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try, is notorious to all the world. But years, seen the quantity of paper-money while we are all acquainted with the rapidly increase ; or in other words, you fact, and while many of us are most have, day after day, seen less and less sensibly feeling the effects, scarcely a of gold and silver appear in payments, man amongst us takes the trouble to and of course more and more of paperinquire into the cause ; yet, unless the money. But it was not till the year cause be ascertained, how are we toj 1797 that the paper-money •began to apply or to judge of a remedy! We see increase so very first. It was then that the country abounding with paper- the two and one pound notes were first money; we see every man's hand full made by the Bank of England. It was of it; we frequently talk of it as a then, in short, that paper-money bestrange thing, and a great evil ; but came completely predominant. But, you never do we inquire into the cause of it. will naturally ask me,

" What was the There are few of you who cannot re- cause of that?" The cause was, that the member the time, when there was Bank of England stopped paying its scarcely ever seen a bank-note among notes in gold and silver. What! stop tradesmen and farmers. I can remember paying its notes ? Refuse to pay its when this was the case ; and when the promissory notes? The Bank of Engfarmers in my country hardly ever saw land, when its notes were presented, a bank-note, except when they sold refused to pay them? Yes : and what is their hops at Weyhill fair. People in more, an Act of Parliament brought in those days used to carry little bags to by Pitt, was passed to protect the Bank put their money in, instead of the paste- of Englandi against the legal conseboard or leather cases that they now quences of such refusal. So that the carry. If you look back, and take a people, who held promissory notes of little time to think, you will trace the the Bank, and who had perhaps given gradual increase of paper-money, and gold or silver for them, when they went the like decrease of gold and silver mo- to the Bank for payment, were told, ney. At first there were no bank-notes that they could have no gold or silver, under twenty pounds ; next they came but that they might have other notes, to fifteen pounds; next to ten pounds : more puper, if they pleased, in exchange at the beginning of the last war, they for the paper they held in their hands came to five pounds; and before the and tendered for payment. From that end of it, they came down to two and time to this, the Act of Parliament, to one pounds. How long it will be authorising the Bank of England to before they come down to parts of a refuse to pay its notes in gold and pound, it would, perhaps, be difficult to silver, has been in force. At first it say; but in Kent, at least, there are was passed for three months ; next, till country notes in circulation to an the Parliament should meet again ; then amount so low as that of seven shillings. it was to last to the end of the war ; It is the cause of this that is interesting then, when peace came, it was continued to us; the cause of this change in our just for a year, till things should be money, and in the prices of goods of all settled; then, as things were not quite sorts and of labour. All of you who are settled, it was continued till Parliament forty years of age can remember when should meet again ; and, as this present the price of the gallon loaf used to be war had begun by that time, the Act about ten pence or a shilling, instead of was made to continue till six months two shillings and sixpence or two shil- after the next peace. lings and ten-pence, as it now is. The reasons given upon the different These effects strike you. You talk of occasions, it will be very material to thern every day; but the cause of them notice : for it is this stoppage in the you seldom if ever either talk or think payment of gold and silver at the Bank of: and it is to this cause that I am now of England upon which the whole quesendeavouring to draw your attention. tion turns. Everything hangs upon

You have, during the last seventeen this, and when we come to examine

that part of the report which treats of son satisfactorily upon the means of the Bank's reviving its payments in bringing gold and silver back again into gold and silver, we shall find it of great circulation. use to us to recur to the reasons, the Some people suppose, that paper divers, the manifold reasons, that were always made a part of the currency, or given at different times for suspending common money, of England. They those payments. Since that suspension seem to regard the Bank of England as took place, you have seen the gold and being as old as the Church of England, silver disappear ; you have seen the at least, and some of them appear to paper has supplied the place of gold; have full as much veneration for it. The paper-money makers have set up all truth is, however, that the Bank of over the kingdom ; and might not this England is a mere human institution, well happen, when, to pay paper-money, arising out of causes having nothing nothing more than paper-money was miraculous, or supernatural, about them; required? But the reasons given for and that both the institution and the this measure of suspension ; the reasons agents who carry it on, are as mortal as given for the passing of an Act of Par- any other thing and any other men, in liament to protect the Bank of England this or in any other country. The Bank, against the demands of its creditors are as it is called, had its origin in the year seldom recurred to, though, as you will 1694, that is, a hundred and sixteen years presently see, without recurring to those ago; and it arose thus : the then King, reasons, and without ascertaining the William III., who had come from Holtrue cause of the passing of that Act of land, had begun a war against France, Parliament, we caonot form so good a and, wanting money to carry it on, an judgment relative to the remedy now act was passed (which act was the 20th proposed ; namely, that of the Bank of of the 5th year of his reign) to invite England's reviving its payments in gold people to make voluntary advances to and silver. This is the remedy which the Government of the sum of 1,500,000 the bullion committee propose ; and, pounds, and for securing the payment you will say, a very good remedy it is ; of the interest, and also for securing the a very good remedy indeed; for people re-payment of the principal, taxes were who have, for so long a time, not paid laid upon beer, ale, and other liquors. their notes in gold and silver, to begin Upon condition of 1,200,0001. of this to pay their notes in gold and silver, is money being advanced within a certain a very good remedy ; but the thing to time, the subscribers to the loan were ascertain, is, can the remedy be applied to be incorporated; and, as the money This is the question for us to discuss. It was advanced in due time, the incorporequired nobody to tell us, that paying in ration took place, and the lenders of the gold and silver would be an effectual money were formed into a trading comremedy for the evils arising from not pany, called, THE GOVERNOR AND paying in gold and silver ; but, it required | COMPANY OF The Bank of England." much more than I have yet heard to Out of this, and other sums borrowed convince me, that to pay again in gold by the Government in the way of mortand silver was pussible.

gage upon the taxes, there grew up a The chief object of our inquiries being thing called the Stocks, or the Funds this: Whether it be possible, without a (of which we will speak hereafter); but lotal destruction of the paper-money the Bank Company remained under its system, to restore gold and si'ver to cir- primitive name, and as the debt of the culation amonyst us; this being the nation increased, this Company increased chief object of our inquiries, we should in riches and in consequence. first ascertain how the gold and silver Thus, you see, and it is well worthy were driven out of circulation, and had of your aitention, the Bank had its rise their place supplied by paper-money; for, in war and taxation. But, we must unless we get at a clear view of this, it reserve reflections of this sort for other will be next to impossible for us to rea- occasions, and go on with our inquiries how gold and silver have been driven out these opinions of the people, relative to of circulation in this country, or in other the Bank, were not altogether unfoundwords, how it came to pass that so much ed; for, though no bit of paper, or of paper-money got afloat.

anything which has no value in itself, The Act of Parliament which I have can be, in fact, so good as a bit of gold : just referred to, points out the manner still, if it will at any moment whenever in which the Bank Company shall carry the holder pleases, bring him gold and on their trade, and the articles in which silver to the amount written upon it, it they shall trade, allowing them, amongst is very nearly as good as gold and silother things, to trade in gold, silver, ver ; and, at the time of which we are bills of exchange, and other things, speaking, this was the case with the * under certain restrictions ; but, as to promissory notes of the Bank Company. what are called bank-notes, the company But it must be evident, that though the ' was not empowered to issue any such in Company were ready at the time now any other why, or upon any other foot- referred to, to pay their notes in gold ing, than merely as promissory notes, and silver, they had never in their for the amount of which, in the coin of money-chests a sufficiency of gold and the country, they were liable to be sued silver to pay off all their notes, if they and arrested. Having, however, a had been presented all at once. This greater credit than any other individuals, must be evident to every man ; because or company of individuals, the Bank if the Bank Company kept locked up as Company issued notes to a greater much gold and silver as their notes amount; and, which was something new amounted to, they could get nothing by in England, they were made payable, issuing their notes, and might full as not to any particular person, or his well have sent out their gold and silver. order, and not at any particular time; A farmer, for instance, who is generally but to the bearer, and on demand. These using a hundred pounds of money to characteristics, which distinguished the pay his workmen, might lend the hunpromissory notes of the Bank of Eng-dred pounds and get interest for it, if he land from all other promissory notes, could persuade his workmen to take gave the people greater contidence in promissory notes of his own drawing them; and, as the Bank Company were instead of money, and, if he were sure always ready to pay the notes in gold that these promissory notes would not and silver, when presented for payment be brought in for payment; but if this the notes hecame in time to be looked was not the case, he would be comupon as being as good as gold and silver. pelled to keep the hundred pounds in Hence caine our country sayings:—“As his drawer ready to give to those who good as the Bank.As solid as the did not like to keep his promissory Bank:" and the like. Yet the Bank was, notes: and, in such case, it is clear, as we have seen, merely a company of that the money would be of no use to mortal men, formed into an association him, and that he might full as well of traders; and their notes nothing more have none of his notes out. than written promises to pay the bearer Just so with the Bank Company, so much money in gold or silver. who, at no time, could have in hand

We used to have other sayings about gold and silver enough to pay off all the Bank, such as As rich as the their notes at once; nor was this necesBank; ” “ All the gold in the Bank;" sary as long as the people regarded and such like, always conveying a no- those notes as being equally good with tion, that the Bank was a place, and a gold and silver. But it is clear, that place, too, where there were great heaps this opinion of the goodness of the Comof money. As long as the Company pany's notes, or rather, the feeling of were ready and willing to pay, and did confidence, or, still more properly peractually pay, their notes in gold and haps, the absence of all suspicion with silver to all those persons who wished respect to them, must, in a great degree, to have gold and silver, it is clear that depend upon the quantity of notes seen in circulation compared with the quan- inquire into the cause of the coin's not tity of gold and silver seen in circulation. increasing with the increase of paper, At first, the quantity of notes was very suffice it to say, that such was the fact. small indeed, the increase of this quan- Year after year we saw more of banktity was, for the first twenty years, very notes and less of gold and silver ; till, slow; and, though it became more in time, such was the quantity of bankrapid in the next twenty years, the notes required to meet the purposes of quantity does not appear to have been gold and silver in the payment of the large till the war which took place in interest of the still-increasing debt, and 1753, before which time the Bank Com- in the payment of the taxes, that many pany put out no notes under twenty other banks were opened, and they also pounds in amount. Then it was that issued their promissory notes.

The they began to put out afteen-pound Bank Company's notes, which had notes, and afterwards, but during the never before been made for less sums same war, ten-pound notes. During all than ten pounds, were, soon after the this time, loans, in every war, had been beginning of Pitt's war, in 1793, issued made by the Government. That is to for five pounds, after which it was not say, the Government had borrowed to be supposed, that people could have money of individuals, in the same way the same opinion of bank-notes that as above-mentioned, in the year 1694. they formerly had. Every part of the The money thus borrowed was never people, except the very poorest of them, paid off, but was suffered to remain at now, occasionally at least, possessed interest, and was, as it is now, called bank-uotes. Rents, salaries, yearly the NATIONAL DEBT, the interest upon wages, all sums above five pounds, were which is annually paid out of the taxes now paid in bank-notes ; and, the Goraised upon the people. As this debt vernment itself was now paid its taxes went on increasing, the bank-notes in this same sort of currency. went on increasing, as indeed it is evi- In such a state of things it was quite dent they must, seeing that the interest impossible that people should not begin of the debt was, as it still is and must to perceive that gold and silver were be, paid in bank-notes. Why not pay better than bank-notes; and that they it in gold?

should not be more desirous of possesIt is not simply the quantity of bank- sing the former than the latter; and, notes that are put into circulation, the moment this is the case, the bankwhich will excite alarm as to their so- ing system must begin to tremble ; for, lidity; but it is that quantity, if it be as the notes are payable to the bearer, great, compared with the quantity of and payable on demand, it is very gold and silver seen in circulation. If, certain that no man, with such a preas the bank-notes increased, the circu- ference in his mind, will keep in his lating gold and silver had increased in possession a bank-note, unless we can the same proportion; then, indeed, suppose a man so absurd as to keep a bank-notes woald still have retained thing, of the goodness of which he has a their usual credit: people would still suspicion, while, for merely opening his have had the same confidence in them. mouth or stretching forth his hand, he But this could not be. From the na- can exchange it for a thing of the same ture of things it could not be. The nominal value, and of the goodness of cause of the increase of the bank-notes, which it is impossible for him or any was, the increase of the interest upon one else to entertain any suspicion, the National Debt; and, as it grew out " Public credit,” as it has been called, of an operation occasioned by poverty, but, as it may more properly be called, it would have been strange indeed had" The credit of bank-notes," has been it been accompanied with a circum- emphatically denominated, “SUSPICION stance which would have been an ASLEEP." in the midst of events like infallible indication of riches.

those of 1793 and the years immediately Without, however, stopping here to succeeding; in the midst of circum

stances like those above-mentioned, commonly used. As in the instance of relating to the bank-notes, it was im- Shrove Tuesday or Shrovetide, words possible that Suspicion should sleep which we all, from the oldest to the any longer. The putting forth of the youngest, make use of ; but as to their five-pound bank-notes appears to have meaning, we content ourselves with roused it, and, in the month of February, supposing (or appearing to suppose), 1797, it became broad awake. The that they contain a commandment for stoppage of payment on the part of the us to cat fritters and pancakes, and to Bank Company was the immediate con- murder poor unoffending cocks; whereas sequence; but, a particular account of they mean the Tuesday, or the time that important event, which totally for going to confess our sins to, and to changed the nature of all our money get absolution from, the Priests ; to transactions, and which will, in the end, shrive, being a word equal in meaning produce, in all human probability, effects to to confess, and shrove to confessed; of the most serious nature, must be the and the use of them in the case subject of a future letter. In the mean here mentioned having been handed while I am,

down to us from the days of our foreYour Friend,

fathers when the Catholic worship was WM. COBBETT. the worship of the country. State Prison, Newgate,

Monstrous, however, as is the perThursday, 30th August, 1810.

version of the meaning of words, in this instance, it is scarcely more so than in the case of the Funds and the National

Debt; but, there is this very important LETTER II.

difference in the two cases; that, while, GENTLEMEN,–Having, in the fore in the former, the perversion is attended going letter, taken a sketch of the with no mischief either to individuals, history of the Bank of England, and of or to the nation, in the latter it is at its notes, from their origin down to the tended with great mischief to both; time when that Bank stopped paying its with the ruin and misery of many a notes in gold and silver, the next thing thousand of widows and orphans, and to do in our regular course of proceed with woes unnumbered to the nation at ing, will be to inquire into, and clearly large. But, if a right understanding of ascertain, the cause of that stoppage; the meaning of these words be, in all for it is very evident, that without as cases where words are used, of some certaining this cause, we shall not be consequence, it is of peculiar conseable to come to anything like a decided quence here, where, as may have been opinion with regard to our main ques. gathered from the preceding letter, we tion, namely, WHETHER THERE BE ANY shall find the Funds, the Stocks, and the PROBABILITY THAT THIS BANK WILL BB National Debt, to be so closely interwoABLE TO RETURN TO THEIR PAYMENTS IN ven with the Bank Notes, as to be quite GOLD AND SILVER, in which question inseparable therefrom in every possible eyery man of us, from the highest to state or stage of their existence. the lowest, is so deeply interested. The word FUND means, a quantity

But it is necessary for us to stop a of money put or collected together. The little where we are, and not go on any word STOCK, as applied to such matfurther with our inquiries into the cause ters, has the same meaning. Both of the stoppage at the Bank of England, words may admit of meanings some until we have taken time to look a little what different from this ; but this is the at the FUNDS and the NATIONAL meaning which plain men commonly DEBT. These are words which are give to these words; and it is, too, the frequently made use of; but, like many fair and sensible meaning of them. other words, they stand for things which Now, we shall presently see, in what are little understood, and the less, per-degree this meaning belongs to what haps, because the words are so very are commonly called the Funds, or the

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