The unnatural state of things induced by the war had now brought about a great change in our currency. As we could manage to get in our goods to the Continent by one opening or another, but could not get the produce of the Continent in return, it would have appeared that we must be paid in cash, and that the balance of specie must be in our favour; but this was not the case. By our enormous payments to our troops in Spain, Portugal, and Sicily, as well as in the East and West Indies, and by our heavy subsidies, gold had flowed out of the country so steadily that there appeared very little left in it, and bank paper had taken its place. On the Continent, impoverished as they were, the people tenaciously clung to their gold, and Buonaparte alone could draw it from them in taxes. He always took a heavy military chest with him on his expeditions, and his officers also carried the money necessary for themselves in their belts, or otherwise about their immediate persons. The gold being enormously diminished in quantity in England, was carefully hoarded on all hands, thus again increasing the scarcity, and raising the value of it. The price of bullion had risen from twenty to thirty per cent., and here was a further strong temptation to hoard or send guineas to the melting-pot. This state of things led a certain class of political economists to call for a repeal of the Act for suspension of cash payments, and Francis Horner obtained a committee of inquiry into the causes of the decrease of gold and the increase of paper: and this committee came to the conclusion that the true cause of the evil lay in the excess of paper, and that the way to restrain it would be to allow the demand for gold at the Bank. But the truth was that the cause of the evil was not the excess of paper, but the enormous diminution of gold; and to have opened a legal demand for gold which could not be had would only have produced a panic, and a complete and horrible assassination of all credit and all business. But there were clearer-sighted men in Parliament, who declared that, though bullion had risen in price, bank-notes would still procure twenty shillings' worth of goods in the market, and that they were not, therefore, really depreciated in value. That was true, but guineas had, notwithstanding, risen to a value of five- or six-and-twenty shillings, and might be sold for that. Gold had risen, but paper had not fallen; and gold could not take the place of paper, because it did not, to any great extent, exist in the country; if it had, paper must have fallen ruinously. Mr. Vansittart and his party, therefore, moved resolutions that the resumption of cash payments being already provided for six months after the conclusion of peace, was an arrangement which answered all purposes, and ought not to be disturbed; that this would keep all real excess of paper in check, and leave gold to resume its circulation when, by the natural influence of peace, it flowed again into the country. These were, accordingly, carried.

But the bullionists were still bent on forwarding their scheme, or on throwing the country into convulsions. Lord King announced to his tenants in a circular letter that he would receive his rents in specie or in bank-notes to an amount equalling the advanced value of gold. This raised a loud outcry against the injustice of the act, which would have raised the rents of his farms twenty or more per cent.; and Lord Stanhope brought in a Bill to prevent the passing of guineas at a higher value than twenty-one shillings, and one-pound banknotes at a less value than twenty shillings. There was a strenuous debate on the subject in both Houses. In the Lords, Lord Chancellor Eldon demonstrated the enormity of people demanding their rents in gold when it did not exist, and when, if the person who could pay in notes carried these notes to the Bank of England, he could not procure gold for them. He denominated such a demand from landlords as an attempt at robbery. Yet the Bill was strongly opposed in both Houses—in the Commons by Sir Francis Burdett, Sir Samuel Romilly, Brougham, and others. It underwent many modifications, but it passed, maintaining its fundamental principles, and landlords were obliged to go on taking their rents in paper.

But the agitation of this question produced a strong sensation on the Continent. Buonaparte, who watched every movement of the British Parliament and Government with the deepest anxiety, immediately seized on the discussion as a proof that Great Britain was fast sinking under his Continental system. That system, indeed, was rapidly prostrating the Continent. From all sides complaints had long been pouring in upon him that the suppression of commerce was ruining the great mercantile cities—Hamburg, Bremen, Amsterdam, Rotterdam, Antwerp, Naples, Genoa, and the other parts of Italy; and that it was diffusing universal poverty and distress. The breach which the Emperor Alexander had made in it, and the determined resistance which the Swedes made to it, had caused him to feel the necessity of relaxing the rigour of his system. But now he took fresh courage. He believed that Great Britain was at her last gasp; that there would speedily be universal rebellion within her from starving citizens; and he held on in his plan, and this proved his ultimate destruction; for it made him all the more determined to coerce Russia, and thus precipitated his fatal campaign against that country.

After violent debates on the subject of Catholic emancipation, but with the usual negative result, Parliament was prorogued on the 24th of July. Ministers proceeded to prosecute the war in the Peninsula with increased vigour. Lord Wellington needed all the support they could give him. Notwithstanding his success and the millions of money that Great Britain was sending to Portugal, the Portuguese Government continued to annoy him, and showed itself as ignorant, as meddling and as unthankful as the Spaniards had done. Though he and his army were the sole defence of the country, which would at once have been overrun by the French were he not there, and though he was fighting their battles and defending their persons at the expense of England, they appeared to have not the slightest sense of these obligations, but continued to pester him on every possible occasion. They endeavoured to compel him to maintain the Portuguese army, too, by themselves neglecting to furnish it with pay and provisions. They demanded to have the expenditure of the very money remitted for the needs of the British forces. They raised a vast clamour because the soldiers cut down timber for firewood. To all these disgraceful annoyances Lord Wellington replied with a wonderful command of temper, but with firmness and plain-spokenness. His dispatches abound with complaints of the scurvy treatment of the Portuguese authorities. The aspect of things in Spain was worse. There the Spaniards continued to lose every force that they raised, but nevertheless to criticise all the movements of Wellington as if they knew, or had shown, that they understood the management of campaigns better than he did. In fact, if the interests of Spain and Portugal alone had been concerned, the best thing would have been to have quietly withdrawn, and have left the French to trample on them, as a proper punishment for their stupid and ignorant pride. But the attention which Wellington compelled Buonaparte to give to the Peninsula, and the constant drain which this war was to him of men and money, were enabling Russia, and Sweden, and the north of Germany to prepare for another and decisive struggle with the oppressor.

MARSHAL BERESFORD. (From the Portrait by Sir W. Beechey, R.A.)

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We left Wellington occupying his impregnable lines at Torres Vedras during the winter, and Massena occupying Santarem. Buonaparte thought he could suggest a mode of putting down the provoking English general which Massena did not seem able to conceive. After studying the relative situations of the belligerents, he sent word to Soult to make a junction with Massena by crossing the Tagus, and then, as he would be much superior in strength, to continually attack Wellington, and cause him, from time to time, to lose some of his men. He observed that the British army was small, and that the people at home were anxious about their army in Portugal, and were not likely to increase it much. Having thus weakened Wellington, as soon as the weather became favourable they were to make an attack from the south bank of the Tagus. But there were two difficulties to overcome of no trivial character in this plan. Wellington was not the man to be drawn into the repeated loss of his men, and the Tagus was too well guarded by our fleet and by batteries for any chance of taking him in the rear. However, Napoleon sent Massena a reinforcement, under General Drouet, who carried along with him a great supply of provisions: he assembled an army in the north of Spain, under Bessières, of seventy thousand men, and Soult moved from Cadiz, leaving Sebastiani to continue the blockade, and advanced to make the ordered junction with Massena. But he deemed it necessary, before crossing into southern Portugal, to take possession of Badajoz. In his advance, at the head of twenty thousand men, he defeated several Spanish corps, and sat down before Badajoz towards the end of February. Could Massena have maintained himself at Santarem, this junction might have been made; but, notwithstanding the provisions brought by Drouet, he found that he had no more than would serve him on a retreat into Spain. He had ten thousand of his army sick, and therefore, not waiting for Soult, he evacuated Santarem on the 5th of March, and commenced his march Spain-ward. Wellington was immediately after him, and the flight and pursuit continued for a fortnight. To prevent Massena from finding a temporary refuge in Coimbra, Wellington ordered Sir Robert Wilson and Colonel Trant to destroy an arch of the bridge over the Mondego, and thus detain him on the left bank of that river till he came up. But Massena did not wait; he proceeded along a very bad road on the left bank of the river to Miranda, on the river Coira. Along this track Massena's army was sharply and repeatedly attacked by the British van under Picton, and suffered severely. Ney commanded the rear-division of the enemy, and, to check the advance of the British, he set fire to the towns and villages as he proceeded, and, escaping over the bridge on the Coira, he blew it up. But before this could be effected, Picton was upon him, accompanied by Pack's brigade and a strong body of horse, and drove numbers of the French into the river, and took much baggage. Five hundred French were left on the ground, and to facilitate their flight from Miranda, which they also burnt, they destroyed a great deal more of their baggage and ammunition. Lord Wellington was detained at the Coira, both from want of means of crossing and from want of supplies; for the French had left the country a black and burning desert. The atrocities committed by the army of Massena on this retreat were never exceeded by any host of men or devils. The soldiers seemed inspired with an infernal spirit of vengeance towards the Portuguese, and committed every horror and outrage for which language has a name. The Portuguese, on the other hand, driven to madness, pursued them like so many demons, cutting off and destroying all stragglers, and shooting down the flying files as they hurried through the woods and hills. The whole way was scattered with the carcases of the fugitives.

A quarrel took place between Massena and Ney on the subject of attacking the British and Portuguese who invested Almeida, where was a French garrison, and Ney threw up his command, and retired to Salamanca. Massena was daily expecting the junction of Soult, who had taken Badajoz; but Wellington did not give time for this junction. He attacked Massena at Sabugal on the 3rd of April, and defeated him with heavy loss. Massena then continued his retreat for the frontier of Spain, and crossed the Agueda into that country on the 6th. Wellington then placed his army in cantonments between the Coa and the Agueda, and made more rigorous the blockade of Almeida.