| p. 5, line 14 | There can be no doubt that a well regulated Bank having the exclusive supply of paper over a certain district in which the use of paper is necessary may by a due limitation of that paper ensure its “supplying” with sufficient exactness “the place of that Coin which it represents.” |
| p. 6, line 9 | It does not follow from the circumstance of “many European Governments” and the American States having suffered their Paper through various causes to be depreciated that the Bank of England must also necessarily become depreciated which seems to be the point assumed. |
| p. 7, line 6 | It is not shown by this occasional Discount. The Discount results from a different Cause namely from the Interest on the Exchequer Bill being an insufficient Equivalent for the delay of Payment. An Exchequer Bill is not circulating Paper and the fluctuations in its Value depend chiefly on the variations in the current rate of Interest. |
| p. 8, line 24 | They probably were not aggravated by an extension of its Issues to Government. This term indeed is inaccurate. Does it mean “by its Loans to Government” or its Issues of Paper in consequence of those loans. If it means Issues of Paper then the question is whether the paper was on the whole excessive. And it is the general Excess of Paper arising from Issues to Government, Issues to Merchants etc. that ought to be represented as the cause of the Evil. I doubt whether the Issue of paper for some time antecedently to the Suspension had been on the whole too great—I have no doubt that when reduced to 8½ Millions it was too small. |
| p. 9, line 8 | This reduction tended as I conceive to prevent the restoration of Confidence. I admit, however, that it tended slowly and gradually to improve the Exchange. The Reduction tended to produce an immediate immense demand for Guineas and to promote perhaps after some Months interval of time an influx of Gold into the Country. |
| p. 10, line 16 | The run on the Bank did not arise properly speaking from a want of Credit in the Bank and was not therefore to be prevented by any association. It arose from a discredit cast on Country Bank Notes and a demand for gold in consequence of Country Bank Notes being called in which demand the Bank of England is through the peculiar circumstances in which it stands under a necessity of supplying even to any extent. It arose also from a preference given to Gold over even Bank of England Paper at the moment of an alarm of Invasion a preference however not arising from a distrust of the Bank which any Association could cure, but from an idea that in case the Enemy should land or possess the Country Gold would be the most portable kinds of Goods and also the most universally current Medium. |
| p. 11, line 9 | A new Coinage would have been to little purpose if Bank Paper had been suffered to be excessive for it would then have been exported as soon as issued and if Bank Paper was not rendered excessive the limitations of paper would secure the Influx of Gold and the purchase of it at a saving price. Still however the limitation of paper could not be counted on as sufficient to produce an Influx of Gold sufficiently prompt and large to supply the demands of the whole public when agitated by the dread of Invasion. The actual demand on the Bank for Gold was as I suspect no less than half a Million a week (perhaps still more) for some weeks preceding the Suspension and it was proceeding in an encreasing Ratio. A similar demand might be expected to recur again and again in a War such as that in which we were engaged and the very expectation of its recurrence, if the Bank of England had again been opened would have produced an Irregularity in the Issues of the Paper both of the Country Banks and of the Bank of England and a State of Apprehension among the Merchants which might have been extremely distressing to Commerce. |
| p. 12, line 14 | Probably not because it was not fully understood that the measure would be so free from bad consequences as it proved. |
| p. 13, line 10 | The Profits of the Bank can hardly fail to be enlarged when Notes under £5 are issued in addition to their other Notes. |
| line 23 | It was the limitation of Bank Paper and the known Solvency of the Bank, rather than any particular effect of an Association which sustained the Credit of Bank Notes. |
| p. 16, line 10 | It is not accurate to infer from the general magnitude of our Commerce that 16 Millions of Notes are not too much. If with 16 Millions the Exchanges are favourable 16 Millions are not too much. If with 10 Millions the Exchanges were greatly and permanently unfavourable we might pronounce 10 Millions to be too much. |
| p. 17, line 18- | perfectly just |
| 20 | State of Exchanges |
| p. 20, line 1-4 | Apply the observation in this Passage which I think just to what is said in page 9—If more paper is wanted in time of Alarm it could not be “necessary” in 1797 to reduce the Paper of the Bank to 8½ Millions |
| p. 23, line 8 | This credit is now limited much in the same manner and degree in which it would be limited if the Bank paid in Gold. |
| p. 27, line 1 | In times however of great alarm (such for instance as that of an actual landing of the Enemy) an augmentation of Paper may be necessary. |
| line 19 | Say rather by the State of Exchanges. |
| p. 28, line 11 | A paper circulation which is not convertible into Specie will as much maintain its Value as a paper circulation which is convertible provided its quantity is equally limited and the credit of the issuing Bank equally perfect in both cases. |
| p. 28, line 17 | It is also probable that they will not be exactly right when their paper is convertible into Specie. The State of the Exchange will equally be the criterion by which they must judge in both cases. |
| p. 29, line 10 | It is the total of their Loans (consisting of Issues in part to Government and in part to Merchants) which constitutes the Excess and there is much more temptation to issue too much to the Merchants than to the Government. The Interest of the Bank Directors in the Profits of the Bank is a very trifling consideration. The chief danger of an over-issue arises from the circumstances of the Directors perhaps not sufficiently perceiving that a limitation of Paper will improve the Exchanges and that it is necessary if the Exchanges continue long unfavourable to make this reduction even against the general sense of the merchants. |
| p. 30, line 18 | This is a remarkable erroneous position of Dr. A. Smith. It seems to imply that there must be some clipping of the Coin or some adulteration of it whenever the Coin is for any considerable time of less value than the quantity of Gold professedly contained in it. And Dr. Smith in a passage connected with that which is here quoted, shows this to be his meaning. This inferiority in the Value of Gold in Coin to Gold in Bullion may however arise and commonly does arise from the circumstance of the whole circulating medium being too great in quantity and being therefore depreciated, for Gold in Coin (if the depreciation is not great) will in such case pass even for a long time at the depreciated Paper price. If indeed the general Depreciation is great the Coin will go abroad and after a time the Banks must stop—The general Inference however both of Dr. A. Smith and of Lord King (namely that the Market price of Gold and Silver are the test of a depreciated currency) is just. |
| p. 31, line 18 | A Currency in specie may be degraded in a small degree. This degree, supposing the exportation to be free, will not exceed the Charges of Exportation. |
| p. 32, line 22 | Mr. Boyd in his letter to Mr. Pitt insisted that the Nonconvertibility of Paper into Gold was the cause of a depreciation of it which he assumed to be so great as to account “more than any other cause” for the high price of Bread. He did not measure the degree of the Rise which an Excess of paper occasioned by the variation in the Exchange as he ought to have done and he did not seem to consider that this Nonconvertibility of Paper into Gold does not necessarily produce a depreciation of paper, but produces only when it serves to encourage the Issues of Paper to issue it to excess. A non-convertible Paper which is limited and is in full credit may maintain its price just as if it were convertible. |
| p. 33, footnote, line 11 | That the Bank of England ought to limit its “paper in the case of Gold going abroad and of the general Exchanges continuing long unfavourable” is one of the practical principles laid down by Mr. T. (See Page 295 of Mr. H. T.’s work [p. 259 of the present volume]). |
| p. 33, line 16 | This fact proves the truth of the important principle which I have before asserted namely that a nonconvertible paper if limited may maintain its price exactly in the same manner as a convertible paper. This point however seems to be denied in many parts of this Pamphlet. |
| p. 35, line 4 | Gold (not Silver) is the Test by which Depreciation of English Paper should be tried, for Gold Coin is the chief English Coin and the only actually Current Coin of which the standard is maintained. Much of the reasoning in the pamphlet proceeds on the supposition that the price of Silver is the Test. |
| p. 37, line 11 | Lord King does not take into his consideration the addition made to the Bank Paper by the Issue of £1 and £2 Notes circulating in the place of Gold which was either carried abroad or hoarded and which therefore would not have any influence. He continues also to estimate the Depreciation by the price of Silver Bullion and not of Gold Bullion. The latter as I believe never was more than 10 or 11 Per cent above the Mint price. I agree however with Lord King that it is probable there may have been about this time a somewhat too great issue of Bank of England Notes. |
| p. 38, line 1 | I think this Correspondence (vide Tables at the end of this book) has not so remarkably existed. In July 1802 for example when Bank Notes were at the highest namely 17.254 100 an English Pound Sterling was worth 34 Hamburgh Shillg. whereas in February 1800 when Bank Notes were 15 120.000 the English Pound was worth only 30/6. |
| The effect of a too great issue of Paper followed at so great a distance of time from its cause and is so obscured by interfering circumstances that a very discernible correspondence is not to be expected. Some general Correspondence, however, appears from the annexed tables. It is to be regretted that Lord King in stating the quantity of Bank of England Notes has not distinguished the quantity of £1 and £2 notes. Before the Restriction there were no Notes of this Class. Some time after it they amounted to 2 Millions and by the last account rendered to 4 Millions—It is farther to be considered that Bank of England Notes are now kept as a fund standing in the place of Gold by Banks in the Country. On the other hand I suspect that in London there is a continually increasing economy in the use of Bank Paper. |
| p, 39, footnote line 18-22 | Does not this passage a little contradict what is said above of the discernible Correspondence between the State of the Exchanges and the quantity of Bank of England Notes in circulation. |
| p. 41, line 6-9 | Is this precisely the fact? |
| p. 42, line 6 | I understand that the relative prices of Silver and Gold Bullion have varied of late years. |
| line 22 | This I take to have been nearly its highest price. |
| p. 46, line 16 | Is this the case? Is there I mean any difference? |
| p. 51, line 5 | There is I think some truth in the Remark though it is perhaps put too strongly. |
| 54, line p. 21 (after “balance of trade”) | with the Continent. |
| p. 55, line 15 to end of page | Ought not Silver (which is here considered as imported in order to be exported) to be classed among Commodities and not represented as indicating, when thus imported with a view to Exportation, a favourable balance of Trade. Lord King seems to me to adopt in part that erroneous language respecting Balance of Trade which he himself condemns. Silver as I apprehend is often purchased abroad on account of the India Company at whatever may be the existing price in order to be exported to India. Is it in such case to all intents and purposes an Article of Commerce and its transmission to England in order to be put on board India Ships is then no more indication of a favourable Balance of Trade than the similar transmission of any other article. This observation may perhaps supply an answer to the discussion with which this Work closes. |
| p. 58, line 21 | It will be reduced to Equality except so far as either the Debt subsisting between Great Britain and foreign Countries may vary, or the quantity of precious metals in Great Britain may fluctuate. It is probable that neither of these will alter materially and it is clear that neither of them will perpetually and indefinitely encrease. |
| p. 61, line 23 | This is a very unfair mode of describing the Encrease of Bank of England Paper. The 16 Millions include as I rather think no less than 4 Millions of £1 and £2 Notes which circulating in the place of Gold withdrawn form no addition to the circulating Medium. |
| p. 62, line 13 | This subject certainly demands explanation. There can be no doubt however that a large part of the Irish Bank Paper as a mere substitute of paper for gold which has disappeared. |
| p. 67, line 23 | I should conceive them to have had no effect. |
| p. 69, line 25 | An enlargement of the profits of the Bank is not proof of misconduct. The Issue of £1 and £2 Notes must necessarily be profitable and of the propriety of this Issue there can be no doubt. |
| p. 70, line 9 | It ought to be considered on behalf of the Bank of Ireland that that Bank not having the monopoly of the Supply of paper Currency in Dublin (other Bank Paper circulating in the same place) has not the same power which the Bank of England has of limiting the circulation of the Country and that the limitation of the Bank of Ireland paper in the present circumstances of Ireland might possibly have little other effect than that of leaving to the other private Banks (which are completely rival Establishments) those profits which the Bank of Ireland should relinquish. |
| p. 73, line 13 | An obligation to give Bills on London at a fixed Exchange, or a voluntary Agreement in all the Dublin Banks to give them, would answer the same purpose and would perhaps be a less objectionable Remedy. |
| p. 77, line 12 | Though the plan proposed might not much extend the circulation of English Bank Notes in Ireland it would create a necessity of keeping a certain quantity of English Bank Notes in the hands of the Irish Banks. |
| p. 79, line 15 | It deserves consideration whether this limitation of the Paper of the Bank of Ireland alone would have the effect proposed Might not the void occasioned by the extinction of Bank of Ireland Paper be filled by proportionately encreased Issues of the private Banks of Dublin which seem to be complete competitors of the National Bank. This is a difficult question. The much surer remedy would be to compel or in some way to induce all the Dublin Banks to give in Exchange for their paper bills on London at a fixed date Query indeed whether all the Dublin Banks should give Bills on London (as the Edinburgh Banks do) or whether the private Dublin Banks should merely continue to give Bank of Ireland Notes, and the Bank of Ireland alone Bills on London. |
| p. 86, line 7 | Landholders and Stockholders resident in Ireland are unproductive Laborers—in other words are consumers at home of the Produce of the labor of others. If these unproductive Laborers reside in England and spend their income here, a proportionably greater quantity of the produce of Irish Labor is exported, and the Exportation of this Produce is to be set against the drafts which they draw on Ireland. |
| p. 99, footnote, line 1 | There were some [i.e. failures]. Alarm among holders of Country Bank Notes existed in both cases and a free issue of the best paper is certainly at all times the best means of allaying an alarm. In 1797 when an alarm existed not only were the Bank of England Notes not encreased, they were diminished in a very extraordinary degree namely at the rate of about ½ Million a week for several weeks together. |
| p. 100, line 5 | It is limited through the circumstances of the Notes being exchangeable for Bills on London or Bank of England Paper. The value of Country Paper in Great Britain necessarily therefore conforms itself to whatever is the value of Bank of England Paper and if the Value of Bank of England Paper is maintained (as it may be by the limitation of its quantity and the exclusive circulation in London which it enjoys) the value of Country Paper must be maintained also. If A (the London Paper) is equal to B (the current coin) and if C (the Country Paper) is equal to A., then C must also be equal to B. |
| p. 108, line 6 | The quantity did not perhaps increase in both cases in exactly the same proportion, but they must have been excessive in the same degree. I suspect that a large sum in Bank of England Notes is now kept by the Country Banks (perhaps 1 Million) which used not to be kept by them before the Bank Restriction as a fund for paying those who demand to have Country Bank Paper exchanged for Bank of England Paper Bank of England Paper stands in the place of a fund of Gold. |
| p. 126, line 2 | It does not appear to me to be expedient now to determine the period when the Bank Restriction Bill shall cease, except indeed that it ought to be made to cease in a moderate time after the termination of the War. While the War lasts (a War in which we shall be subject to many serious alarms of Invasion) the Bank of England ought as I conceive to be protected from the danger of having Gold demanded in indefinite quantities for the purpose of hoarding, a danger which Lord King has almost entirely omitted to treat of in his pamphlet. The Bank however ought not to be protected against that demand for Gold which results from the long continuance of an unfavourable Exchange. |
| Lord King himself admits in many parts of his book that the Bank of England is able by the restriction of its Paper to remedy the unfavourableness of the Exchange. If then the restriction of its paper will not fail to rectify the Exchange, it can only be necessary that Parliament should resort to such measures as shall be sufficient to secure this Restriction. Measures short of that of compelling the Bank soon to open, let the alarm of Invasion be what it may, would unquestionably produce the Restriction desired. Indeed it may be doubted whether the Bank has not at this time (April 1804) almost sufficiently confined its paper to turn the Exchanges in our favor. I conceive that if the Committee of the House of Commons on Irish Currency now sitting were to state in their Report to the House in distinct language that they are persuaded that a reduction of Bank Paper must have a tendency to improve the Exchange even this hint coming from such a quarter and applying itself as it necessarily [would] to the Bank of England as well as that of Ireland would have all the desired effect. The Directors of the Bank of England if they have erred at all, have erred but a little and their Error has resulted from the circumstance of their not sufficiently perceiving the great and important principle which Lord King has so well laid down, namely that an Excess of Paper is the great radical cause of a long continued unfavourable Exchange |
| p. 134, line 14 | Does not this passage show the unfairness of estimating the depreciation of Bank of England Paper by a comparison between the Market price and Mint price of Silver. |
Titles (by Subject) 
