issued silver tokens for three shillings, and for one shilling and sixpence. By an Act passed in 1812, the counterfeiting these dollars and tokens was liable to a punishment of fourteen years' transportation.

By 44 Geo. III. c. 98, the following duties were imposed upon the notes of country bankers:

£ 8. d.

0 0 3

1

1 not exceeding £2 2s.

006

2 2

These duties continued until the year 1808.

1805. The bank proprietors received another bonus of five per cent. in cash.

1806. Another bonus of five per cent. in cash.

1807. The dividend on bank stock was raised from seven to ten per cent., at which rate it continued until the year 1823.

1808. The allowance from the government to the bank for managing the public debt, reduced from 4507. a million to 3407. a million, on six hundred millions of the debt, and to 3007. a million on all that it exceeded that sum. This was exclusive of some separate allowances on annuities, &c.

By 48 Geo. III. c. 149, the following duties were imposed upon country bank notes:

Not exceeding £1 1s.

Exceeding. . 1 1 not exceeding £2 2s.

£ 8. d.

004

008

These duties remained the same until the year 1815.

1810. THE BULLION COMMITTEE, appointed by the House of Commons for the purpose of inquiring into the causes of the high price of gold bullion, and its effect on the circulating medium.

The committee delivered a very long report, in which they discussed a variety of matters connected with the currency, and concluded by recommending that the bank should resume cash payments at the end of two years. The following are extracts:

"Your committee have found that the price of gold bullion which, by

the regulation of his Majesty's mint, is 37. 17s. 101d. per ounce of standard fineness, was, during the years 1806, 1807, and 1808, as high as 47. in the market. Towards the year of 1808 it began to advance very rapidly, and continued very high during the whole year 1809, the market price of standard gold fluctuating from 47. 9s. to 47. 12s. per oz. The market price at 4! 10s. is about 151 per cent. above the mint price.

"Your committee have likewise found, that towards the end of the year 1803 the exchanges with the continent became very unfavourable to this country, and continued still more unfavourable through the whole of 1809, and the three first months of the present year.

"Mr. Whitmore, the late governor of the bank, stated to the committee, that in regulating the general amounts of the loans and discounts, he did 'not advert to the circumstance of the exchanges, it appearing upon a reference to the amount of our notes in circulation, and the course of the exchange, that they frequently have no connection.'

"Mr. Pearse, now governor of the bank, agreed with Mr. Whitmore in this account of the practice of the bank, and expressed his full concurrence in the same opinion. Mr. PEARSE,-- In considering this subject with reference to the manner in which bank notes are issued, resulting from the applications made for discounts to supply the necessary want of bank notes, by which their issue in amount is so controlled that it can never amount to an excess; I cannot see how the amount of bank notes issued can operate upon the price of bullion, or the state of exchanges; and therefore I am individually of opinion that the price of bullion or the state of the exchanges can never be a reason for lessening the amount of bank notes to be issued, always understanding the control which I have already described.'

"The bank directors, as well as some of the merchants who have been examined, showed a great anxiety to state to your committee a doctrine, of the truth of which they professed themselves to be most thoroughly convinced; that there can be no possible excess in the issue of Bank of England paper, so long as the advances in which it is issued are made upon the principles which at present guide the conduct of the directors -that is, so long as the discount of mercantile bills is confined to paper of undoubted solidity, arising out of real commercial transactions, and payable at short and fixed periods. That the discounts should be made only upon bills growing out of real commercial transactions, and falling due in a fixed and short period, are sound and well established principles. But that while the bank is restrained from paying in specie, there need be no other limits to the issue of their paper than what is fixed by such rules of discount; and that during the suspension of cash payments, the discount of good bills falling due at short periods cannot lead to any excess in the amount of bank paper in circulation, appears to your committee to be a doctrine wholly erroneous in principle, and pregnant with dangerous consequences in practice.

"Upon a review of all the facts and reasonings, which have been submitted to the consideration of your committee in the course of this inquiry, they have formed an opinion, which they submit to the HouseThat there is at present an excess in the paper circulation of this country,

of which the most unequivocal symptom is the very high price of bullion; and, next to that, the low state of the continental exchanges: that this excess is to be ascribed to the want of a sufficient check and control in the issues of paper from the Bank of England, and originally to the suspension of cash payments, which removed the natural and true control.

"Your committee would suggest, that the restriction on cash payments cannot safely be removed at an earlier period than two years from the present time; but your committee are of opinion that early provision ought to be made by Parliament for terminating, at the end of that period, the operation of the several statutes which have imposed and continue that restriction."

This report was delivered late in the session, and was not taken into consideration by the House until the following year.

1811. The commercial distress of the country had become so great, that Parliament authorized the sum of six millions to be advanced to merchants on their giving sufficient security; but such had been the fall in the price of mercantile property, that not many could give the required security, and bankruptcies were numerous. Whether this distress arose from any preparations of the bank to return to cash payments, from the American embargo, or from Buonaparte's Berlin and Milan decrees, was a matter of much controversy. From the accounts since published, it does not appear that the bank had taken any measures to increase their stock of gold; but during the years 1810, 1811, and 1812, they considerably reduced their private securities and increased the amount of their public securities. Thus on the last day of February, 1810, their public securities were 14,322,6347., and their private securities 21,055,9467. On the same day in 1813, their public securities were 25,036,6261., and their private securities 12.894,3247. This progressive reduction of the discounts no doubt occasioned great distress, though it was in some degree counteracted by an increase in the same period of above two millions in the circulation.

The report of the Bullion Committee was taken into consideration by the House of Commons, and after much discussion rejected. Instead of the measures recommended by the committee, the House adopted certain resolutions proposed by Mr. Vansittart (afterwards Lord Bexley), declaring that the value of bank notes was not depreciated, but that the value of gold was enhanced; and that the political and commercial relations of Great Britain with foreign states were sufficient to

account for the unfavourable state of the foreign exchanges and the high price of bullion.*

July 24. Lord Stanhope's Act passed. This Act (51 Geo. III. c. 127) is entitled, "An Act for making more effectual provision for preventing the current gold coin of the realm from being paid or accepted for a greater value than the current value of such coin; for preventing any note or bill of the Governor and Company of the Bank of England from being received for any smaller sum than the sum therein specified; and for staying proceedings upon any distress by tender of such notes." It enacts that the taking of gold coin at more than its value, or Bank of England notes for less than their value, shall be deemed a misdemeanour. This Act was to be in force until the 25th of March, 1812. It was introduced by the Earl of Stanhope, in consequence of the following notice having been addressed by Lord King to his tenantry:

"By lease, dated 1802, you have contracted to pay the annual rent of 471. 5s. in good and lawful money of Great Britain. In consequence of the late great depreciation of paper money, I can no longer accept any bank notes at their nominal value in payment or satisfaction of an old contract. I must, therefore, desire you to provide for the payment of your rent in the legal gold coin of the realm; at the same time, having no other object than to secure payment of the real intrinsic value of the same, stipulated by agreement, and being desirous to avoid giving you any unnecessary trouble, I shall be willing to receive payment in either of the manners following, according to your option:-1st. By payment in guineas: 2nd. If guineas cannot be procured, by a payment in Portugal gold coin, equal in weight to the number of guineas requisite to discharge the rent: 3rd. By a payment in bank paper, of a sum sufficient to purchase (at the present market price) the weight of standard gold requisite to discharge the rent. The alteration in the value of paper money is estimated in this manner: the price of gold, in 1802, the year of your agreement, was 47. an ounce; the present market price is 4. 14s., arising from the diminished value of paper. In that proportion an addition of 177. 10s. per cent. in paper money will be required as the equivalent for the payment of rent in paper."†

Thus repudiating the principles laid down in the report, now universaliy accepted, that when the market or paper price of gold bullion exceeds the mint price (37. 178. 104d.), it is not gol! which has risen in value, but paper which has become depreciated; that the difference between the two prices is the measure of this depreciation; and the only sound mode of rectifying the exchanges is the timely contraction of its discounts by the bank as the drain of bullion for expor tation sets in, the creation and confirmation of public confidence by liberality at seasons of severe pressure, and enlargement of its issues as the exchanges become favourable.

↑ A cutting sarcasm on the resolutions proposed and carried by Mr. Vansittart.

1812. "An Act passed for the further prevention of the counterfeiting of silver tokens issued by the Governor and Company of the Bank of England, called dollars, and of silver pieces issued and circulated by the said Governor and Company, called tokens, and for the further prevention of frauds practised by the imitation of the notes or bills of the said Governor and Company" (52 Geo. III. c. 138).

Lord Stanhope's Act continued, by 52 Geo. III. c. 5, until three months after the commencement of the next session of parliament.

1814. Lord Stanhope's Act revived and continued, by 54 Geo. III. c. 52, during the continuance of the Bank Restriction Act.

1815. The following stamp duties were imposed upon the notes of country bankers (55 Geo. III. c. 184):-·

1815. Peace being restored, the Bank Restriction Act would have expired six months afterwards, but it was continued by a new Act until the 5th July, 1816.

1816. The Bank Restriction Act, continued from July, 1816, to July, 1818.

The bank was authorized to increase its capital from 11,642,4007. to 14,553,000l., being an addition of twenty-five per cent. to the stock of the several proprietors. This addition was made out of the surplus profits without any further call (56) Geo. III. c. 96). In consideration of obtaining this privilege, the bank agreed to lend the government the sum of 3,000,0007. at three per cent.

1817. April 17. The bank gave notice that on and after the second day of May then next ensuing, they would pay cash for all notes of 17. and 27. value dated prior to the first day of January, 1816, or exchange them for new notes of the same value, at the option of the holders.