abundance, and the continuance of the issue of bank notes as usual, in ignorance of all these causes which rendered less currency necessary. All sorts of schemes were in consequence resorted to, in order to employ this excess of capital and currency. Many of those who em barked in them became involved; and bankers who had discounted their paper were involved with them.

Capital and activity will always seek employment; but they are not always guided by knowledge and skill, which the legislature cannot impart, even if it possessed both; nor are they always exerted under favourable circumstances, which the legislature can still less command, though, unfortunately for industry, it is too apt to make the attempt. In periods of prosperity, however, the exuberance of capital and activity is termed enterprise; in periods of revulsion it is termed speculation: but the principle is still the same. The consequences of interference may teach us the wisdom of non-interference with the natural course of things. Whenever we attempt to regulate matters which an Almighty Providence has so constituted as to regulate themselves, results never fail to follow altogether different from what we expected, and oftentimes contrary to what we intended.

1

The revulsion in 1825-6 did not differ from

the revulsion of 1815-16, nor much from that of 1810-11, or even from that of 1793-4. But "the principal source of it was said to be found "in the rash spirit of speculation which had per"vaded the country for some time, supported, fos"tered, and encouraged by the country banks*, who, in truth, were the victims, not the causes, of it: and, at all events, small notes, which have been assimilated, but have no more resemblance to coin than bills of exchange have to commodities, had no share in producing it; nor could the prohibition of issuing them improve the paper of bankers, or enable the country parts of England to sustain a currency of gold.

Under a contrary impression, however, the minister violated the law, by commanding the Commissioners of Stamps to suffer no more small notes to be stamped: and the legislature was prevailed upon to cause them to be discontinued after April, 1829.†

The minister was not less violent against the exclusive privilege of the Bank, the removal of which certainly would have improved the paper of bankers; but here he was not equally successful. The Bank would only consent to

* Letter of the First Lord of the Treasury, and the Chancellor of the Exchequer, in January 1826, vol. xix. Finance Accounts.

† 7 Geo. 4. c. 6.

relinquish its exclusive privileges sixty-five miles beyond London: and even what they appeared to give up was in a great measure preserved, by a clause which prohibited any of the joint stock companies, which the Act might originate, from drawing upon London for sums of or under 50l.; thereby giving a monopoly in such paper to the existing banking companies, who were supposed to be in default, to the exclusion of the better companies, which it was passed to establish.*

CHAP. VII.

METALLIC STANDARD.

PREVIOUS to 1816, gold and silver coin were equally a legal tender, to any amount, in England; but, since that year, gold coin has been declared the only legal tender for sums above forty shillings.t

Another important alteration made in this year was, that our pound of Mint silver, in place of being coined into 62s. as formerly, from the time of Queen Elizabeth, was directed to be

*7 G. 4. c. 6.

+ 56 G. 3. c. 68. § 11, 12.

coined into 66s. of which, however, 62s. only were to be delivered from the Mint. *

The effect of this regulation was, to prevent any person from carrying silver to the Mint to be coined, because no person would carry a pound of silver to the Mint to have parts of it retained.

The silver coin, however, being estimated in gold, this prevention is of no further consequence than as it throws upon the government the duty of providing a sufficiency of silver coin, without having the means of ascertaining what will be required.

So long as small notes were in circulation, these, in some measure, regulated the amount of silver coin; because bankers in the country, issuing small notes, were obliged to keep a stock of silver to meet demands upon them; while their being obliged to keep such a stock of silver tended to limit the issue of notes. But, not small being now obliged, they no longer keep such a stock of silver, and the country parts of England are thus distressed from the want of means to make small payments.

A standard of gold, however, is preferable to a standard of silver, in this respect, that it is less liable to change; but a poor country cannot

* 56 Geo. 3. c. 68. § 11, 12.

sustain a currency of gold; and though England be a rich country, yet many parts of it are poor, particularly the agricultural districts, which thus suffer from a want of silver currency, and also from a want of gold currency, which they are unable to retain. Gold travels up to London, in the same manner, and for the same reason, that Bank of England notes return thither. Both may come in to bankers in the country, who, however, do not issue either, but send both to their correspondents in London, as remittances, on account of the bills of exchange which they draw upon such correspondents.

In this situation, one of two things is unavoidable. Either we must adopt a standard of silver, and again coin our pound of Mint silver into sixtytwo parts or shillings; or, preserving our gold standard, with our present Mint regulations as to silver coin, we must again allow small notes to be issued.*

* Many persons have suggested that the value of gold should be declared by law to be 47. per ounce. The suggestion shows that those who make it know nothing of the matter. By our Mint regulations, the exchangeable value of gold is fixed as in regard to silver, in the proportion of 15.2096 to 1; and our pound of Mint silver, consisting of 12 ounces, having been, previous to 1816, coined into 62 parts or shillings, and each shilling representing 12 pence, our Mint price of silver is said to be 5s. 2d. an ounce; so that an ounce of gold, estimated in silver at 5s. 2d. an ounce, is exactly

E