mence with June, 1827, we find that three very extensive fluctuations have taken place since that period-a space of four years and eight months; that the circulation ought to have been nearly five millions less in April, 1829, than it was in June, 1827; that it ought to have been nearly six millions greater in June, 1830, than it was in the year before; and that it ought to have been seven millions less in February, 1832, than it was in June, 1830. These fluctuations, it must also be observed, should have taken place upon a circulation, the maximum of which is about twenty-one millions and a half.

Upon comparing, indeed, the account of the circulation from 1827, with this account of their stock of gold, it does not appear that the fluctuations in the former have fully corresponded with the variations in the latter. But this is not consistent with the professions of the Bank, and it cannot be considered as indicative of their future intentions to diminish in any degree the effect of similar fluctuations in their stock of bullion upon the currency. For it will be seen by the following extract from Mr. Norman's evidence, that if the demand upon them for gold was very great, they would not only not relax from contracting their issues to the extent of the drain, but would actually carry the contraction still further.

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(2461) QUES." If 21,000,000 of notes in circulation, and 6,000,000 deposits, making altogether 27,000,000 of liabilities, be a full currency, you would consider nine millions a proper sum of bullion for the Bank to retain ?” ANS.-"Yes, I should think it quite enough." (2463) QUES." According to late experience "of the common rate at which an unfavourable exchange acts upon the country, does it not go "to the extent of drawing from five to seven or eight millions of bullion from the country?"

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ANS." I can hardly answer that question; "I think we lost about six millions in the last "drain."

(2464) QUES.-"The effect of that operation "then would be to leave the Bank with 3,000,000 "of bullion, and with 21,000,000 of liabilities?"

ANS." It would under those circumstances; "but the liabilities were more than 27, and the "treasure than nine millions, before the last "drain."

(2465) QUES." Would you think that a safe position for our paper currency to rest upon ?" ANS. "I certainly should think, under those cir"cumstances, that the Bank treasure was at a mi"nimum, and rather lower than was desirable; "but I think you could hardly imagine a drain

for exportation equal to 6,000,000. In the "case supposed, should it occur, I should consider

"it would justify a departure from our ordinary

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principle, and render a forcible contraction expe"dient; hardly ever more causes united to pro"duce an extensive drain than on the last occa"sion."

By this it is at all events obvious, that there is no intention on the part of the Bank to mitigate the fluctuations to which their circulation is subjected, by being made to depend upon the foreign exchanges. And that by thus strictly adhering to their rule, if not going beyond it, they consider they carry into effect, in the best possible manner, the principle which Mr. Ward has stated.

Now the principle of the Bullion Committee and the Cash Payment Committees, to which this rule is intended to give effect, is, not only that the London circulation should fluctuate in this manner, but that a corresponding fluctuation should be extended to the Country Banks. It consequently follows, that if the fluctuations of the Bank are correct, the whole circulation of the kingdom should correspond with them, and every fourteen to twenty months an increase and decrease in it to the extent of from a quarter to a third of its whole amount should take place.

Hence we must come to one of two conclusions: either that the Country Bankers are wrong in not obeying to this extent the impulse of the foreign

exchanges, or that the Bank of England are in error in doing so.

If, however, the whole circulation of the United Kingdom were to fluctuate in any such manner, we should undoubtedly have a general revolution in property every two or three years, and probably in Government too: for it is not disputed that the general price of all things is determined by the quantity of money in actual circulation; and revolutions in property are the general precursor of revolutions in Government. We might therefore be disposed to question the soundness of these doctrines from the consequences to which they would inevitably lead. But in addition to this, we do not find that nations possessing a currency exclusively metallic are subject. to these changes. We may therefore infer, that notwithstanding the Bank professes, as stated by Mr. Ward, to be governed by the principles which would regulate the currency, if it were metallic, there must be something in their system not altogether in strict conformity with this principle.

The principle, however, laid down by Mr. Ward is correct. It is, or ought to be, "the duty of "the Bank to take care that the public shall have "no cause of complaint, by finding that some per"nicious effect shall attach to the issuing of notes "that would not have occurred, had the currency "been confined to gold." But in acting upon

this principle, they take too limited a view of the subject.

When they thus speak of the currency being confined to gold, they mean the gold circulation represented by the notes of the Bank of England; they do not look beyond the circle of their own establishment. But gold imported into London is received in payment for manufactured commodities, the produce of the land and labour of the country at large, and is due to Ireland, Scotland, and the rest of England, as well as London. And if the circulation of the three kingdoms were exclusively gold, the chief part of the money imported would spread over the whole face of the country. It would be imported into London in the first instance, because it generally comes in the shape of bullion or foreign coin, and must be coined at the Mint into English money, before it can be circulated in the country. But with a metallic currency, very little of it would remain to be circulated in London.

The Bank, however, do not see this. They act upon the supposition that with a metallic currency all the gold imported would circulate where their notes circulate, and no where else. They perceive that under the present system, if they did not purchase the gold, and issue their notes upon it, it would be coined at the Mint, put into circulation, and would be circulated