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• Preface
• Studies In the Theory of International Trade
• Chapter I: English Theories of Foreign Trade, Before Adam Smith: I
• I. Introduction
• II. “ Mercantilism” and “bullionism”
• III. the Balance-of-trade Doctrine
• IV. Reasons For Wanting More Bullion
• V. Employment and the Balance of Trade
• Chapter II: English Theories of Foreign Trade, Before Adam Smith: Ii
• I. Legislative Proposals of Mercantilists
• II. the Collapse of Mercantilist Doctrine
• III. Some Modern Interpretations of English Mercantilism
• Chapter III: The Bullionist Controversies: I. The Inflation Phase
• I. the Participants In the Controversy
• II. the Factual Background
• III. Premium On Bullion As Evidence of Excess Issue: the Bullionist Position
• IV. Qualifications Conceded By the Bullionists
• V. Possible Objections to the Bullionist Position
• VI. the Anti-bullionist Position
• VII. the Balance of Payments Argument
• VIII. the Possibility of Excess Issue By Banks
• IX. Responsibility For the Excess Issue: Bank of England Vs. Country Banks
• X. Responsibility For Excess Issue: the Credit Policy of the Bank of England
• Chapter IV: The Bullionist Controversies: II. The Deflation Phase
• I. the Resumption of Cash Payments
• II. Responsibility of Resumption For the Fall In Prices
• III. the Economic Effect of Changing Price Levels
• IV. Ricardo's Position On the Gold Standard
• V. Reform Without Departure From the Metallic Standard
• VI. Paper Standard Currencies
• Chapter V: English Currency Controversies, 1825–1865
• I. Introduction
• II. the “currency School” -“banking School” Controversy
• III. the “palmer Rule ”
• IV. the Bank Act of 1844
• V. the Possibility of Overissue of Convertible Bank Notes
• VI. the Role of Deposits, Bills of Exchange, and “credit” In the Currency System
• VII. the Technique of Credit Control
• VIII. the Relation Between Bank of England Operations and Specie Movements
• IX. Currency Reform Proposals
• Chapter VI: The International Mechanism Under a Simple Specie Currency
• I. Introductory
• II. the Mechanism According to Hume
• III. an Omitted Factor? Relative Changes In Demand As an Equilibrating Force
• IV. Prices In the Mechanism: the Concept of “price Levels ”
• V. the “terms-of-trade” Concept
• VI. the Prices of “domestic” Commodities
• VII. the Mechanism of Transfer of Unilateral Payments In Some Recent Literature
• VIII. a Graphical Examination of Pigou's Analysis 1
• IX. Some Elaborations On the Basis of Pigou's Analysis
• X. an Alternative Solution
• XI. Types of Disturbance In International Equilibrium
• XII. Specie Movements and Velocity of Money
• XIII. Commodity Flows and Relative Price Levels
• XIV. Exchange Rates
• XV. A Criticism of the Purchasing-power Parity Theory 1
• Chapter VII: The International Mechanism In Relation to Modern Banking Processes
• I. Automatic Vs. Managed Currencies
• II. Primary and Secondary Expansion of Means of Payments
• III. Short-term Loans In the International Mechanism
• IV. Primary and Secondary Expansion In Canada , 1900–13
• V. the International Mechanism and Business Cycles
• Chapter VIII: Gains From Trade: the Doctrine of Comparative Costs
• I. the Nature and Origin of the Doctrine
• II. the Division of the Gain From Trade
• III. Trade In More Than Two Commodities
• IV. Trade Between More Than Two Countries
• V. Transportation Costs
• VI. Increasing and Decreasing Costs
• VII. Prices, Money Costs, and Real Costs
• VIII. Dependence of Comparative Cost Doctrine On a Real-cost Theory of Value
• IX. Differences In Wage Rates In Different Occupations
• X. Variable Proportions of the Factors and International Specialization
• XI. Variable Proportions of the Factor and Comparative Real Costs
• XII. “ Opportunity Cost” Analysis As a Substitute For Real Cost Analysis
• Chapter IX: Gains From Trade: the Maximization of Real Income
• I. “ Mass of Commodities” and “sum of Enjoyments”: Ricardo and Malthus
• II. Reciprocal Demand and the Terms of Trade
• III. Terms of Trade and the Amount of Gain From Trade
• IV. “ Net Benefit” In International Trade: Marshall
• V. Total Net Utility Derived From International Trade: Edgeworth
• VI. the Gain From Trade Measured In Money
• Appendix: a Note On the Scope and Method of the Theory of International Trade

IX. Responsibility for the Excess Issue: Bank of England vs. Country Banks

Since bank notes were issued both by the Bank of England and the country banks, responsibility for any excess issue of paper currency could lay with either or with both. With the exception of Wheatley, who held the country banks largely responsible,1 the bullionists were united in assigning responsibility for the excess, as between the Bank of England and the country banks, wholly or predominantly to the former. Boyd, in 1801, laid down the formula which was to be the text of the bullionists: “The Bank of England is the great source of all the circulation of the country; and, by the increase or diminution of its paper, the increase or diminution of that of every country bank is infallibly regulated.” 2 His argument rested on the postulate that the country banks must keep a fixed percentage of reserves against their own note circulation in Bank of England notes, whereas the Bank of England was not subject to such a limitation.3 In a note added to the second edition, he conceded that the country banks, by allowing their reserve ratio to fall, may have contributed independently to the then existing excess of currency, but he blamed the Restriction, which left to holders of country bank notes the possibility only of converting them into Bank of England notes with which they were not familiar, for making this fall in reserve ratio possible. He apparently believed that once this fall had taken place, the Bank of England would again have control, through regulation of its own issues, over the volume of country bank issues.4

Thornton reached the same conclusion, that the volume of Bank of England issues regulated the volume of country bank note issues, but by a more elaborate chain of reasoning. He applied to different regions within a country the Hume type of analysis of adjustment of international balances of payments.5 If country banks took the initiative in increasing their issues, country prices would rise; the provinces would buy in London commodities which formerly they had bought locally; there would result an adverse balance of payments on London, which would be met through shipment of Bank of England notes to London or by drafts on the balances of country banks with London bankers. The impairment of their reserves would force the country bankers to contract their note issues.6

Thornton pointed out, however, that this did not mean that the proportion of country bank notes to Bank of England notes must always remain the same. This would hold true only if the areas of circulation of the two types of notes and also the relative volumes of payments to be made in the respective areas remained unaltered:

By saying that the country paper is limited in an equal degree, I always mean not that one uniform proportion is maintained between the quantity of the London paper and that of the country paper, but only that the quantity of the one, in comparison with the demand for that one, is the same, or nearly the same, as the quantity of the other in proportion to the call for the other.7

Similar views were expressed by Horner,8 King,9 Ricardo,10 the Bullion Committee,11 Malthus,12 and other bullionists.

Since the anti-bullionists denied any excess in the currency as a whole, they ordinarily showed little interest in the attempts of the bullionists to apportion responsibility for such excess. Some of the anti-bullionists agreed that convertibility of country bank notes into Bank of England notes was as effective a restriction on country bank note issue as convertibility into gold.13 Others of them, however, apparently determined that if any blame was to be assigned it should not be to the Bank of England, denied that the amount of country bank notes was in any way dependent on the amount of Bank of England notes, and cited in confirmation the evidence of country bankers before the Bullion Committee that their reserves consisted only slightly of Bank of England notes and the apparent absence of correspondence between the fluctuations in the issues of the two types of paper money.14

Silberling and Angell reject the bullionist claim that the country bank note circulation was dependent on that of the Bank of England notes. Silberling ridicules the notion that if prices rise in the provinces, it will result in a shift of purchases from the provinces to London: “London and the rest of England were not then, and are not now economic areas producing identical wares. If the price of iron or hops or wool rose in the provinces by reason of liberal credit accommodation to farmers and speculators, ... it could not result in purchases from London of what London did not produce.” 15 This is a valid criticism of the manner in which the bullionists expressed their argument, but leaves the essence of the argument untouched. A relative increase in country bank note issues will not lead the provinces to increase their purchases in London of country products, but it will, nevertheless, lead to a debit balance of payments of the country with London. The increase in spendable funds in the country will lead to increased purchases of London products by the provinces, and the rise in prices in the provinces will lead to decreased purchases of country products by London. When two regions have currencies convertible into each other at fixed rates and have commercial relations with each other, one of these regions cannot issue currency to any extent, irrespective of what the other does, without encountering serious exchange and balance of payments difficulties, even if the two regions do not have a single identical product.16

Silberling and Angell object further that the explanation given by Thornton and Ricardo is unilateral, instead of bilateral; it fails to take account of the upward effect on London prices of the release by the country to London of Bank of England notes and balances with London bankers resulting from an expansion of country bank note issues. They contend, in rebuttal, that a rise in prices in the country resulting from an increased issue of country bank notes would spread to London.17

This is a valid criticism of Thornton.18 It is not applicable, however, to Boyd19 or Ricardo,20 for both of these writers took it for granted that it was necessary for the country banks to maintain constant cash reserve ratios whether in Bank of England notes or not. If the Bank of England did not increase its issues, then the country banks could not at the same time increase their circulation and maintain a constant reserve ratio. It is this assumption of constancy in the country bank reserve ratios, to which neither Silberling nor Angell refers, which is the vulnerable point in the bullionist argument. If, as Boyd conceded, the country banks allowed their reserve ratios to fall, they could, as long as their reserves were not wholly exhausted, force their issues even while the Bank of England remained passive. If they tolerated a lowering of their reserve ratio, they could bring about a new price equilibrium and a new equilibrium in the balance of payments between London and the provinces, with the circulation greater, and prices higher than before, in each area. Even if the country banks expanded rapidly and extravagantly, and the Bank of England did not follow suit, it might be some time, as Joplin later pointed out,21 before their reserves were exhausted, and in the interval before the collapse prices would be higher and the premium on bullion greater for England as a whole. The question still remains, however, as to what were the obligations of the Bank of England in such a situation.

Silberling further supports his argument that the issues of the country banks were not dependent upon those of the Bank of England by the claim that the country bank reserves consisted mainly of balances with London private bankers, while the reserves of the London bankers “were wholly uncontrolled by law and had never been more than very moderate sums; and their ability to create credits was now but very little controlled by the Bank of England.” 22 The London bankers, unless they were of a banking species hitherto unrecognized, must, in practice, have found it necessary to have on hand in case of need cash or its equivalent. But the only “cash” at the time was Bank of England notes, and its only equivalent at the time was a demand deposit with the Bank of England. The private bankers in London in fact began during the Restriction period the practice of opening accounts at the Bank of England and of rediscounting bills in their portfolios with the Bank, instead of, as before, selling exchequer bills or government stock on the open market, when they needed to replenish their cash reserves.23 The then deputy governor of the Bank admitted to the Bullion Committee, in reply to a searching question on this point, that a considerable amount of the bills discounted with the Bank of England by the London private banks was country bank paper.24 Willingness of the London bankers to allow their cash balances to run down would enable them to expand their credits to country banks in some degree, even if the Bank of England did not make available to them increased rediscount facilities. But since such expansion would involve a persistent drain of their cash to the Bank of England and to hand-to-hand circulation, it could not have been carried far without active Bank of England support. The Bank of England, moreover, could, by positive action, have prevented even such expansion of the volume of discounts of the London private banks as had been independent of increased discounts with the Bank of England.

Silberling and Angell fail completely to give any consideration to the proposition that while England had an inconvertible paper currency special responsibility attached to some agency, and presumably to the Bank of England as in effect a central bank, to keep the currency in good order, even if to do so it should prove necessary to countervail the activities of the country banks and the London private bankers. Silberling even goes to the length of characterizing as a “truly remarkable opinion,” unfortunately, however, without indicating why, Ricardo's argument (as summarized by Silberling) that “one of the causes of the ‘excess’ of Bank notes was the expansion of the country issues, which had thereby narrowed the field within which the Bank's issues could circulate; the latter overflowed, in other words, a contracted channel.” 25 The Bank of England, it is true, was organized as a profit-making establishment. But it enjoyed valuable special privileges, and whatever some of its shareholders may have thought,26 it was the general opinion of the time that it also had special obligations, what we should today term the obligations of a central bank. Silberling himself refers to the Bank of England of that period as a “central bank,” and states that the Bank claimed to be a “regulator” of the currency. The Bank could not plead financial inability to carry out these obligations, for the “supposedly enormous profits,” to which Silberling refers in a manner clearly intended to suggest that they existed only in the imagination of the bullionists, were genuine.27 There is nothing obviously remarkable in the proposition that a central bank should contract when the rest of the banking system is dangerously expanding, in order to check and to offset that expansion. It should, on the contrary, be obvious that there is a fatal conflict between the regulatory functions of a central bank and determination on its part to maintain, willy-nilly, its accustomed proportion of the country's banking business.28

Silberling and Angell attempt also to demonstrate the lack of responsibility of the Bank of England for the increase in currency by an elaborate statistical comparison of the behavior of the Bank of England and the country banks. But if it is accepted that the Bank of England was a central bank, its responsibility for any excess of currency is ipso facto established, unless it can be shown that it used its powers of control to the utmost but that they did not suffice. What statistical analysis of this sort can at best show is the extent to which the actions of the other banks made it incumbent upon the Bank to exercise what powers of control it had, and in what degree and with what measure of success it did exercise them. Even such questions cannot be answered by a simple comparison of the short-term fluctuations of the two types of note issues. The Bank of England could have been wholly responsible for initiating and maintaining an inflationary trend during the period as a whole, while wholly irreproachable in its manner of dealing with short-term fluctuations about this trend. Allowance must be made, furthermore, for the changes in the areas of circulation of the two currencies and in the volume of trade and in the velocities of circulation in the two areas, and for the effects of the occasional collapses of the country bank circulation owing to discredit, before much can be learned from such comparison. These difficulties are disregarded by Silberling and Angell. But let us suppose them successfully surmounted. What then could be learned from a comparison of the fluctuations in the two types of issues?

The Bank of England could have followed any one of three alternative lines of policy with respect to the relationship between its own issues and those of the country banks, which can be distinguished as (1) regulatory, (2) passive or indifferent, and (3) sympathetic. If it followed a regulatory policy, this should show itself in a negative correlation between the fluctuations in the two types of issues, with the changes in the Bank's issues lagging behind those of the country banks. If the Bank took a passive or indifferent attitude toward the operations of the country banks, there should be no marked correlation, positive or negative, unless: (a) the country banks, either from policy or from necessity, followed the Bank of England, when there should be a positive correlation between the fluctuations in the two types of issues, with the changes in the country issues lagging after the changes in the Bank issues; or (b), both the Bank and the country banks responded to the same factors in the general situation pulling for credit expansion or contraction, when there should be positive correlation between the fluctuations in the two types of issues, with the existence and the character of a lag depending on the time-order in which London and the provinces, respectively, felt the stimuli to expansion or contraction and the rapidity with which they responded to such stimuli. Finally, if the Bank followed a sympathetic policy, there should be positive correlation between the changes in the two types of issues, but with the changes in the Bank of England issues lagging after the changes in the country bank issues. This does not, of course, exhaust the range of possible relationships, since the types of relationship distinguished above need not in practice have been mutually exclusive, but could have been present in varied and varying combinations.

From his examination of the statistical data Silberling concludes that “the quarterly cyclical fluctuations in the country notes preceded ... the discounts of the Bank of England (a much more accurate measure of accommodation than their notes).” 29 If this were the case, it would indicate that the Bank of England either had followed the “sympathetic” policy toward country bank issues, surely the least defensible of all if it was its function to keep the currency in order, or had had no policy at all but had reacted in the same way as the country banks, but more slowly, to the forces operating in the country at large to bring about a currency inflation. Silberling nevertheless presents this conclusion as an important element in his exoneration of the Bank from blame.

Angell, using Silberling's data, finds that the Bank of England note circulation “was a comparatively stable element” and that “the great element of fluctuation in the volume of currency was, rather, the issues of the country banks. These issues usually expanded greatly before and during a rise in prices, while they contracted even more abruptly before and during a fall,” 30 i.e., the Bank of England followed a passive policy.

The statistical conclusions of both writers rest, unfortunately, on faulty data with respect to the country bank note circulation. There was no record of the actual amounts of notes issued, but the notes had to carry tax stamps, and all contemporary estimates were based on the official statistics of the tax stamps, sold by the government, and on the estimated average life of the notes. Country bank notes were subject to tax only upon their original issue. Subject to some complex qualifications, prior to 1810 these notes could not be reissued after three years from the date of their original issue. This limitation was removed in 1810, on the assumption that on the average the notes would, because of wear and tear, have a life of about three years. If the notes could be presumed to last, prior to 1810, on the average for three years, if after 1810 all the notes could be presumed to last for the full three years, and if the country banks always succeeded in maintaining in circulation the full amount of notes for which they had purchased stamps, then the circulation at the beginning of any quarter would be equal to the amount of notes for which stamps had been sold during the preceding twelve quarters. There was no available mode of estimating the circulation which did not necessitate making doubtful assumptions of this kind.31 Silberling's estimate of country bank note circulation, which Angell also uses, has, moreover, a special and catastrophic defect of its own. It consists merely of the amount, for each quarter, of £1 and £5 notes for which stamps had been sold in such quarter, arbitrarily multiplied by ten, i.e., with the decimal point moved one place to the right, presumably as the result of an error in copying.32 It bears no resemblance in its fluctuations to the other available estimates of country bank note circulation, as the following table shows:

Silberling claims for his series that “since this stamp duty involved expense to the issuing bankers, it is wholly probable that the volume of notes stamped each quarter affords a safe index, at any rate, of the variability of the actual issues.” 33 But Silberling overlooks that the amount of stamps issued each quarter indicates at best only the amount of new notes which were issued during that quarter. Since it gives no indication of the amounts of old notes which went out of circulation during that quarter, it is a wholly unreliable index of the net change during the quarter in country bank note circulation. Silberling's series, as its method of compilation would lead one to expect, shows much greater quarter-to-quarter and year-to-year variability than do the other available estimates of country bank note circulation. These last do not indicate any appreciably greater instability in country bank note than in Bank of England note circulation. But even these other estimates are probably too defective to warrant any confidence on conclusions based on their use.34

[1]Remarks on currency and commerce, 1803, pp. 209 ff.; Essay on the theory of money and principles of commerce, I (1807), 336 ff.

[2]Letter to Pitt, 1st ed., 1801, p. 20.

[3]Ibid.: “The circulation of country bank notes must necessarily be proportioned to the sums, in specie or Bank of England notes, requisite to discharge such of them as may be presented for payment; but the paper of the Bank of England has no such limitation.”

[4]Letter to Pitt, 2d ed., pp. 19–20, note. Boyd seems to have thought that an increase in holdings of cash by individuals in the country was the only way in which pressure on the country bank reserves could occur. In an appendix to the second edition (pp. 42–43), Boyd prints a letter from an unnamed correspondent taking him to task for attaching insufficient weight to the country-bank notes, which, according to this letter, had probably increased in greater proportion than Bank of England notes.

[5]Hume had noted incidentally the applicability of his analysis to the relations between the different provinces of a single country. See supra, p. 84.

[6]Paper credit, 1802, pp. 216 ff. Thornton also argues here that if bank credit became more easily available in the country while remaining restricted in London, mercantile houses with banking connections both in the country and in London would shift some of their borrowing from London banks to country banks, would demand Bank of England notes in exchange for the country bank notes thus obtained, and would thereby impair the reserves of the country banks and force them to contract their issues.

[7]Ibid., p. 228.

[8]Review of Thornton, Paper credit, Edinburgh review, I (1802), p. 191.

[9]Thoughts on the effects of the Bank restrictions, 2d ed., 1804, pp. 101–11. King stated the argument, later to be stressed by the banking school, that country banks could not issue to excess because competition among the banks to issue their own notes would prevent any individual bank from expanding. See infra, pp. 238 ff.

[10]High price of bullion. 1810, Works, pp. 282 ff.

[11]Report, 1810, pp. 46, 67. The Bullion Committee nevertheless cited evidence tending to show that the reserve ratios of the country banks had fallen and that their note issues had therefore risen in greater proportion than the issues of the Bank of England, even after allowance for changes in the areas of hand-to-hand circulation of the two currencies. (Ibid., pp. 68–71.) They also reached the erroneous conclusion that if country banks increased their note issues proportionately with the increase in Bank of England notes, “the excess of Bank of England paper will produce its effect upon prices not merely in the ratio of its own increase, but in a much higher proportion.” (Ibid., p. 68.)

[12]“Review of the controversy respecting the high price of bullion,” Edinburgh review, XVIII (1811), 457–58.

[13]Cf. Coutts Trotter, Principles of currency and exchanges, 2d ed., 1810, pp. 22–23.

[14]Cf. Bosanquet, Practical observations, pp. 76 ff; Vansittart, Substance of two speeches, 1811, pp. 52–55. Bosanquet claimed that if prices rose in London as the result of increased issues by the Bank of England and its notes therefore flowed to the country, this might result in a contraction, but could never cause an augmentation, of the country bank note circulation, presumably on the ground that the Bank of England notes would necessarily displace country bank notes rather than supplement them.

[15]“Financial and monetary policy, “loc. Cit., p. 419. Cf. Henry Burgess, A letter to the Right Hon. George Canning, 1826, p. 28: “The theory of the [Bullion] Committee ... about an excess of country bank notes causing a local rise in prices and sending all people to London, to buy cheap commodities, seems to me equally luminous ... Who that had a correct notion of the working of the currency, would think of sending people from a distance in the country to London, to buy corn, cattle, cheese, wool, bacon, coal, lead, iron, etc. by an excess of country bank notes, as compared with Bank of England notes.” Cf. also John Ashton Yates, Essays on currency and circulation, 1827, p. 37: “The local rise of prices in consequence of an increased issue of country bank notes must be enormous in order to bring corn or iron from London to Glamorganshire or Staffordshire ...”

[16]Cf. also the answer of George Woods: “For as commodities are cheaper where the excess has not taken place than where it has, so will they be taken to that part where a higher price can be obtained. If it be said that many goods, such as those from the East Indies, can be purchased only in London, I reply: the price of luxuries is dependent upon that of necessaries.” (Observations on the present price of bullion, 1811, p. 21.)

[17]Silberling, “financial and monetary policy,” p. 408; Angell, Theory of international prices, p. 46

[18]Thornton was not unaware of the issue, but he failed to meet it satisfactorily. Cf. Paper credit, 1802, pp. 219 ff.

[19]See supra, p. 154.

[20]Reply to Mr. Bosanquet's observations, Works, p. 352.

[21]T. Joplin, Outlines of a system of political economy, 1823, p. 259.

[22]“Financial and monetary policy,” loc. cit., p. 399.

[23]Cf. Joseph Lowe, The present state of England in regard to agriculture, trade, and finance, 2d ed., 1823, appendix, p. 20.

[24]Bullion Report: Minutes of evidence, pp. 171–72.

[25]“Financial and monetary policy,” loc. cit., p. 426.

[26]Cf. Daniel Beaumont Payne, An address to the proprietors of bank stock [1816], in pamphleteer, VII (1816), 381: “Mr. Allardyce appears to have accurately understood, that ‘it is the first and almost only duty of the court of directors, to promote the interest of the proprietors by all lawful ways and means.’”

[27]The Bank of England did not ordinarily report its profits even to its shareholders. But in 1797 the Bank was paying a dividend of 7 per cent on its capital stock. This was maintained until 1807, when it was increased to 10 per cent. In addition, six extra dividends or “bonuses” in government stocks or cash averaging over 5½ per cent were paid from 1799 to 1806, a stock dividend of 25 per cent was paid in 1816, and the Bank's premises were enlarged out of profits during the Restriction period. The average price of bank stock rose from 133½ in 1777 and 127½ in the crisis year, 1797, to 280 in 1809. (Mushet, Effects produced on the national currency, 3d ed., 1811, pp. 68–69; J. R. McCulloch, Historical sketch of the Bank of England, 1831, p. 75.)

[28]To the extent that there was competition for issue between the country banks and the Bank of England, it was mainly regional competition. The two currencies circulated side by side only to a very limited extent, and when a note-issuing country bank was established in a new district, Bank of England notes would ordinarily not continue to circulate freely there. If as country banks extended the area of circulation of their notes the Bank of England maintained its issue, there would tend to result an increase of Bank of England note circulation within the area of circulation remaining to it. Cf. Lord King, Thoughts on the effects of the Bank restrictions, 2d ed., 1804, pp. 102–5.

[29]“Financial and monetary policy,” loc. cit., p. 420, note; “British prices and business cycles,” loc. cit., p. 243. If bank notes are rejected as a suitable measure of the “accommodation” granted by the Bank of England, they should be rejected also for the country banks.

[30]Theory of international prices, p. 486.

[31]The country banks would always have to keep on hand some of their notes as till money or awaiting the possibility of their issue. The notes of banks which failed or suspended payments or for other reasons ceased to issue would be withdrawn before three years from the date of their original issue had elapsed. There were still other obstacles to making reliable estimates of the country bank note circulation from the statistics of stamp sales. Cf. the testimony of J. Sedgwick, Chairman of the Board of Stamps, Report by the Lords Committee [on] resumption of cash payments, 1819, appendix F, 7, pp. 408–15.

[32]The following data for quarters chosen at random show adequately the nature of Silberling's series:

[33]“British prices and business cycles,” loc. cit., pp. 242–43.

[34]Cf. Tooke, A history of prices, II (1838), 130–31.