The Sun.
London, England, 1832-08-24 00:00:00

REMARKS.

All the heads and items of this account which
relate to the creation of currency are taken from
official documents, and in these therefore there can
be no mistake ; and yet if we take merely into con-
sideration the notes of the Bank of England in
actual circulation during this period, the account I
have delivered in will appear to be greatly over-
charged, for the accounts of the circulation of the
Bank of England do not show an increase, between
April, 1823, and April, 1825, of more than
3,400,0001. But in all questions regarding the cur-
rency, it is the whole quantity of money that is to
be taken into consideration, and this includes as
well the deposits,--that is, the money at rest, and
capable at any moment of being called into action,
as the money in actual circulation. Money at rest,
and waiting for employment, reduces the rate of in-
terest, and gives birth to bubble schemes and foreign
loans; money in circulation applies to commodities;
the higher the prices of commodities, the greater
the quantity of money which is required for their
circulation, and the lower the prices of commodi-
ties, the less the quantity of money which is required
for their circulation ; and therefore, with any given
quantity of money and commodities the higher the
prices, the less money will be at rest, and the higher
the rate of interest ; and the lower the prices, the
more money will be at rest, and the lower also will
be the rate of interest. IR short, that a true judg-
ment may be made of the state and amount of the
currency, and its various fluctuations during the
period of 1824-25, we ought to be made acquainted
not only with the amount of Bank notes in circula-
tion, but with the stock of bullion in the coffers of
the Bank from month to month throughout the
whole period, and a monthly statement of the depo-
sits;--that is, of the claims for balances belonging
to individuals also throughout the whole period.
All this may be proved by one single example. The
Bank agreed to pay the dissentients in the reduc-
tion of the 4 per Cents. in 1824, and the amount to
be paid was 6,149,245/. Here, then, was a certain
number of men who had balances lying in the Bank to
the amount of upwards of 6,000,0001., for which they
might call when they pleased, and without a mo-
rn ant's notice or warning; let all of them call at
once, or some at one time and some at another, and
take their balances in gold and send it to the Con-
tinent, and it is clear that there will be a reduction
in the quantity of money to the extent of 6,000,0001.,
and yet the Bank notes in circulation will be the
same as before. Now what these men might have
done, every other man had the power to do who
had a balance at the Bank of England ; and then
while circulation remained unaffected, the quantity
of money would be reduced.
Having treated in a general way of the mischiefs
produced, arid the enormous losses which the public
have sustained, by our fraudulent and illusory scheme
of currency, I now crave permis•ion to deliver in to
the committee a statement of that part of the loss
which is subject to calculation. A, large mass of
destruction, which has been produced by those
frequent changes and alterations in the value of all
property to which the system gave rise, I have beers
obliged to leave untouched, it not being possible to

(PRICE 7D.)

devise it into shape, or bring it under any known
rule of computation.
Statement of the lotus which the public have sustained by
the operations of the Bank of England, during the period
from 1797 to 1826, inclusive—that is, from the Re-

striction Act to the bursting of the bubble schemes.

During a part of this period our currency con-
sisted entirely of paper; but from 1797 to 1800,
and perhaps a little longer, and again from 1819 to
1826, it was partly paper and partly metallic: and
therefore, if things are soberly and carefully laid
together, it will I believe be found, that the average
amount of paper money in this country, from 1797
to 1826, was much under 40,000,000/. I will
however take it at this amount; and then paper
being represented as a cheap currency, we must en-
deavour to search out and determine what was the
cost to the country of 40,000,000/. of paper cur-
rency during a period of 30 years; and then all
things duly weighed and considered, I believe the
following to be a true and faithful account

1. The first item of costs arises from a large addition to
the national debt in the period from 1797 to 1814, and
here the matter stands in this way.

The average price of gold from 1797 to 1814, in-
clusive, was 87.6545. per ounce, and therefore the
average value of the Bank note during the same pe-
riod was 179. ; and the money raised during
this period by loan-being 331,800,0001, it is clear
that the system of borrowing paper from the Bank,
instead of capital from the public (which was the
sole cause of the depreciation of the currency),
added 37,327,8001. to the national debt in money.
And the average rate of money at which interest
was raised during the war being .5/. Is. I Id, per
cent., and this being equal to a price of .58/. ss. 5d
for a 3 per cent. stock, it follows that the system
we acted upon created an additional debt of
63,476,5371. in 3 per cent. Consols, and Reduced :
and as no stock, without the consent of the owner,
is redeemable but at par, I might put down the
price of this stock at 100/.; but I have no wish to
exact to the full, and therefore I shall put down the
price at 84/., and this gives a loss of 53,320,291/.

2. The second item relates to the loan of 36,000,0001.
in 1815. This money was borrowed at a rate of interest
of 5/. 12s. 4d. per cent., being equal to a price of 531. Bs.
7.1. in a 3 per cent, stock ; and the average price of gold
throughout the year 1815 being 92.7975. per ounce, this
gave a loss of 5,788,894/. in money, which, at 531. Bs. 7d.
per cent., is equal to a capital of 10,834,708/. in Con-
sols or Reduced, and at 81 per cent. gives a loss of
9,101,1541.
3. The third item arises from this circumstance. The
money borrowed in the early part of the war, and previ-
ous to the restriction, and when the currency was in a
sound state, was raised at an average rate of interest of 41.
13s. sd. per cent. ; but the money borrowed after the
restriction, that is from 1797 to 1815, both inclusive, was
raised at an average rate of interest of Si. 4s. 3d. per cent.:
the difference therefore is 10s. 101. per cent., which is
equal to a capital of 18/. Is. Id. in a 3 per cent stork ;
and the sum borrowed during the period from 1797 to
1815 being 367,200,000/. i❑ money, it follows that the
additional interest paid after the depreciation of the cur-
rency caused an additional capital of 66,294,900/. 3 per
cent. stock to be created ; and which at the price of 84
gives a loss of 55,687,716/.
And now, in regard to the three preceding item's,
the case stands thus :—ln consequence of the de-
preciation of the currency, more money was bor-
rowed than would have been required if the cur-
rency had remained in a sound state; and from the
same cause this money was borrowed at an increased
rate of interest, and, therefore, and in the first place,
more stock was created because more money was
borrowed, and next, more stock was created because
the money was borrowed at an increased rate of
interest.

4. The fourth item arises from an increase during the
war of 14,000,000/. in the debt due from the Govern-
ment to the Bank. We borrow in bad money, and agree
to pay in good ; and ao, in plain terms, it stand thus :
We borrow 14,000,000/. at 17s. 9J. in the pound, and
pay it back at 20e. in the pound, and this gives a loss of
1,575,000/.

5. The fifth item relies upon the fact, that at the period
of the restriction there was at least 30,000,0001. and per-
haps 40,000,0001. of gold in this country, of which part
got immediately locked up ; and finally, towards the end
of the war, it was exported, being driven out by the enor-
mous issues of the Bank of England and the country
bankers. The lowest estimated amount of gold, therefore,
being 30,000,000/., and the highest 40,000,000/, this
gives a mean quantity of 35,000,000/. : and part being
driven out of circulation at one time, and the remainder at
another, it is being moderate to take an average of
20,000,0001. for the whole period ; and therefore I say,
that from 1797 to 1815, the public paid the Bank of
England and the country bankers interest for the use of
bad money, while they had 20,000,000/. of good money
which remained unemployed ; and the interest on
20,000,000/, during 18 years, at 5 per cent., is
18,000,000/.

6. The sixth item results from the failures of country
bankers, and this loss I set down at 30,000,0001.
7. The seventh item proceeds from the bubble compa-
nies and foreign loans, and will speculation, of 1824 and
1825, and the least we can put down for the loss on this
account is 30,000,000/.
8. The last item derives from the loss to the nation in
its foreign trade by our fraudulent, vacillating paper
system. Sometimes it gives undue encouragement to im-
portation, and this produces a glut of foreign commodities
in the home market; at other times it gives undue encou-
ragement to exportation, and this produces a glut of
English commodities in the foreign market. Now the
losses on this account during the period under consideration,
though they cannot be computed with accuracy, must
have been enormous, and to estimate them at 1,000,000/.
per annum, is to keep greatly within the mark ; and
therefore I put down 30,000,000/.
And now, by casting up the different items, I find
that paper is so cheap a currency, that this nation
was supplied with 40,000,0001. of it during a period
of 30 years, for the very moderate sum total of
227,684,161/. And then I say nothing of those
feequent changes and alternations in the value of all
property of which the system was the
.well-spring,
and which must necessarily have been destructive
of our best and dearest interests, depraving the mo-
rals of the public, leading men astray from the tried
sober paths of industry and frugality, and converting
all trade into gambling.

And now we have to calculate the expense of
40,000,0001. of metallic currency.
Taking the two metals together, the expense of
coining gold and silver is about a quarter per cent.;
and, from various experiments made in 1802, by the
officers of the French Mint, it results, that the loss
of gold and silver money, by wear and tear,—that
is, by circulation or friction,—amounts to about 81
per cent. in a century; and this is confirmed by se-
veral curious experiments made by Mr. Hatchett
and Mr. Cavendish of the Royal Society (see Phi-
losophical Transactions, 1803), at the request of the
Earl of Liverpool, and the result of which is, that
the waste of the precious metals by friction is very
trifling.
And therefore it appears that the waste of a me-
tallic currency by circulation may be repaired six
times in a century; that is, in order to keep the
currency in its original purity and integrity, there
may be six recoinages ; and yet the expense of coin-
ing, and the loss by wear and tear, will not amount
to more than 10 per cent, in a century, or 1-10th
per cent. per annum : and then we have the follow-
ing results :-
1. That the expense of 40,000,0001. of metallic cur-
rency during 30 years would be, first, 40,000,0001. for
the cost of the material, and next 1,200,0001. to defray
the expense of coining and recoining, and the loss by wear
and tear; and then the currency would be as sound as at
the beginning. Now, the first outlay of 40,000,0001.
would be no loss whatever, because we should have ac-
quired a real value, and whatever we had given for iL
might always be had in return. Whereas, on the other
hand, it appears that during the same period of time, we
have expendtd 2t7,684,161/. ou paper, and have not the

least value to show for our money. 50-04s7thetrat,14p:
the one hand, being 1,200,000/., and the 10i5704
227,654,161!., it follows from the very fact, arid our, orri34°
proper experience, that a paper currency is 190 timedC
dearer than a metallic currency.
2. That the sum of 227,684,161!. which we expended
in the course of 30 years for 40,000,000/. of paper
currency, would have sufficed to defray the expense of
40,000,0001. of metallic currency during a period of about
5,700 years.
Now I do not believe that one particle of tl.is
statement can be contradicted; and, therefore, with
all these facts before us, it is quite impossible to
contend in favour of a paper currency; because,
though a man might be able to use many arguments,
all tending to prove a priori, that paper is the best
and cheapest of all currencies; yet if the fact be
against him, all his arguments go for nothing, be-
cause that can never be true in theory which is false
in fact; and it is the same as if a man were to show
by many plausible arguments, which peradventure
another might not be able to contradict, that on a
particular day, which he should name, a certain
thing would happen, yet if, when the day came, the
thing were not to happen, all his arguments would
be of no avail. But the theory itself is false, and it
never can be shown even a priori, that paper is a
cheap currency. To say that paper is cheaper than
gold, is simply to state a fact with which all are ac-
quainted ; but from this fact, it will not follow that
paper money is cheaper than gold money, and for
this reason—money is not a sign, but an equivalent,
and therefore paper money is no money at all, it is
not an equivalent,—but merely the promise of an
equivalent;--it is not money, but the promise of
money; and it is by taking the promise for the per-
formance—the shadow for the substance—that we
get cheated. And that paper money, so far from
being the cheapest, turns out de facto to be the
dearest money in the world—a complete and perfect
instrument of fraud and deception, and to this all
history bears witness.

I have said that no item in the preceding state-
ment can be contradicted; there are, however, one
or two things which require a little explanation.
The fifth item relies in some degree upon the fact,
that at the period of the restriction there was
30,000,0001., and perhaps 40,000,000/. of gold in
this country ; and this fact I make out after the fol-
lowing manner :
At the period of the accession of George 111., in
1760, there was comparatively but little paper in
circulation, either of the Bank of England or the
country bankers; the circulation being therefore
principally metallic, there could not have been less
than 2.5,000,000/. of gold.
From 1760 to 1797, the value of the gold coined
at the Mint was .57,274,6721.; during the year
1797, the gold coined at the M:nt was of the value
of 2,000,2971.; and during the year 1798 it was of
the value of 2,967,504/. Add now to all this the
quantity in the country in 1760, and you will have
a total quantity of 87,292,4731.; and with all this
before us, it is difficult to imagine that there was not
at least 40,000,0001. of gold remaining in 1797.
And if it be asked why I include the coinings of
1797 and 1798, this is done for a very obvious rea-
son. During a great part of 1797, the price of gold
was below the Mint price; during the remainder of
the year, and throughout the whole of 1798, it did
not exceed the Mint price; and therefore whatever
was coined during the years 1797 and 1798, must
be considered as so much to be added to the stock
existing in the beginning of 1797.
Now take another fact. Notwithstanding the
high price of guineas, and the encouragement to their
sale and exportation during the war, there were still
a great number of guineas left in the country, not
only after the war, but even after the resumption of
cash payments ; for it appears that between 1821
and 1829 the guineas paid into the Bank, to be ex-
changed for sovereigns, amounted in value to
.5,132,6061., and as no guineas were coined at the
Mint after 1813, it is plain that these guineas paid
in to the Bank were part of the gold coinage of the
country which had been formerly driven out of cir-
culation by the paper of the Bank of England and
the country bankers, and had remained unemployed
during the war.

Upon every ground, then, I am warranted in con-
cluding that there was 40,000,000/. of gold in this
country at the period of the restriction : part of this
was driven out of circulation at one time and part at
another, and towards the end of the war an immense

amount, w hich had been lying unemployed, was ex-
ported ; and this 1 know of my own knowledge, for
being at Paris in the year 1812,1 then learned front
the best authority, that up to the year 1809-the
quantity of guineas received front England had not
been very considerable; but that after this period,
and particularly during the years 1810, 1811, and
the early part of .1812, the quantity was enormous.
And now take this remark small matter of six-
pence or a shilling in the value of a guinea above
paper will drive it out of circulation, and cause it to be
locked up; but this difference would not suffice dur-
ing the war to cause it to be exported, when the
charges of transport were great, and when there
were also heavy penalties attached to the exporta-
tion of the coin of the realm.
From all that has been said, it is therefore ma-
nifest that during a considerable period of time the
people of this country paid the Bank of England
and the country bankers for the use of bad money,
while they had good money of their own which re-
mained unemployed. Arid now take a case. The
quantity of specie existing in Europe is probably of
the value of 300,000,0004; and now if all the people
of Europe were to be as precisely mad as we were
during the war, and agree to lock up this specie,
and circulate their commodities by means of paper,
it is evident that there would be 300,000,000/. of
specie which would remain unemployed; and then
supposing the paper to be issued as ours was, at 5
per cent, interest, it is equally plain that the owners
of these 300,000,0004, that is, the European pub-
lic, would have to pay 15,000,000/. per annum for
the use of bad money, while they had good money
which remained idle. A new way to get rich.
Another point requires explanation : I have stated
(and the thing is past all doubt) that at least
30,000,000/, have been lost by the failures of
country bankers, and yet I have ascribed all losses,
of what nature and description soever, solely to the
Bank of England; and for this I have ground and
occasion. Every evil, before it can be cured, must
be traced to its source, and in all sound reasoning,
we must travel onwards from cause to cause, till we
arrive at the first cause; arid here the first cause is
the Bank of England, it being impossible that the
country bankers could have inundated the country
with paper, if it had not been for the great increase
in the circulation of the Bank of England. Look
at the fact.

In the year 1797 the average circulation of the
Bank of England was 10,329,16.51.; it went on
tiradually increasing, and so that in the year 1811
the average circulation of the Bank of England was
26,901,0001.; and therefore it was that between
1797 and 1814, the number of country bankers had
increased from 230 to 878, and that the country cir-
culation in 1811 stood at 22,709,0001. Who but
the Bank of England occasioned all this ?