The Sun.
London, England, 1804-06-18 00:00:00

bank, managed with prudence, would only isita
its notes in proportion to the demand which may
be made for those notes, in exchange for good and
convertible securities, such as mercantile bills of
exchange payable at specific periods, of undoubted
respeCtability, founded upon real mercantile trans_
actions, upon Government securities, such as ex_
chequer bills, in the purchase of Spanish dollars, ur
other hullitm ; and the circumstance of the bank
notes of Ireland being demanded for such good and
eonVertible securities, I am of opinion, is a proof
that they are not too large in amount, sod that their
value has not depreciated. A country, such as I
consider the present situation of Leland to be,
threatened by foreign invasion or internal commo_
tions, naturally creates a disposition in its inhati_
tants to hoard or conceal the precious metals, whe-
ther in the shape of the current coin, or manufac.
Lured plate; to this disposition, I attribute the pre-
mium which I have heard is paid on guineas. Specie,
therefore, being entirely taken away as a medium
of circulation, I am of opinion, is also for that pur-
pose deprived of its uses ; naturally by this depri-
vation of part of the circulating medium, a vacuum
must be created in the channel of circulation, which
there only remains paper to supply. Another rea-
son why I am of opinion that bank notes have not
depreciated in value is, that the interest of mo-
ney has not been diminished.
May not notes be depreciated in the value of
their currency, although they are in no way alert.
ciated in the opinion of their security think
not, because, from a parity of reasoning, it might
be said that a guinea is a!s depreciated ; . because
comparing the quantity of gold which is contained
in a guinea, according to its mint price, it would
yield, according to the present market price of that
commodity, a premium.

Might not a greater quantity of notes being in
circulation than the country requires, cause their de-
preciation ?—Yes ; I have already stated that bank
notes can only maintain their value when they are
demanded in exchange for god and convertible se-
citifies.

Would they not continue to be so demanded,
supposing there was too great a quantity of them in
circulation, and no gold ?—Certainly,*a.tid upon the
same principle, that any commodity of tuerchandize
diminishes in value, when there is more than is re-
quired to supply the demand.
Would not, in such case, the value of such notes
diminish, there being more of them than is neces-
sary to supply the demand ?—Certainly.•
Must nut, of course, more of them be given for
any convertible security ?—Certainly.
Do you call a bill of exchange on London a con_
vertible security ?—Yes, because it can be sold, and
because, at the period of its maturity, it is paid.
Does it not follow thco in such case, that a
greater quantity of those notes must be given for the
bill of exchange ?—Yes; upon the, hypothesis, that
there are too great a number in circulation.
Supposing a forced issue of paper, would not the
surplus return to the issuers, and being redeemed,
would not the remainder be supported without any
depreciation; and would such redemption by Sink
of Ireland paper prevent any depreciation ?—I think
it would, because the Bank of Ireland, arriving at
the knowledge of their paper in. circulation being
more than would be adequate to supply the demand
for it, would cease to lend upon the secorities such
as I have stated.

May not an excessive issue of paper take place
from private Banks, although the issues from the
National Banks of either Country be not excessive ?
—Certainly, but the same rule of prudence which
would govern the liredors of the two National
Banks, would probably govern the condud of the
Directors of private Banks.
Do you think that the same confidence which
may be placed In the prudence of the Diredors of
the National Banks, can be safely placed in the
prudence of private Bankers, while it is competent
for every Individual, without establishment of any
fixed criterion of property as security to the Public,
to issue Bank Notes for any thing that he may
chuse to consider an adequate value for them ?
The private Banker is governed by his own inte-
rest ; the Diredors of a Public Bank are governed
by their public duty.
Have .there been great .fluduatiens in the ex.
change I—There hat e.
Have those fluduations been caused by ary cir-
cumstances not immediately affecting Trade ?—I
think the high exchange has been occasioned by
other causes than those 'affecting trade ; but the
finetnation, I think, has principally arisen from the
greater or less demand for Bills.
Is there any particular cause which will occasion
that demand to be more at one season than the
other ?—I think there is, particularly it) that season
when money is demanded in order to supply the
purchasers of salted provisions ; the Linen Markets
at specific periods ; and those periods when it is
known that the Treasury must draw twos) England.
Suppose the' Treasury left the power of drawing
to the Bank of Ireland upon the B ink of England
at their discretion, would that fluctuation be any
way likely to he remedied thereby ?-4 think
fund being invested in London, upon which the
Bank of Ireland might at all times have it in their
power to operate, would give them the ability of cot-
reding fluctuations of exchange.
Explain what Fund shJuld he invested, and how
it should be provided ?—The Fund which would he
the most convenient to invest, I should consider to
be the Government securities of England, bearing
interest, which at all times might be converted into
cash according to the demand, such. as Exchequer
Bills ; I take it for granted that there is a Fund in
England to be remitted to Ireland, which, in place
of remitting,' I would invest in the manner before
stated.