THE various changes which have taken place within the last five-andthirty years in our monetary system, will undoubtedly form one of the darkest pages in the annals of this country, and furnish to all coming generations an imperishable monument of the ignorance of British statesmen, in an age which vaunts itself on the progress which it has made in every species of knowledge, and more especially in what is called the science of Political Economy. The changes in question have spread more ruthless and wider ruin, and created more public inconvenience, as well as private misery, than any public calamity which has ever occurred in the history of any known nation. Had the task of effecting these changes fallen into the hands of intelligent men-of men possessing but even a tyro's knowledge of the general principles on which they ought to have proceeded, means would have been devised to obviate the monstrous and incalculable wrongs, both public and private, which have resulted from the alterations which have been made in the standard of value.

Atamoment of great public embarrassment and distrust, Mr Pitt was induced to have recourse to the fatal step of restraining the Bank of England from paying cash for its notes. For several years after this event, matters went on smoothly enough, and no harm, on the contrary, much good, seemed to have resulted from the measure. The Governors of the Bank, kept within bounds by old habits, and accustomed to the restraint of cash payments, did not at once perceive that their fetters had been withdrawn; hence they acted with their wonted reserve and discretion for some time after the necessity for that circumspection had ceased. By degrees, however, they began to feel their liberty. Their responsibility being lessened, if not altogether removed, they became freer in the issue of bank-notes, and in the end saturated the kingdom with paper money. This paper money gradually displaced our metallic currency, and became the sole circulating medium of the country. In the course of a

short period after the suspension of cash payments, it became apparent, both from the price of gold in the bullion market, and from the rate of foreign exchanges, that the pound note had sustained a considerable depreciation, and that although nominally representing about the fourth of an ounce of gold, it was only worth, in exchange, about the fifth of an ounce of that metal; or, in more familiar language, although nominally purporting to represent twenty shillings, it had depreciated so far as to be worth no more than fourteen, at the most fifteen shillings, in exchange for other commodities,

We must request our readers to pause at this point, and contemplate for a moment the change which then took place in our currency, together with the effects which it produced upon the pecuniary relations of society. The old standard of value was in effect destroyed, and another standard, considerably depreciated, was adopted in its stead. All public, as well as private creditors, were compelled to receive payment in paper money, and consequently plundered to an amount equalling the difference between the real value of the paper money in which their claims were liquidated, and that of the metallic currency in which their capital had been lent. Supposing, therefore, the real value of the pound note to have at that period fallen to fifteen shillings, it is manifest that a loss of twenty-five per cent was inflicted by this change upon the whole body of creditors throughout the realm, while every debtor profited to this amount, at the expense of his creditor. Nothing could have been more unfair or iniquitous, but such was the fact. Every person who had lent twenty shillings, was forced to put up with a repayment not exceeding fifteen shillings. This alteration in the currency has been called, and very properly called, an act of bankruptcy; for it was, to all intents and purposes, an act of national, as well as individual bankruptcy. The creditors, both of the state and of private individuals, were compel

led to forego at least twenty-five per cent upon their honest and just claims.

An inconvertible paper currency having been thus established as the actual, as well as legal, measure of value, all bargains were henceforward made all debts, and other liabilities, contracted in this new and depreciated standard of fifteen shillings to the pound sterling.

About 1810, the political economists took the field on the subject of the currency; they delivered themselves of long and vehement harangues against an inconvertible paper circulation, denounced our whole monetary system as vicious and fraudulent, and loudly demanded its reestablishment upon a metallic basis. In 1811, the Bullion Committee made the report which has been since so much vaunted. With infinite pains and labour this committee proved, what no man of common sense and ordinary experience doubted for a single moment, that for many years the paper pound note had depreciated from its nominal value. Lord Bexley and his party, however, steadily combated this proposition: with equal intelligence and pertinacity, they maintained that the currency had not depreciated, and that a pound note and a shilling were, in public estimation, equal in value to a golden guinea.

By degrees, the arguments and facts of the Bullion Committee began to penetrate the brains even of these official persons, who seemed at length to perceive that the paper pound note had depreciated from its nominal value. The Bullion party having, after about eight years of hard labour, hammered into their antagonists the conviction, that the paper currency had sustained a depreciation, eagerly proceeded to make the most of the vantage ground which they had gained; they saw that the battle was half won, and that the object, for which they had so long and so arduously struggled, was now within their reach. Having prevailed upon anti-bullionists to consent to the establishment of the currency upon a metallic basis, they went one step farther, and persuaded them to render the new standard of the same weight and fineness as the old standard, which had, in effect, been abolished when cash pay

as a

ments were suspended in 1797, and which, therefore, for all practical purposes, had ceased to exist for upwards of twenty years. "Since paper," argued the Bullionists, standard of value, must, from its very nature, be fluctuating and uncertain, it is expedient that a metallic standard should be substituted for it; and gold is, in many respects, the most convenient metal to constitute this standard." To all this there seems no reasonable objection. "Therefore," say they, "the pound sterling now about to be established, ought to weigh 120 grains of gold of the standard fineness." The inference here drawn is unquestionably a very extraordinary instance of jumping at a conclusion. It is difficult to believe, without positive proof, that such reasoning could for a moment have imposed upon any man; and still more difficult to conceive that it should have been acted upon by practical statesmen. The premises above stated will not support the conclusion which was then drawn from them. It appears absurd to say, that because it is expedient that the standard of value should be metallic, it is a necessary consequence that the pound sterling should contain the same quantity of gold as it contained previously to the suspension of cash payments. Reasons unquestionably may exist, why the pound sterling should contain this identical weight of gold; but the expediency of restoring a metallic standard of value is certainly not one of them. This was, in fact, the fallacy which so fatally misled the Legislature in 1819. All the absurdity in argument which has been advanced on this subject, and, what is much more to be lamented, all the mistakes which have been committed in practice, with regard to the currency, have arisen from confounding two questions, which are in their nature perfectly distinct. For it requires but little sagacity to perceive that a resolution, grounded on expediency, to return to a metallic standard, is one thing, and that fixing the weight of this metal which is to constitute the standard of the pound sterling, is another question, totally unconnected with the former.

It was not the object of a return to a metallic currency to increase the

real value of the pound sterling, in which all contracts for the twenty preceding years had been made; the object of this measure was merely to prevent the uncertainty and fluctuation in the standard of value from the continuance of an inconvertible paper currency. To avoid the fluctuating uncertainty to which the pound sterling, regulated in a paper standard, could not fail to be liable, it was, no doubt, highly expedient that the currency should have been placed upon a metallic basis. But because it was judged expedient, that, on account of its greater certainty, our currency should be placed upon a metallic, instead of a paper basis, it surely did not follow that the new standard of the pound sterling should have been made to contain a greater weight of the metal, selected for that purpose, than was actually represented by the paper pound note, for which it was adopted as a substitute. Because gold was fixed upon as the metal by which the pound sterling should for the future be measured, it was a monstrous absurdity to infer, therefore, that this pound sterling should contain 120 grains of this metal; or, in other words, be of the same weight with a standard which, to all practical purposes, had been abolished twenty years before.

The committee appointed to consider the state of the currency previously to the introduction of what is called "Peel's Bill," in 1819, seem to have had no conception of the question which really required investigation. For reasons which we cannot pretend even to conjecture, the members of this sage committee made it their principal object to ascertain how much gold the pound sterling contained before the suspension of cash payments. But this was undoubtedly a gross misapprehension of the object to which their attention ought to have been directed. It was unnecessary to appoint a committee of the House of Commons to ascertain the metallic value of the pound sterling before 1797; that fact was already well known to every city 'prentice: on the contrary, its researches should have been directed towards ascertaining the average weight of gold which the paper pound note represented during the continu

ance of the Bank Restriction Act. Having ascertained the weight of gold which the paper pound note represented, or would have exchanged for, they should have recommended it as the standard of the new currency. If, for instance, it had, on proper enquiry, been discovered that the paper pound note, though nominally representing 120 grains of gold, really represented no more than 96 grains, or three-fourths of the nominal weight, the new standard should have been made to contain 96 grains, and not, as it now does, 120 of that metal.

Instead, however, of pursuing this enquiry, and making the result of it the means of determining the weight of the metallic standard about to be re-established, the committee, most unaccountably, turned aside to hunt after a guinea-a coin which, since the suspension of cash payments in 1797, had ceased to be the standard of our currency: and having, after a laborious and painful research, for which they consider themselves, no doubt, entitled to the thanks of the country, made the amazing discovery, that the guinea contained 126 grains of gold, they decided that the new standard should therefore contain 120 grains, or of a guinea.

For more than twenty years previously to the restoration of a metallic standard in 1819, all bargains and contracts of a pecuniary nature had been entered into,-farms had been rented, taxes had been assessed, lands had been mortgaged, money had been lent both to the state and private individuals,-in a depreciated currency. For more than twenty years— a period during which a new generation of men must have sprung up, and at the end of which very few pecuniary arrangements were subsisting which had been entered into before its commencement-the whole mass of the money transactions of this country had been regulated and settled on a paper pound sterling, which did not, in fact, represent more than 96 grains of gold. When the Legislature, therefore, determined to substitute a metallic for a paper standard, policy, as well as justice, required that the new standard should have been fixed at this weight. In settling the weight of the new standard, the Legislature should have considered itself as a jury sitting in judg

even the shadow of a claim it was, therefore, an act of barefaced robbery, as it enabled every creditor, under the colour and sanction of law, to exact a pound sterling, measured by the present standard, for every depreciated pound note which he had lent.

It may also be observed, that, however important might have been the interests involved in regulating the current value of the debt due from the state to individuals, they were inconsiderable indeed, when compared with the various and extensive private interests affected by the alteration then made in the real value of the pound sterling. If we suppose, that the interest of the public debt amounted at that time to thirty millions of pounds sterling, still the pecuniary engagements of a private nature subsisting at the same period, must have amounted to at least ten times that sum. So that, if justice and good faith required, what they certainly did not, that the public creditor should have had a right to exact 120 grains of gold for the paper pound-note, representing only 96 grains, which he lent the state, it was, nevertheless, a monstrous absurdity to infer, that every private creditor was, therefore, entitled to a similar addition to the amount of his claims upon those who were indebted to him. The addition of onefourth made to the public debt by the alteration of the standard, has no doubt been felt by the community as extremely unjust and onerous; but this inconvenience has proved a mere feather in the scale, when balanced against the enormous and intolerable iniquity of adding twentyfive per cent to the real amount of all the pecuniary obligations then subsisting between private individuals. The effect of increasing the standard, in which the public creditor was to be henceforward paid, was merely to add one-fourth to the real amount of the taxes imposed upon the people; an evil and injustice, no doubt, of infinite magnitude; but the influence of this measure upon all private money engagements has proved ten times more oppressive and disastrous.

When the bullion-party succeeded in cajoling Parliament, not only to re-establish a metallic currency, but

also to make the new standard of value of the same weight and fineness as the old standard abolished in 1797, they gave the Jews, stock-jobbers, and attorneys of the country, an enormous advantage, at the expense of the classes connected with land. In 1819, the simple-minded country gentlemen fell into the snare which was artfully laid for them; they were deluded by the Ricardos and Rothchilds of the day, and led, by the confidence which they reposed in Mr Peel, whom the flatteries of the Economists had seduced into the belief that he understood the subject, into the gross folly of establishing a news tandard of value, which, at one stroke of the pen, added at least 25 per cent to the weight of their incumbrances and debts. No sooner had this monstrous act of legislative iniquity been consummated, than the real authors of it began to gather the fruit of their cunning management. The stockjobbers sold out of the funds, and thus obtained a pound worth twenty for every pound worth fifteen shillings, which they had invested in those securities: with the profits then realized, they were enabled to possess themselves of princely estates belonging to ancient families, whom this alteration of the standard ruined and beggared.

When we call to mind the vast number of estates which must have been mortgaged during the depreciation of our currency, we shall the better comprehend the frightful difficulties occasioned by the alteration of the standard in 1819. Of the enormous wrongs which that measure inflicted upon individuals, we could, from our own personal knowledge, adduce a long catalogue of affecting instances: but from want of space, as well as the fear of exhausting the patience of our readers, we must content ourselves with one or two cases, which may serve to illustrate the injuries inflicted upon a numerous body of private individuals by the operation of " Mr Peel's bill."

A landed proprietor, with whom we had some acquaintance, died in 1812. He had seven children, among whom it was his intention that his property should be divided in nearly equal shares. For this purpose, his estate was valued a short time before