough for your Committee to allude to some classes of the public servants, whose pay, if once raised in consequence of a depreciation of money, cannot so conveniently be reduced again to its former rate, even after money shall have recovered its value. The future progress of these inconveniencies and evils, if not checked, must at no great distance of time, work a practical conviction upon the minds of all those who may still doubt their existence; but even if their progressive increase were less probable than it appears to your Committee, they cannot help expressing an opinion, that the integrity and honour of parliament are concerned, not to authorize, longer than is required by imperious necessity, the continuance in this great commercial country of a system of circulation, in which that natural check or controul is absent which maintains the value of money, and, by the permanency of that common standard of value, secures the substantial justice and faith of monied contracts and obligations between man and man.

Your Committee therefore, having very anxiously and deliberately considered this subject, report it to the House as their opinion, That the system of the circulating medium of this country ought to be brought back, with as much speed as is compatible with a wise and necessary cau tion, to the original principle of cash payments at the option of the holder of Bank paper.

Your Committee have understoodthat remedies, or palliatives, of a different nature, have been projected; such as, a compulsory limitation of the amount of Bank advances and discounts, during the continu ance of the suspension; or, a compulsory limitation during the same period, of the rate of Bank profits and dividends, by carrying the surplus of profits above that rate to the public account. But, in the judgment of your Committee, such indirect schemes, for palliating thepossible evils resulting from the suspension of cash payments, would prove wholly inadequate for that purpose, because the necessary proportion could never be adjusted, and if once fixed, might aggravate very much the inconveniencies of a temporary pressure; and even if their efficacy could be made to appear, they would be objectionable as a most hurtful and improper interference with the rights of commercial property.

According to the best judgment your Committee has been enabled to form, no sufficient remedy for the present, or security for the future, can be pointed out, except the repeal of the law which suspends the cash payments of the Bank of England.

In effecting so important a change, your Committee are of opinion that some difficulties must be encountered, and that there are some contingent dangers to the Bank, against which it ought most carefully and strongly to be guarded. But all those may Your Committee moreover beg leave be effectually provided for, by entrusting to advert to the temptation to resort to to the discretion of the Bank itself the a depreciation even of the value of the charge of conducting and completing the gold coin by an alteration of the stand-operation, and by allowing to the Bank so ard, to which parliament itself might be ample a period of time for conducting it, subjected by a great and long continued as will be more than sufficient to effect its excess of paper. This has been the resourse completion. To the discretion, experience, of many Governments under such circum- and integrity of the directors of the Bank, stances, and is the obvious and most easy your Committee believe that parliament remedy to the evil in question. But it is may safely entrust the charge of effecting annecssary to dwell on the breach of pub-that which parliament may in its wisdom lic faith and dereliction of a primary duty of Government, which would manifestly be implied in preferring the reduction of the coin down to the standard of the paper, to the restoration of the paper to the legal standard of the coin.

determine upon as necessary to be effected; and that the directors of that great institu tion, far from making themselves a party with those who have a temporary interest in spreading alarm, will take a much longer

Your Committee have not been indifferent to the consideration of the possible occurence of political circumstances, which may be thought hereafter to furnish an argument in favour of some prolongation of the proposed period of resuming cash payments, or even in favour of a new law for their temporary restriction after the Bank shall have opened. They are, however, far from anticipating a necessity, even in any case, of returning to the present system. But if occasion for a new measure of restriction could be supposed at any time to arise, it can in no degree be grounded, as your Committee think, on any state of the foreign exchanges, (which they trust that they have abundantly shewn the Bank itself to have the general

view of the permanent interests of the Bank, as indissolubly blended with those of the public. The particular mode of gradually effecting the resumption of cash payments ought therefore, in the opinion of your Committee, to be left in a great measure to the discretion of the Bank, and parliament ought to do little more than to fix, definitively, the time at which cash payments are to become as before compulsory. The period allowed ought to be ample, in order that the Bank directors may feel their way, and that, having a constant watch upon the varying circumstances that ought to guide them, and availing themselves only of favourable circumstances, they may tread back their steps slowly, and may preserve both the course of their own affairs as a company, and that of public and commer-power of controlling,) but on a political cial credit, not only safe but unembarrassed. With this view, your Committee would suggest, that the restriction on cash payments cannot safely be removed at an earlier period than two years from the present time; but your Committee are of opinion, that early provision ought to be made by parliament for terminating, by the end of that period, the operation of the several statutes which have imposed and continued that restriction.

In suggesting this period of two years, your Committee have not over-looked the circumstance, that, as the law stands at present, the Bank would be compelled to pay in cash at the end of six months after the ratification of a definitive treaty of peace; so that if peace were to be concluded within that period, the recommendation of your Committee might seem to have the effect of postponing, instead of accelerating the resumption of payments. But your Committee are of opinion, that if peace were immediately to be ratified, in the present state of our circulation it would be most hazardous to compel the Bank to pay cash in six months, and would be found wholly impracticable. Indeed, the restoration of peace, by opening new fields of commercial enterprise, would multiply instead of abridging the demands upon the Bank for discount, and would render it peliarly distressing to the commercial world if the Bank were suddenly and materially to restrict their issues. Your Committee are therefore of opinion, that even if peace should intervene, two years should be given to the Bank for resuming its payments; but that even if the war should be prolonged, cash payments should be resumed by the end of that period.

state of things producing, or likely very soon to produce, an alarm at home, leading to so indefinite a demand for cash for domestic uses as it must be impossible for any Banking Establishment to provide against. A return to the ordinary system of banking is, on the very ground of the late extravagant fall of the exchanges and high price of gold, peculiarly requisite. That alone can effectually restore general confidence in the value of the circulating medium of the kingdom; and the serious expectation of this event must enforce a preparatory reduction of the quantity of paper, and all other measures which accord with the true principles of banking. The anticipation of the time when the Bank will be constrained to open, may also be expected to contribute to the improvement of the exchanges; whereas a postponement of this era, so indefinite as that of six months after the termination of the war, and especially in the event of an exchange continuing to fall, (which more and more would generally be perceived to arise from an excess of paper, and a consequent depreciation of it) may lead, under an unfavourable state of public affairs, to such a failure of confidence (and especially among foreigners) in the determination of parliament to enforce a return to the professed standard of the measure of payments, as may serve to precipitate the further fall of the exchanges, and lead to consequences at once the most discredi table and disastrous.

Although the details of the best mode of returning to cash payments ought to be left to the discretion of the Bank of England, as already stated, certain provisions would be necessary, under the au

thority of parliament, both for the conve- | present price is 41. 10s. per oz. Portugal nience of the Bank itself, and for the se- gold is about the same fineness as our curity of the other banking establishments standard. in this country and in Ireland.