Chronological History of the Currency [pp. 501-513]

508 CHRONOLOGICAL HISTORY OF THE CURRENCY.
Government; the operation of heavy French and Rusian loans, raised at a
high rate of interest, having suddenly led to an export of bullion.
Bank Circulation. Bullion in the Bank.
Aug. 31 - - ~29,543,780 ~11,688,260
1818.-Increased forgeries of bank notes. First coinage of the present Sovereigns
containing 5 dwts. 314 grs. of gold. Numerous Reform meetings. (About
this time the writings of Wvilliam Cobbett create a general but an erroneous
belief ill a necessary connexion between bank paper and high prices.)
1819.- MIanchester massacre. Resumption of cash payments. 59 Gco. s. d.
II., c. 49, enacts that on the 1st of May, 1823, all notes of the bank
of Ellgland shall be payable in gold on demand at ~3 17s. 10/2d. per
oz. Prior to that period, not to be paid in smaller amounts than the
value of 60 oz. at ~3 19s. 6d. till lst of October, 1831; and not less
then 60 oz. at ~3 17s. 101-d. till October, 1823. English as well as
foreign coins allowed to be exported, by the same Act. Average
price of wheat in 1819, 72s., but through the effect of five deficient
harvests during this period, aggravated by the corn laws, the average
price of wheat at Windsor for the ten years 100 7
It must be said of British statesmen that if they sometimes lack foresight, they
are at least never wanting in courage. The new experiment of 1774, of adopting
as a singDe standard the rarest and dearest of the precious metals, had failed after a
brief triad and we find a legislature in 1819 yet bold enough to return to it, and to
return to it at a moment of falling markets,-the necessary consequence of a di miinishii.g, monopoly of the foreign trade of the world, and a diminishing govern ment ex;euditure,-and with such an accumulation of debt as the world had never
before see, —a debt of ~S50,000,000, the dividends of which were now to be paid
in gold, sld the principal itself, to whatever extent it might please the fundholder
to sell, at a moment of distrust, or whetn tempted by a better investment abroad.
The failcy which misled the House and the political economists of that day, by
whom rministers were influenced, was the comparative cheapness of gold, on the
return of peace, when every hoard on the Continent was suddenly released; and
the apparent consequent facility of meeting with gold all engagements of Bank
)paper. I3tlt this temporary cheapness was no test at aill of what the difficulty
might be of obtaining the amount of gold required, when new causes for hoarding
it might atrise; and surely with the gigantic mass of credit we had then built up,
there ought to have been some misgiving of the prudence of risking the public se curity upon such an improbable contingency as the chance of no new and unex pected dcenand ever arising for bullion. greater than the average quantity that
could conveniently be retained in this country. Some alternative of safety against
a violent collapse of credit obligations, should at least have been retained until
provision had been made for the ultimate extinction of the debt —until the paper
which contracted the debt had discharged it-and this, but for the unfortunate
state crotchet of convertibility into gold at a fixed price, would have been a matter
of very smrple financial arrangement. The history of the- bullion market, on the
peace of 81S5, shows that gold was then so rapidly becoming a drug that had it
not been for the large purchases of the Bank of Englantd at ~4 13s. 6d. and ~4
per oz., with a view to the resumption of cash payments, gold would have fallen
below the value of the Bank inconvertible paper; and with Bank notes at a premnium, a comparatively trifling bonus would have induced the fundholder to have
accepted in exchange for his perpetual annuities, terminable and life annuities, of
which somne of the youngest among us mnight have hoped to live long enough to
see the l;st.*
1820.-5 Geo. IIT., c. 68, provides that silver shall not be a legal tender for more
tha, 40s., instead of, as before, a legal tender for ~25. Geo. III. dies, in the
82;l year of his age. Cato-street conspiracy.
l821.-CIeath of Napoleon Bonaparte at St. Helena. Coronation of Geo. IV. and
dealt of Queen Caroline. The Bank pay all demands in gold.
* It should l e Iunderstood that lank paper was always convertible into gold during tihe war
but that the payment was optional, and l ot at a fixed price. The difference between gold and
paper fro, 1i 03 to lC09 was but X2 13s. 2d. per cent. In 1813, ~22 1]s. per cent. The average
difference during the last seven yeari of the war, was about 15 pet cent.