author, from which, in addition to the parts which Mr. Law has published *, I had collected very fatisfactory information of the degree and influence of the fluctuation of the value of money in Bengal. "I do not observe to you that money is only the fign of wealth, or a measure whereby we compare the value of one commodity with another, confequently its value fhould be determinate, and not liable to fluctuation: how different is our fituation here! In the month of November laft, money could not be lent at more than 8 per cent. per annum; in the month of May it was not to be borrowed for less than 2 per cent. per month, at short periods, or more than 24 per cent. per annum; so that its productive value rose upwards of 200 per cent. in a month, a fluctuation that would not be credited in any other country: What is the confequence of this? every commodity which money represents finks in the fame proportion; the merchant, the tradefman, the artificer, and the husband

* Sketch of late Arrangements, Introduction, to follow the fifth line of page xxx.

man, are either ruined, or, if able to stand the fhock, are taxed in all the amount of the increased value, to add to the overgrown fortunes of ufurers and monied men, the drones of the country.

Government fuffers in the fame proportion, and ever muft, while the present sys tem of finance exifts; the remedy is obvious, and is of eafy attainment; it cannot have escaped you that nothing more is neceffary than for Government to give circulation to its own paper iffues, by receiving back what it pays, this would at once add a fum to the circulation of the place equal to the whole amount of certificates iffued*; to which I might also add the bonds, for both would become ready money,

money, bearing intereft, the best circulating medium perhaps in the world. But the subject of finance, however much interwoven with commerce, I must, for many reasons, avoid; 1 fhall therefore briefly obferve farther,

* December, 1791, the year in which this letter was written, they amounted to rupees 2,40,90817:10:7.

upon the baneful influence which high in-
terest and quick changes in the value of
money have on the trade of the country;
that the late rife in the value of money,
and depreciation of paper, withdrew from
circulation, and of courfe from the capital
of this country, a fum equal to all the
Company's paper in iffue, which, whilst
at par, was nearly equal to money as a fa-
cile medium of exchange, but when at a
discount, as we have lately seen of 18 per
cent., was a lofing commodity, that the
opulent locked
up in their chefts to wait
for a favourable change, and the merchant,
contractor, or fervant, who had taken it
from the Company as a money equivalent,
preffed by their neceffities, fold to the
ufurer as fast as poffible, at any loss, to
avoid a ftill greater, who of courfe with-
drew it from circulation until he could fell
it to advantage."

A bank, it has been before obferved, was established in 1786* at Calcutta ; its capital did not exceed 22 lacks; its fecurity

* Page 388.

and control not being defined by act of Parliament, became inadequate to its avowed purposes and to the aid of the induftrious. The well-intended fupport of Lord Cornwallis to that inftitution was founded on an engagement of the bank to furnish a fum not exceeding 8 lacks, at

8

per cent., weekly or monthly. The bank notes obtained circulation in the public offices and in the remittances of the revenue, which enabled them to collect the circulating fpecie, and whether it was exported by Government, or fent up to the higher provinces by the bank to be coined for its emolument, is immaterial, the fpecie was withdrawn from the feat of Government, in a degree seriously to affect both the merchant and the manufacturers. Specie lent to the favoured was at the rate of 12 per cent. for four months, under faleable fecurities, renewable three times in the year; and the orders of the Board of Revenue on the Collectors paffing into circulation as the merchants remittances of their advances to the manufacturer, if ever they proved anticipations of revenue, unless realized by discount, they retarded the ad

vances, on the early payment of which the whole of the merchant's fuccefs and profits depended: thefe and other circumftances counteracted the real utility of the bank, and terminated in its total failure.

It will be the fubject of serious confideration of Commiffioners and Directors, under the present act, to afcertain in what degree a bank is neceffary, and under what regulation it may promote the interest of the country and of Great Britain. I have ftated fufficient to fhew that neither the capital nor institution of the late bank was adequate to the object proposed by Sir James Steuart in 1772; the opinion of the public fince that period has been attracted by different statements, and the control of Government has been directed to connect fyftems abfolutely irreconcileable, because they tend to favour different interests, and by different modifications to perpetuate defective principles. The prefent act has confirmed the exclufive trade of the Company in articles heretofore of clofe monopoly ; leaving therefore to others their own opinion, I shall give the refult of my private