Notes.

Aug.14, 1847.Aug.12, 1848.Increase.Decrease.Population.
Bank of England,£18,784,890£18,710,728—£74,162
Private Banks,4,258,3803,520,990—737,390England and Wales.
Joint Stock Banks,2,991,3512,479,951—511,40019,500,000
Total in England,26,034,62124,711,669—1,322,952
... Scotland,3,455,6513,035,903—419,748Great Britain and Ireland.
... Ireland,5,097,2154,313,304—783,91129,500,000
United Kingdom,34,587,48732,060,876—2,526,611

Thus showing a decrease of £1,322,952 in the circulation of notes in England, and a decrease of £2,526,611 in the circulation of the United Kingdom, when compared with the corresponding period last year.[17]—Times, Aug. 29, 1848.

Thus, in the last thirty years, the population of Great Britain and Ireland has increased from 19,000,000 to 29,500,000; while its currency in paper has decreased from £60,000,000 to £32,000,000. Above fifty per cent has been added to the people, and above a hundred per cent to their transactions, and the currency by which they are to be carried on has been contracted fifty per cent. Thirty years ago, the paper currency was £3, 5s. a head; now it is not above £1, 5s. a head! And our statesmen express surprise at the distress which prevails, and the extreme difficulty experienced in collecting the revenue! It is no wonder, in such a state of matters, that it is now more difficult to collect £52,000,000 from 29,000,000 of people, than in 1814 it was to collect £72,000,000 from 18,000,000.

The circulation, it is particularly to be observed, is decreasing every year. It was, in August 1848, no less than £2,500,000 less than it was in August 1847, though that was the August between the crisis of April and the crisis of October of that year. And this prodigious and progressively increasing contraction of the currency, and consequent drying up of credit and blasting of industry, is taking place at the precise time when the very legislators who have produced it have landed the nation in the expenditure, in three years, of £150,000,000 on domestic railways, independent of a vast and increasing import trade, which is constantly draining more and more of our metallic resources out of the country! Need it be wondered at that money is so tight, and that railway stock in particular exhibits, week after week, a progressive and most alarming decline.

But, say the bullionists, if we have taken away one-half of your paper, we have given you double the former command of sovereigns; and gold is far better than paper, because it is of universal and permanent value. There can be no doubt that the gold and silver coinage at the Mint has been very much augmented since paper was so much withdrawn; and the amount in circulation now probably varies in ordinary times from £40,000,000 to £45,000,000. There can be as little doubt that the circulation, on its present basis, is capable of fostering and permitting the most unlimited amount of speculations; for absurd adventures never were so rife in the history of England, not even in the days of the South Sea Company, as in 1845, the year which immediately followed Sir R. Peel's new currency measures, by which these dangers were to be for ever guarded against. It is no wonder it was so; for the bill of 1844 aggravates speculation as much in periods of prosperity, as it augments distress and pinches credit in times of adversity. By compelling the Bank of England, and all other banks, to hold constantly in their coffers a vast amount of treasure, which must be issued at a fixed price, it leaves them no resource for defraying its charges but pushing business, and getting out their notes to the uttermost. That was the real secret of the lowering of the Bank of England's discounts to 3 and 2-1/2 per cent in 1845, and of the enormous gambling speculations of that year, from the effects of which the nation is still so severely suffering.

But as gold is made, under the new system, the basis of the circulation beyond the £32,000,000 allowed to be issued in the United Kingdom on securities, what provision does it make for keeping the gold thus constituted the sole basis of two-thirds of the currency within the country? Not only is no such provision made, but every imaginable facility is given for its exportation. Under the free-trade system, our imports are constantly increasing in a most extraordinary ratio, and our exports constantly diminishing. Since 1844, our imports have swelled from £75,000,000 to £90,000,000, while our exports have decreased from £60,000,000 to £58,000,000, of which only £51,000,000 are British and Irish exports and manufactures.[18] How is the balance paid, or to be paid? In cash: and that is the preparation which our legislators have made for keeping the gold, the life-blood of industry and the basis of two-thirds of the circulation, in the country. They have established a system of trade which, by inducing a large and constant importation of food, for which scarcely any thing but gold will be taken, induces a constant tendency of the precious metals outwards. With the right hand they render the currency and credit beyond £32,000,000 entirely dependent on keeping the gold in the country, and with the left hand they send it headlong out of the country to buy grain. No less than £33,000,000 were sent out in this way to buy grain in fifteen months during and immediately preceding the year 1847. They do this at the very time when, under bills which themselves have passed, and the railways which themselves have encouraged, £150,000,000 was in the next three years to be expended on the extra work of railways! Is it surprising that, under such a system, half the wealth of our manufacturing towns has disappeared in two years; that distress to an unheard-of extent prevails every where; and that the Chancellor of the Exchequer has been obliged to borrow £10,000,000, in the last and present session of Parliament, during general peace?

Let it not be supposed this evil has passed away. It is in full vigour at the present moment. It will never pass away as long as free trade and a fettered currency coexist in this country. The disastrous fact has been revealed by the publication of the Board of Trade returns, that while, during the first six months of this year, our imports have undergone little diminution, our exports have sunk £4,000,000 below the corresponding months in last year. In May alone, the decrease was £1,122,000; in April, £1,467,000.[19] Beyond all doubt our exports, this year, of British produce and manufactures, will sink to £45,000,000, while our imports will reach at least £85,000,000! How is the balance paid? In Specie! And still the monetary laws remain the same, and for every five sovereigns above £32,000,000 lent out, a note must be drawn in! It may be doubted whether a system so utterly absurd and ruinous ever was established in any nation, or persevered in with such obstinacy after its pernicious effects had been ascertained by experience.

The manner in which these disastrous effects resulted, necessarily and immediately, from the combined operation of the bills of 1819 and 1844, is thus clearly and justly stated by Mr Salt, in his late admirable letter to Sir R. Peel on the subject.

"The potato crop failed, and an importation of food became necessary; the food was imported at a cost not exceeding one half per cent on the national wealth. It might have been paid for in goods or in gold, and the limit of the loss would have been the amount paid—a sum too insignificant, compared to the national resources, to have been perceptible—and the national industry could have replaced it in a few weeks.

"But the bill of 1819 had made gold the basis of our whole system; and, therefore, when the gold was exported to pay for the food, the whole system was broken up; and the bill provides that this calamity shall in every case be added to that of a bad harvest; that the abstraction of an infinitesimal part of our money shall destroy our whole monetary system; that the purchase of a small quantity of food shall cause an immense quantity of starvation, by destroying the means of distributing the food, and employing labour. If this were the only evil of the bill, its existence ought not to be tolerated an hour.

"Instead of placing the national credit and solvency on the broad and indestructible basis of the national industry and wealth, you have placed all the great national interest on gold, the narrowest and most shifting, and therefore the most unfit, basis it was possible to choose. You could not have done worse.

"The gold being in quantity perfectly unequal to effect the exchanges needful for the existence of society, an immense and disproportioned superstructure of paper money and credit became a compulsory result, and a certain cause of perpetually recurring ruin.

"In framing the bill of 1819 you do not appear to have had a suspicion of this consequence; but in 1844, after an interval of a quarter of a century, this much seems to have dawned obscurely in your mind; but, alas! what was your remedy?—enlarging and securing the too narrow and shifting basis? Not at all; you crippled and limited the superstructure. You left us subject to the whole of your original error, and provided a new one!

"The bill of 1844 provides that, in proportion as the gold money shall disappear, the paper money shall disappear also! Out of the money thus doubly reduced, the unhappy people are compelled to pay unreduced taxes; and out of the inadequate remnant to discharge unreduced debts, and to provide for the unreduced necessities of their respective stations. So the leaven of the law works its way through all society. The payments cannot be made out of these reduced means, the loss of the credit follows the loss of the money; the means of exchange, employment, and consumption are destroyed, and the world looks with amazement on the consummation of your work—the wealthiest nation in the world withering up under the blight of a universal insolvency; an abundance of all things beyond compute, and a misery and want beyond relief.

"The sole aim of your bill has been to convert paper money into gold. I have shown how signally you have failed in this one object, always excepting your special claim of converting £48,000,000 of paper money into £15,000,000 of gold, for which mutation I suspect few will thank you. In all other respects, the whimsicality of your fate has been to establish a universal inconvertibility. Labour cannot be converted into wages, East India estates, West India estates, railway shares, sugar, rice, cotton goods, &c.; in short, all things are inconvertible except gold. There has been nothing like it since the days of Midas.

"The facts, sir, are of your creation, not of mine. I cannot alter or disguise them. You have had confided to your administration, by our illustrious sovereign, this most powerful state, of almost unlimited extent and fertility—a people unrivalled in their knowledge, caution, skill, and energy, possessed of unlimited means of creating wealth, and out of all these elements of human happiness your measures have produced a chaos of ruin, misery, and discontent. You can scarcely place your finger on the map, and mark a spot in this vast empire where all the elements of prosperity do not exist abundantly; you cannot point out one where you have not produced results of ruin. Every resource is paralysed, every interest deranged; the very empire is threatened with dissolution. The Canadas, the West Indies, and Ireland, are threatening secession, and England has to be garrisoned against its people as against a hostile force; the very loyalty of English hearts is beginning to turn into disaffection. Review once more these vast resources, and these wretched results, and I trust you will not make the fatal opinion of your life the only one to which you will persist in adhering."