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that the Bank would, in a short time, be | commenced, I believe, in the well-known

unable to pay its notes in gold, if called on for that purpose to any great extent.

A call of this sort was made upon it in 1797; and, as we have seen, and now feel, the Bank was unable to pay. Its creditors, that is to say, the holders of its notes, demanded their money; the Bank flew to the minister Pitt for protection; the minister, by an Order of Council, authorized the Bank to refuse to pay its creditors; the Bank did refuse; the parliament passed an Act to shelter the Minister and the Bank Directors and all who had been guilty of this violation of law, and, at the same time enacted, that, for the future, the Bank should not be compellable to pay its notes in gold or silver. After this memorable transaction, the full and true history of which I have recorded in the foregoing Letters; after this, the whole concern assumed a new face and indeed a new nature. The holder of a bank note could no longer go and demand payment of it in guineas; it was impossible, therefore, that he should look upon 105 £. in notes as quite equal in value to 100 guineas. Still, however, in consequence of the Meetings and Combinations of the rich, and of the enormous influence of the government, to which may be added the dread in every man of being marked out as a Jacobin and Leveller; in consequence of all these, and of the necessity of having something to serve as money, the notes continued to circulate; and, as the alarm subsided, the guinea returned and circulated in company with them; but, not with that cordiallity that it used to do. It became much less frequent in its appearance in company with the notes; it held itself aloof; seemed to demand a preference; but, not appearing to like to assume this superiority over an old and familiar as sociate, and yet unwilling to pass for so much less than its worth, it soon began to keep away altogether, retiring to the chests of the hoarders, or going upon its travels into foreign parts, until such time as it found itself duly estimated in England, which would naturally be when people began to make openly a distinction between paper and coin.

That time arrived about two years ago; but, no sooner was the distinction thus made, and acted upon, than the govern ment began to prosecute the actors, and

case of DE YONGE, who, under laws passed about two hundred years before such things as bank notes were ever heard of, was convicted, about a year ago, of the crime of exchanging guineas for more than their nominal value in bank notes.* DE YONGE moved for an arrest of judgment; the case has been since argued before the judges, and their decision thereon is shortly expected to be promulgated. Other persons have been prosecuted in the same way, and upon the same ground, the effect of which naturally has been to deter people from openly purchasing and selling guineas, and also from tendering them generally in payment for more than their nominal value in paper. But, it is very notorious, that the distinction is, nevertheless, made, and that, in payments, men do take gold at its worth in comparison with the paper. Two prices are not yet openly and generally made; but, they exist partially, and the extent of them is daily increasing.

To this point, then, we are now arrived, and here we see proof, not of a depreciation of money of all sorts, arising merely from that general plenty of money spoken of above; but arising from the abundance, or plenty, of paper, that is to say, the great quantity of the paper compared with that of the coin. Hence we say, that the bank notes have depreciated, or fallen in value; and, that there should be found any human being to assert the contrary, or to believe, or affect to believe, the contrary, is something that, were not the fact before our eyes, no man could think pos sible: but, we live in times when wonder no longer seems to form a feeling of the mind.

This state of things it was easy to foresee; but, the nation has been deluded by the specious argument of the equal powers of gold and paper in purchases. Go to "market," we have been told, "and see "whether the pound note and a shilling will "not bring you as much meat or cloth as "a guinea. This was conclusive with unreflecting minds, and it quieted, or assisted to quiet, all those, who, though they were capable of discerning, dared not look the fearful truth in the face. I looked

*The report of this Trial, together with observations thereon, will be found in Vol. XVIII of the Political Register, page 161 and the following ones.

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it in the face rather more than eight years "value of gold and silver to its own level. ago, and strenuously laboured to prepare "Gold and silver will not purchase so my countrymen for what has now come, "much of any purchasable article at this and what is now coming, to pass. Upon " "day (March, 1796) as they would have one occasion, this standing delusive argu-" purchased if no paper had appeared, ment was made use of in answer to me: nor so much as they will in any counwhereupon I made the following remarks; "try of Europe, where there is no paper. "The objection of my other corres"How long this hanging together of paper "pondent has more plausibility. These are " and money will continue makes a new "his words: "I think the argument, that case; because it daily exposes the sys""Bank paper is depreciated, drawn "tem to sudden death, independent of the "" from the difference between the sterl- "natural death it would otherwise suffer." ing and the current value of a dollar, if Here he lays down the principle; and, if, ' "" it prove any thing, proves too much. instead of reviling his writings, the go""That guineas are depreciated you will vernment of England had lent a patient ""hardly insist, yet I would sturdily car to him, and taken a lesson from his su""maintain, from your premises, that perior understanding and experience, how ""they are, since a guinea will not purdifferent would have been our situation at ""chase so many dollars as it formerly this day! He proceeds thus: "I have just ""would."-Yes, but I do insist though," mentioned that paper in England has "that guineas are depreciated: not in their "intrinsic value, but in their value as currency, that is to say, in their power of" down of gold and silver money has purchasing commodities in this country. "created the appearance of paper money "When there is a depreciating paper in "keeping up. The same thing, and the any country, the current coin of that "same mistake, took place in America "country depreciates in its powers along "and in France, and continued for a con"with the paper, because it has a fixed "siderable time after the commencement "nominal value, and it can pass currently "of their system of paper; and the actual "for no more than an equal nominal value depreciation of money was hidden "in paper, until the paper is at an open "under that mistake. It was said in "discount. The metal is degraded by the "America, at that time, that every thing "society of the paper; but, there comes a "was becoming dear; but gold and silver "time when it will bear this degradation" could then buy those articles no cheaper "no longer; it then rises above its nomi- "than paper could; and therefore it was "nal value, or, in other words, the "not called depreciation. The idea of is at a discount." "dearness established itself for the idea " of depreciation. The same was the

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paper

"pulled down the value of gold and silver "to level with itself; and that this pulling

This was published so long ago as the "case in France. Though every thing 14th April, 1804. "There comes a time!” "rose in price soon after assignats apAye, and that time is now come. But," peared, yet those dear articles could be let me not be guilty of robbery, and es- "purchased no cheaper with gold and pecially of the Dead, and more especially silver, than with paper, and it was only of one whose writings, and upon this very "said that things were dear. The same subject too, as well as other subjects, I" is still the language in England. They formerly, through ignorance condemned. "call it dearness. But they will soon find I allude to the writings of PAINE, the "that it is an actual depreciation, and that abused, the reprobated, the anathematized," this depreciation is the effect of the TOM PAINE. In his work, from which I funding system; which by crowding have taken the perspicuous and impressive" such a continually-increasing mass of that serves me as a motto to this passage 66 paper into circulation, carries down the Letter, and the equal of which has seldom value of gold and silver with it. But gold dropped from the pen of any man; in" and silver will, in the long-run, revolt that work, PAINE thus exposes the delu-" against depreciation, and separate from sive argument of which I have just been speaking: "It is said in England, that "the value of paper keeps equal pace with "the value of gold and silver. But the "case is not rightly stated: for, the fact "is, that the paper has pulled down thre

"the value of paper; for the progress of all "such systems appears to be, that the

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paper will take the command in the be"ginning, and gold and silver in the end.”

How well is this expressed, and how

on the verge, nay, even in the gulph of Bankruptcy.” Paine said, that England would soon be in a worse situation than France as to her finances; and, in less than twelve months after he wrote his work, the Bank became unable to pay its notes in cash.

clearly the truth of it is now verified! | the subject; and, after reading several Yes: we talk about dearness; we talk of without coming to any thing like a clear high prices; we talk of things rising in notion of the real state of our currency, I palue; but, the fact is, that the change has took up the little essay of PAINE. Here I been in the money and not in the articles saw to the bottom at once. Here was no bought and sold; the articles remain the bubble, no mud to obstruct my view: the same in value, but the money, from its abun- stream was clear and strong: I saw the dance, has fallen in value. This has till of whole matter in its true light, and neither late been imperceptible to the mass of the pamphleteers nor speech-makers were, people, who were convinced of the non- after that, able to raise even a momentary depreciation by the argument built on the puzzle in my mind. PAINE not only told circumstance of the guinea and the paper me what would come to pass, but shewed being upon an equal footing at market. me, gave me convincing reasons, why it They did not perceive, that the paper had must come to pass; and he convinced me pulled down the gold and silver along with also, that it was my duty to endeavour to it; they did not perceive that the coin open the eyes of my countrymen to the was sliding by degrees out of the society truths which I myself had learnt from of the paper; they did not perceive that, him; because his reasoning taught me, in time, the coin would disappear altoge- that, the longer those truths remained ther; they did not perceive that an open hidden from their view, the more fatal contest would, at last, take place between must be the consequences. The occasion the guineas and the paper, and that, if the of this work of PAINE is worthy of notice. law came to the assistance of the paper, One of the motives of writing it was, as the coin would quit the country. Now, he says, at the close, to retaliate upon however, they do perceive this; the facts PITT, who, in speaking of the French Rehave all now been established in a way public, had said, that she was that seems, at last, to have produced conViction even in the minds of this "most "thinking people;" but, there is reason to fear, that this conviction will have come too late. How happy would it have been for this nation, if the opinions of Mr. PAINE, touching this subject, had produced, at the time, their wished-for effect! No man in England dared to publish his work. Any man who had published or sold it would have been punished as a seditious libeller. Yet, in my opinion, does that work; that little work, in the space of twenty-five pages, convey more useful knowledge upon this subject, and discover infinitely greater depth of thought and general powers of mind, than are to be found in all the pamphlets of the three score and two financiers, who, in this country, have, since I came into this jail, favoured the world with their opinions upon the state of our money system. The writings of these people would make twenty-five thick octavo volumes; and in all of them there is not so much power of mind discovered as in Paine's twenty-five pages. Yet, no man would dare to publish this little work in England. By accident I possess a copy that I brought from America, but which I never read till after my return to England. In 1803, when there was much apprehension of invasion, and when great complaints were made of the scarcity of change, I began to read some books upon

To return to the subject of depreciation, the fact has now been established in all sorts of ways. Gold coin has been, and is, sold at a premium ; a guinea will sell for 27 shillings, and the other coins of the realm in the same proportion; many persons in London have written upon their shop windows notifications that they will take the coin at a higher than the nominal value; in numerous cases a distinction is made in prices paid in coin and prices paid in paper. If these are not proofs of an actual depreciation of the paper, what, I should be glad to know will ever be admitted as proof of that fact? Indeed, there is no longer any doubt remaining upon the subject; and, therefore we will now proceed to take a view of the REMEDIES that have been proposed by our Rulers and Lawgivers, who, if they had followed the advice given in Paine's Second Part of the " RIGHTS OF MAN," instead of prosecuting the author, would not, I am convinced, have had to lament the present state of our finances.

As to REMEDIES, Gentlemen, I, in the

I can

"neas I am come again, and mean to take "them away too with 105 pounds of the 135 that you gave me for them."

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first of this series of Letters, stated to you, for them 135 pounds in their notes. And, that the Bullion Committee had recom- thus they must go on with other people. mended to the House of Commons to pass Having, at last, got a good lot of guineas a law to compel the Bank to pay their together, they begin paying their notes in notes in gold and silver at the end of two guineas. It is pretty evident that the vast years. This same proposition has been increase of paper occasioned by the pursince made in the House; but the House chase of the guineas would have caused a have resolved, that no such measure is ne- new and great depreciation of the paper, cessary. Those who opposed the proposi- and that, therefore, the moment the Bank tion said, that the Bank had not the gold, was open to demands in coin, people and could not get it, and that, therefore, could crowd to it in all directions. they could not pay in gold. This was a fancy the eager crowd now before me, very sufficient reason; and, I must con- pressing in from every quarter and corner; fess, that I was and am, as far as this and, amongst the very foremost and most goes, exactly of the opinion of these gen- eager, I think I see our friend MRS. DE tlemen. For, to what end pass such a YONGE." What do you do here, Madam," law, if the gold was not to be had? There I think I hear a dejected Director say, were several sensible men belonging to "what do you do here, you who sold us the Bullion Committee, and the gentle-" guineas but the other day?" "Aye, Sir," man who brought the measure forward in says the lady, "and for these very guithe House, is looked upon as a person of good understanding. It, therefore, appeared astonishing to me, that they should propose such a measure, seeing that I have never been able to discover any way whatever, by which gold could possibly return to the Bank and remain there in quantity sufficient to enable that Company to pay their notes in gold upon demand. To resume payments in gold would, indeed, be a complete remedy; but, to do that is, in my opinion, and, for many years past, has been, utterly impossible. By what means are the Bank Company to get the gold? We are told, that there is gold enough if the Bank Company will but purchase it. But, how are they to purchase it? What are they to give for it? Why their paper, to be sure; and, as it would require 27 shillings in their paper to purchase a guinea, this would be a most charming way of obtaining the means of paying off the paper with guineas. Let us take an instance. Suppose the Bank Company, by way preparing for cash payments, to be purchasing all the guineas they can find, and, in such case, they would, of course, apply to our old friend, MRS. DE YONGE, to whom, by the by, I here present my congratulations on the late decision of the judges in favour of her husband; the Bank Company would, I say, naturally apply to this good Lady, who, it being now decided that the old biting law does not forbid the buying and selling of bank notes and guineas, would drive with them as good a bargain as she could. Suppose them to buy 100 guineas of her at the present price, 27 shillings each, they would, of course, give her

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Need I say any more upon this subject? Is it not something monstrous to suppose, that it would be possible for the Bank Company to buy gold in quantity sufficient to be able to pay their notes in it? Well," say others, "but the Bank Company may lessen the quantity of its paper by narrowing its discounts." To be sure they might; and the only consequence of that would be, that the taxes would not be paid, and, of course, that the soldiers, the judges, and all the other persons paid by the public would have to go without pay. The discounts make a part of the system; and, if it be put a stop to, that is neither more nor less than one of the ways of totally destroying the system. To lessen the quantity of the paper is, therefore, impossible without producing ruin amongst all persons in trade, and without disabling the country to pay the taxes, at their present nominal amount.

But, suppose all other difficulties were got over, did these gentlemen of the Bullion Committee ever reflect upon the consequences of raising the value of money to what it was before the Bank Stoppage? Sir FRANCIS BURDETT, in his speech, during the Bullion Debate, told them of these consequences. He observed, and very justly, that, if money were, by any means, to be restored to the value it bore in the year 1796, the interest of the national Debt never could be paid by the people; that interest, he observed, was

now

£.35,000,000 a year; and, if the value | If I find that my health is injured by drink

ing brandy, the first thing I ought to do, in order to recover my health, would naturally be to leave off drinking brandy. What a fool, what worse than ideot, must that man be, who, feeling the fire burn his shins, still retains his seat. Yet, in this important national concern, never do you find any of our writers or legislators dwelling upon the cause of the evil, of which they appear so anxious to get rid. They tell us, indeed, that the depreciation of the paper is occasioned by its excessive quantity; but here they stop; they never go back to the cause of that excessive quantity of paper; or, if they do, they only speak of the interests of the Bank Company. If they did go back to the real cause, they would find it in the increase of the national Debt, to pay the interest of which, commonly called dividends, has required, has rendered absolutely necessary, the present quantity of paper. Indeed, one engenders the other. Every loan occasions a fresh batch of paper to pay the interest upon it; that fresh batch of paper causes a new depreciation and a new demand for paper again to make up in the quantity what has been lost in the quality. So that to talk of lessening the quantity of the paper, while the national Debt remains undiminished, does really seem to me something too absurd to be attributed to any man of sense. What, then, must it be to talk of lessening the quantity of paper, while the national Debt is increasing at an enormous rate, and while it is notorious that that Debt has been nearly doubled in amount during the last fourteen years; aye, while it is notorious, that, during the last fourteen years, that Debt has increased as much as the whole amount of it was before; or in other words, that, since 1796 as much money has been borrowed by the government as was borrowed in the whole

of money was brought back to the standard of 1796, this interest would instantly swell to £. 43,000,000 of money at the present value. All the grants, pensions, fixed emoluments, pay of soldiers, judges, chancellors, clerks, commissioners, and the rest would be raised, in point of real amount, in the same proportion; so that, it would be utterly impossible for taxes to such an amount to be raised. And, if it were possible, it would be frequently unjust; for, observe, all the money (making nearly one half of the national Debt) that has been borrowed since the Bank Company stopped paying in gold and silver; all the money borrowed since that time; all the loans made in the name of the public since that time; all the money thus lent to the public, as it is called, has been lent in depreciated paper; and, that which has been so lent this year has, if guineas are at 27 shillings, been lent in paper 27 shillings of which are worth no more than a guinea. And, are the people to be called upon to pay interest upon this money in a currency of which 21 shillings are worth a guinea? This would be so abominably unjust, that I wonder how any man like Mr. HORNER ever came to think of it. He expressly stated, that the paper was now worth only 15s. 10d. in the pound; of course he must have known, that this was the sort of thing of which the loans, for some years past, consisted; and yet, he would have had a law passed, the effect of which would have been to make the people pay interest for this money at the rate of twenty shillings in the pound. This is what never could have been submitted to: not because the people would have resisted; that is not what I mean; but, it is what could not have been carried into effect, and for the same reason that the man could not have two skins from the carcass of the same cat. If the quantity of the Bank paper were diminish-hundred years preceding? What must it ed, its value would rise; and, if its value rose, the value of the interest upon the national Debt would rise also; therefore, to enable the people to continue to pay the interest upon the Debt, the amount of the interest must be lessened, and what would that be but a partial sponge. So that, turn and twist the thing whatever way you will, you still find it the same; you still find, that the system must go on in all its parts, or be put a stop to altogether.

In most other cases, when men talk of a remedy, they advert to the cause of the coil.

be, then, to talk of lessening the quantity of the paper, while the national Debt, which was, and is, the cause of the paper, keeps on in this manner increasing? One really would think that such a proposition could have originated only in Bedlam. In 1798, the next year after the stoppage, the amount of Bank of England notes in cir. culation was, £13,331,752; and the amount of the interest upon the national Debt, in that year, was, £17,750,402. In 1809, the amount of the Bank of England Notes in circulation was, £21,249,980; and the amount of the interest upon the na

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