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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 case of De YONGE, who, under laws passed on for that purpose to any great extent. about two hundred years before such
things as bank notes were ever heard of, A call of this sort was made upon it in was convicted, about a year ago, of the 1797; and, as we have seen, and now crime of exchanging guineas for more feel, the Bank was unable to pay. Its than their nominal value in bank notes. * creditors, that is to say, the holders of its De Yonge moved for an arrest of judgment; notes, demanded their money; the Bank the case has been since argued before the flew to the minister Pitt for protection ; judges, and their decision thereon is shortly the minister, by an Order of Council, au- expected to be promulgated. Other persons thorized the Bank to refuse to pay its cre have been prosecuted in the same way, and ditors ; the Bank did refuse; the parlia upon the same ground, the effect of which ment passed an Act to shelter the Minister naturally has been to deter people from and the Bank Directors and all who had openly purchasing and selling guineas, been guilty of this violation of law, and, and also from tendering them generally at the same time enacted, that, for the in payment for more than their nominal fatare, the Bank should not be compel. value in paper. But, it is very notorious, lable to pay its notes in gold or silver. that the distinction is, nevertheless, made, After this memorable transaction, the full and that, in payments, men do lake gold and true history of which I have recorded | at its worth in comparison with the paper. in the foregoing Letters ; after this, the Two prices are not yet openly and genewbole concern assumed a new face and rally made; but, they exist partially, and indeed a new nature. The holder of a the extent of them is daily increasing. bank note could no longer go and demand payment of it in guineas; it was To this point, then, we are now arrived, impossible, therefore, that he should look and here we see proof, not of a depreciation upon 105 £. in notes as quite equal in of money of all sorts, arising merely from value to 100 guineas. Still, however, in that general plenty of money spoken of consequence of the Meetings and Combi- above ; but arising from the abundance, nations of the rich, and of the enormous or plenty, of paper, that is to say, the great influence of the government, to which quantity of the paper compared with that may be added the dread in every man of the coin. Hence we say, that the of being marked out as a Jacobin and bank notes have depreciated, or fallen in Leveller; in consequence of all these, value ; and, that there should be found and of the necessity of having something any human being to assert the contrary, to serve as money, the notes continued to or to believe, or affect to believe, the concirculate ; and, as the alarm subsided, the trary, is something that, were not the fact guinea returned and circulated in com before our eyes, no man could think pospany with them ; but, not with that cor sible: but, we live in times when wonder diallity that it used to do. It became no longer seems to form a feeling of the much less frequent in its appearance in mind. company with the notes ; it held itself aloof; seemed to demand a preference ; This state of things it was easy to forebut, not appearing to like to assume this see; but, the nation has been deluded by superiority over an old and familiar as the specious argument of the cqual powers sociate, and yet unwilling to pass for so of gold and paper in purchases. « Go to much less than its worth, it soon began to “i market,” we have been told, “and see keep away altogether, retiring to the “ whether the pound note and a shilling will chests of the hoarders, or going upon its “ not bring you as much meat or cloth as travels into foreign parts, until
such time “ a guinea.' This was conclusive with as it found itself duly estimated in Eng. unreflecting minds, and it quieted, or asland, which would naturally be when peo- sisted to quiet, all those, who, though they ple began to make openly a distinction be. were capable of discerning, dared not tween paper and coin.
look the fearful truth in the face. I looked That time arrived about two years ago ;
* The report of this Trial, together with but, no sooner was the distinction thus observations thereon, will be found in Vol. made, and acted upon, than the govern. XVIII of the Political Register, page 101 ment began to prosecute the actors, and and the following ones.
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 pur- different would have been our situation at " "chase so many dollars as it formerly this day! He proceeds thus: “I have just « ce would.” –Yes, but I do insist though, "mentioned that paper in England has " that guineas are depreciated: not in their “ pulled down the value of gold and silver “ intrinsic value, but in their value as cur « to level with itself; and that this pulling “ rency, 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 samne 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 paper
“ not called depreciation. The idea of * is at a discount.'
« dearness established itself for the idea
" of depreciation. . The same 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. 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, jas 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 passage
that serves me as a motto to this 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 “ the value of paper; for the progress of all speaking: “It is said in England, that “ such systems appears to be, that the " the value of paper keeps equal pace with paper will take the command in the be“the value of gold and silver. But the ginning, and gold and silver in the end.” “ case is not rightly stated : for, the fact " is, that the paper has pulled down the How well is this expressed, and how
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 salue; 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 bougbt 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, bas fallen in. value. This has till of whole matter in its true light, and neither lale 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. low 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
the that seems, at last, to have produced con verge, nay,even in the gulph of Bankrupicy." Fiction even in the minds of this “ most Paine said, that England would soon be in " thinking people;" but, there is reason to a worse situation than France as to her fear, that this conviction will have come too finances; and, in less than twelve months late. How happy would it have been for after he wrote his work, the Bank became this nation, if the opinions of Mr. Paine, unable to pay its notes in cash. touching this subject, had produced, at the time, their wished-for effect! No man To return to the subject of depreciation, in England dared to publish his work. the fact has now been established in all Any man who had published or sold it sorts of ways. Gold coin has been, and is, would have been punished as a seditious lic sold at a premium ; a guinea will sell for 27 beller. Yet, in my opinion, does that shillings, and the other coins of the realm work; that little work, in the space of in the same proportion ; many persons in twenty-five pages, convey more useful London have written upon their shop winknowledge upon this subject, and discover dows notifications that they will take the infinitely greater depth of thought and coin at a higher than the nominal value ; general powers of mind, than are to be in numerous cases a distinction is made found in all the pamphlets of the three score in prices paid in coin and prices paid in and two financiers, who, in this country, paper. If these are not proofs of an actual have, since I came into this jail, favoured depreciation of the paper, what, I should the world with their opinions upon the be glad to know will ever be admitted as state of our money system. The writings proof of that fact? Indeed, there is no of these people would make twenty-five longer any doubt remaining upon the subthick octavo volumes ; and in all of them ject; and, therefore we will now proceed there is not so much power of mind disco- to take a view of the REMEDIES that vered as in Paine's twenty-five pages. Yet, have been proposed by our Rulers and no man would dare to publish ihis little Lawgivers, who, if they had followed the work in England. By accident I possess advice given in Paine's Şecond Part of a copy that I brought from America, but the “ Rights of Man," instead of prowhich I never read till after my return to secuting the author, would not, I am conEngland. In 1803, when there was much vinced, have had to lament the present apprehension of invasion, and when great state of our finances. complaints were made of the scarcity of change, I began to read some books upon As to REMEDIES, Gentlemen, I, in the
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. I can 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 bere, 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 “ neas I am come again, and mean to take good understanding. It, therefore, ap- “ them away too with 105 pounds of the peared astonishing to me, that they “ 135 that you gave me for them.” should propose such a measure, seeing that I have never been able to discover Need I say any more upon this subject? any way whatever, by which gold could Is it not something monstrous to suppose, possibly return to the Bank and remain that it would be possible for the Bank there in quantity sufficient to enable that company to buy gold in quantity sufficient Company to pay their notes in gold upon to be able to pay their notes in it? demand. To resume payments in gold
Well,” say others, “ but the Bank Comwould, indeed, be a complete remedy; but, pany may lessen the quantity of its paper to do that is, in my opinion, and, for many “ by narrowing its discounts."
To be sure years past, has been, utterly impossible. they might; and the only consequence of By what means are the Bank Company that would be, that the taxes would not be to get the gold ? We are told, that there paid, and, of course, that the soldiers, the is gold enough if the Bank Company will judges, and all the other persons paid by but purchase it. But, how are they to the public would have to go without pay. purchase it? What are they to give for The discounts make a part of the system ;. it? Why their paper, to be sure; and, as and, if it be put a stop to, that is neither it would require 27 shillings in their paper more nor less than one of the ways of to purchase a guinea, this would be a most totally destroying the system. To lessen charming way of obtaining the means of the quantity of the paper is, therefore, impaying off the paper with guineas. Let us possible without producing ruin amongst take an instance. Suppose the Bank Com all persons in trade, and without disabling pany, by way preparing for cash pay- the country to pay the taxes, at their prements, to be purchasing all the guineas they sent nominal amount. can find, and, in such case, they would, of course, apply to our old friend, Mrs. De But, suppose all other difficulties were Yonge, to whom, by the by, I here pre- got over, did these gentlemen of the Bulsent my congratulations on ihe late deci- lion Committee ever seflect upon the consion of the judges in favour of her hus. sequences of raising the value of money to band; the Bank Company would, I say, what it was before the Bank Stoppage ? naturally apply to this good Lady, who, Sir Francis Burdett, in his speech, durit being now decided that the old biting ing the Bullion Debate, told them of these law does not forbid the buying and sello consequences. He observed, and very ing of bank notes and guineas, would justly, that, if money were, by any means, drive with them as good a bargain as she to be restored to the value it bore in the could. Suppose them to buy 100 gui- year 1796, the interest of the national neas of her at the present price, 27 shil. Debt never could be paid by the people; lings eacb, they would, of course, give her that interest, he observed, was now
£.35,000,000 a year; and, if the value If I find that my health is injured by drinkof money was brought tack to the standard ing brandy, the first thing I ought to do, of 1796, this interest would instantly swell in order to recover my health, would nato £. 43,000,000 of money at the present turally be to leave oft drinking brandy. value. All the grants, pensions, fixed What a fool, what worse than ideot, must emoluments, pay of soldiers, judges, chan that man be, who, feeling the fire burn his cellors, clerks, commissioners, and the rest shins, still retains his seat. Yet, in this imwould be raised, in point of real amount, portant national concern, never do you find in the same proportion; so that, it would any of our writers or legislators dwelling be utterly impossible for taxes to such an upon the cause of the evil, of which they amount to be raised. And, if it were pos- appear so anxious to get rid. They tellus, sible, it would be frequently unjust; for, indeed, that the depreciation of the paper is observe, all the money (making nearly occasioned by its crcessive quantity; but one half of the national Debt) that has here they stop; they never go back to been borrowed since the Bank Company the cause of that excessive quantity of stopped paying in gold and silver; all the paper; or, if they do, they only speak of money borrowed since that time; all the the interests of the Bank Company. If they loans made in the name of the public since did go back to the real cause, they would ibat time; all the money thus lent to the find it in the increase of the national Debt, to public, as it is called, has been lent in depre- pay the interest of which, commonly callciated paper ; and, that which has been so ed dividends, has required, has rendered lent this year has, if guineas are at 27 shil absolutely necessary, the present quantity of lings, been lent in paper 27 shillings of paper. Indeed, one engenders the other. which are worth no more than a guinea. Every loan occasions a fresh batch of And, are the people to be called upon to paper to pay the interest upon it; that pay interest upon this money in a curren fresh batch of paper causes a new deprecy of which 21 shillings are worth a guinea ? ciation and a new demand for paper This would be so abominably unjust, that again to make up in the quantity what I wonder how any man like Mr. Horner has been lost in the quality. So that to ever came to think of it. He expressly talk of lessening the quantity of the paper, stated, that the paper was now worih only while the national Debt remains undiminish155. 10d. in the pound; of course he must ed, does really seem to me something too have known, that this was the sort of thing absurd to be attributed to any man of of wbich the loans, for some years past, sense. What, then, must it be to talk of consisted ; and yet, he would liave had a lessening 'the quantity of paper, while the law passed, the effect of which would have national Debt is increasing at an enorbeen to make the people pay interest for mous rate, and while it is notorious that this money at the rate of twenty shillings in that Debt has been nearly doubled in the pound. This is what never could have amount during the last fourteen years; aye, been submitted to: not because the people while it is notorious, that, during the last would have resisted; that is not what I fourteen years, that Debt has increased as mean; but, it is what could not have been much as ihe whole amount of it was becarried into effect, and for the same rea fore; or in other words, that,'since 1796 son that the man could not have two skins as much money has been borrowed by the from the carcass of the same cat. If the government as was borrowed in the whole quantity of the Bank paper were diminish hundred years preceding? What must it ed, its value would rise; and, if its value be, then, to talk of lessening the quantity rose, the value of the interest upon the na. of the paper, while the national Debt, tional Debt would rise also ; therefore, to which was, and is, the cause of the paper, enable the people to continue to pay the keeps on in this manner increasing? One interest upon the Debt, the amount of the really would think that such a proposition interest must be lessened, and what would could have originated only in Bedlam. In that be but a partial sponge. So that, turn 1798, thenext year after the stoppage, the and twist the thing whatever way you will, amount of Bank of England notes in cir. you still find it the same; you still find, culation was, £13,33 1,752; and the that the system must go on in all its parts, amount of the interest upon the national or be put a stop to altogether.
Debt, in that year, was, £17,750,402. In
1809, the amount of the Bonk of England In most other cases, when men talk of a Notes in circulation was, £21,249,980; semedy, they advert to the cause of the coil. and the amount of the interest upon the na