utmost amount, which the country could be competent to bear. But the money value of all property having advanced with the progress of taxation and of wealth, the crisis anticipated has passed without convulsion; and a debt greatly exceeding six times the amount in question not only exists and is borne without affecting the national prosperity, but a sinking fund is also provided for, which increases the weight of taxation nearly 50 per cent. on the produce required for the payment of the interest. So that in effect, the same pressure is experienced, the same burthen supported, as if the capital debt were 50 per cent. greater than its actual amount, and the whole sum now applied to the payment of the interest and of the sinking fund, were required exclusively for the payment of interest alone.

Hence the conclusion, that the United Kingdom, in its present state of property, and the present money value of that property, is competent to bear a permanent debt, one half beyond its present amount. The revenue necessary to provide for it is actually levied -the difference consists in the application-in the pressure there is no difference.

Suppose a country burthened with taxes, bearing any given proportion to the aggregate amount of the money value of its whole produce of land, labor, mines, fisheries, colonies, &c.—that proportion will be clearly affected by any degree of further taxation: nor is it less obvious to reflecting men, that a diminution in the money value of the whole produce, leads to the same inevitable consequences, although no addition be made to the taxes.

The truth is, either process destroys the previously existing proportion.The same powers to bear an additional burthen, or diminished powers to bear the same burthen, present the same result. The equilibrium is deranged, and the scale kicks the beam. The weight of taxes will be found in either case, oppressive if not intolerable.

But if on the other hand, taxation remain unchanged, and the money value of produce be not deteriorated-that equilibrium, so indispensable to the prosperity of the state will be preserved. To preserve it therefore, and to protect the money value of produce from deterioration is clearly the duty of the statesman.

Let us examine, whether that duty will be performed by a repeal of the Bank Restriction Act and by a recurrence to cash payments.

And first, as to the practicability of obtaining an adequate amount of gold; we must then consider the means of effectually applying it, if obtained, to the intended purpose-to the maintenance of a metallic circulation.- With this view, we will assume that previously to the war, there existed in circulation and

in the coffers of the bank an amount sufficient, together with a moderate addition of bank notes, and of country bank notes, for the purpose of carrying on the internal commerce of the country, and of making adequate provision against a run.

The amount of this compound circulating medium, it will doubtless be admitted, bore a certain, necessary, though unascertainable proportion to the aggregate money value of every description of property.

It will also be admitted, that since that period, the progress of taxation and other causes, have operated upon such money value, and that the same extent of property, and the same, or a similar quantity of exchangeable commodities then supposed to exist, bear at this moment, and have borne for some time past, a largely encreased money value.

Now, as there did exist a certain, necessary, though unascertainable proportion between the aggregate of the circulating medium and of the money value of property-it follows that that proportion must be maintained; and the circulating medium be increased up to the level of that indefinite proportion, which is silently determined and regulated by the demand-that is, by the amount or money value of commodities requiring to be exchanged, and by the degree of activity which in commercial transactions, may happen to prevail.Hence a diminished circulating medium tends to check public prosperity-to embarrass the operations of commerce,-and most materially to affect the revenue of the state.

Vast additions have also been made to this mass of property, and for some years past the demand for bank paper has required and maintained, a circulation of about 27 millions, in addition to 18 or 20 millions of country bank notes ;-an amount immensely beyond the circulation which existed previous to the war.

If then the Restriction Act be suffered to expire in July next, the bank and the country bankers must be provided with a stock of gold, not such as they thought sufficient for their former limited scale of circulation,-but such a stock as shall be considered adequate to the present extended circulation, and to the precautions which a paper medium payable on demand in cash, shall dictate to the prudence and discretion both of the bank directors and of country bankers.

Whence is this stock of gold to be obtained? The continental states requiring gold for their own circulation, cannot afford any large amount to be withdrawn, and the poverty of the South American mines precludes the expectation of supply,-whilst occasional remittances of bullion from other quarters are too insignificant to claim attention.

It should seem, if these views be correct, that a supply of gold sufficient to support a circulating medium of the present indispensable extent, is wholly impracticable. To the effect of a diminished or inadequate circulation the country will therefore be exposed, by any attempt to withdraw from the bank the protection of the Restriction Act.

Let us, however, assume for a moment, the practicability of collecting the mass of gold required,-we have then to consider the means of securing its permanent application to the intended pur

pose.

The perfect confidence of the public in bank paper is certainly calculated to relieve the directors in ordinary cases, from the apprehension of a run; but it is against extraordinary cases, that prudence and duty require them to be at all times prepared. Such may occur, and notes pour in to be exchanged for gold, although that confidence shall not have abated- an unfavorable state of the exchanges may induce the export of gold-bullion will then rise above the mint price, and cannot therefore be purchased so cheaply as coined gold; which is, by conversion of bank notes, obtainable from the bank, at the rate of 3/. 17s. 10žd. per oz.-the mint price. -The bank is therefore the cheaper market, and to that every dealer will have recourse; for it cannot be imagined, that any one will go to the open bullion market and pay an advanced price, so long as a supply can be obtained from the bank.

Such was the demand for exportation, arising from the depressed course of exchange, that we have recently seen bullion 15 to 20, per cent. above the mint price.

At this moment the course is considerably under par, and still admits of the advantageous export of gold. And had the recent harvest been as unproductive in wheat, as it has proved in other species of grain, it is more than probable, that the importation would have caused by its extent, a further and very serious depression. In such case, the large profit on exportation would inevitably induce demands on the bank to an incalculable amount.

Other similar instances might be noticed, which in the very nature of commerce must frequently occur. It is ever fluctuating, and the balance of trade will occasionally change sides.

In these or similar circumstances, it is manifest that the bank would be exposed to a run of indefinite extent, and the coin of the realm be speedily found more current in Paris and Amsterdam, than in London.

This anticipation of the future, is borne out by the experience of the past and the recent cash payments of the bank, have had the effect of partially supplying the French, rather than the British capital, with a metallic currency!

:

Against the temptation of enormous profits, the penalties of law have ever proved a feeble barrier and whilst, at the risk of coufiscation, the hardy adventurer will export coin in its own shapethe more timid will previously disguise it by the operation of the crucible. By either process, the law is violated.-Both are therefore criminal, but the one being completed by "Swearing off,' frequently involves the deeper guilt of wilful perjury.

By these means, gold coin rapidly disappears, and the object of giving to the United Kingdom a permanent metallic currency, is defeated.

. It may be said, and truly said, that with a change in commercial relations, gold will again return. No doubt:-reverse the circumstances assumed-and a course of exchange unfavorable to Paris or Amsterdam, will induce the remittance to London, as a course unfavorable to London, had previously induced its remittance to Paris or Amsterdam. A new supply of gold is thus obtained but since the part of it converted into bullion furnishes only the material for coinage, the labors of the mint are again in requisition, and the good citizens are once more gratified with a probably transient, though somewhat costly glimpse of St. George and the Dragon.

"Urnasque frustra Danaides plenas ferunt."

And surely the wisdom of that policy may be considered questionable, which prefers the certainty of an immediate evil, and of the greater magnitude, to the chance of one that is remote; to a contingency which cannot become formidable, or take us by surprise. Its approach, if ever realised, will be gradual, and its progress easily checked. But at this moment, when the circulation appears in a healthy state, why apply to the doctor? Is it not more rational to decline his interference, until at least, some slight symptoms of disease shall have required and have furnished data for the exercise of his skill? Why not wait until we shall discover that there is something to be cured, something of a really morbid character existing, ere we tamper with the body politic, or expose it to hazard, by a measure of imaginary precaution ?- -Delay will not diminish the efficacy of the projected nostrum ; and to it recourse may be had at any time, if nothing better can be found. Since then, in the ever fluctuating relations of commerce between this and other countries, dangers and difficulties may attend the repeal of the Bank Restriction Act-let us consider the practicability of establishing a currency of such a nature and so effectually guarded, that it shall not be liable to depreciation.

Those who contend for the necessity of subjecting the bank to take up its notes in gold on demand, conceive that regulation to VOL. XIII. NO. XXVI.

Pam.

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be the only test of value, and the only means of preventing an excessive issue of paper.This opinion carries with it an air of truth; and if internal circulation were the sole object, it might be really true. Gold might then be received as an immutable standard, and a pound note be held as immutably to represent such proportion of an ounce of gold, as twenty shillings bear to 31. 17s. 10 d., the mint price.

But our foreign commerce, and connexions with foreign states, materially alter the case-since both affect the value of gold, and subject it to fluctuation. Thence the irresistible inference, that it cannot, in such circumstances, constitute an immutable standard.

Yet, in denying this faculty to gold, it is not intended to deny also the existence of any power to adjust or regulate a paper medium. On the contrary, it is considered, under certain modifications, to be susceptible of that application.

Whenever bullion is at the mint price, the bank may safely engage to pay in gold all the demands which shall be made in exchange for its notes. One hundred sovereigns, weighing about 25oz. .682, would be given for one hundred pound-notes: but if the market price of bullion, instead of 31. 17s. 10 d., be 41. per oz.-is it reasonable to subject the bank to the payment of an equal weight at the advanced as at the standard price?- The bank would certaiuly refuse in such case, to sell bullion at less than 47.-Why then should it be compelled to accept 31. 17s. 10 d. for coin of the same standard ?

The price of gold is affected, in common with every other article of merchandize, by supply and demand. When the demand exceeds the supply, less gold will be given in exchange,—and if that demand should have raised the price to 47. per oz., the bank, in delivering twenty-five ounces of gold for one hundred pound-notes, will have given their value, or money's worth, as it will give no more, when the price is 3l. 17s. 104d. per oz. in delivering the greater weight of 25oz. .682, for the same amount of notes.

An agio table, calculated for each intermediate price of gold, from 31. 17s. 10d. per oz. to 5l. or upwards, instantly showing the agio for any given sum, would facilitate the despatch of business. It is indeed in transactions of a certain magnitude only, that such reference could be necessary, minor demands being payable in silver, at the option of the bank."

Were silver as abundant as bank paper, and to be made the stan

• Should this arrangement be objected to, as holding out to the bank a new source of profit-it may, if it so prove, furnish a proper subject for discussion on the renewal of the charter; or admit of some other modifications advantageous to the public. It must however be observed, that the encrease of the dead capital must operate against the chance of any ma terial ultimate gain.