FOOTNOTES:

If permanent, it is incumbent upon the supporters of the Banking Restriction Act, who are the very parties at present refusing to relax one iota of our bondage, to show that their measure is well adapted for every political contingency. That, we apprehend,would require greater hardihood, and certainly more ingenuity, than they have yet enlisted on their side. There are many things besides a scarcity or a famine which may occasion a drain of gold. That metal has a peculiar facility of finding its own level; it is liable to sudden demands, and its price is variable accordingly. Were this country to be again engaged in a European contest like the last, we should have a recurrence of the drain of 1814, when gold was at the rate of £5, 8s. per ounce, or upwards of one pound ten shillings and two-pence above its present value. No political foresight, no legislative enactment whatever, can guard us against such a state of things; and the consequence would be an entire disappearance of bullion. According to our present system, the loss of bullion would necessarily produce such a contraction as would lay the credit of the country prostrate. All our extra circulation, founded on the metallic basis, would immediately be called in; taxes could no longer be paid, and the result would be a revolution or the sponge. Are the capitalists of the kingdom, who, we were told some time ago, were the chief supporters of Sir Robert Peel, anxious that the experiment should be made? We can assure them that if it is intended to maintain the circulation of the country permanently upon its present basis, they stand in imminent danger, not only of occasional panics, but of that repudiation which in America was the consequence of a similar tampering with the banks, and the like metallic delusion. At best they must make up their minds for the recurrence of many seasons as hard and as cruel as the present; and it will be well if many of their class are not involved in the ruin which is impending at this moment over the heads of the minor traders.

But, say some of the bullionists, this measure is not intended to be permanent. It is, like all other legislative enactments, subject to modification; and we are prepared, when occasion presses, to alter it accordingly. Why, then, in the name of common sense—nay, in that of common humanity—has not the alteration been made? Is it intended that the public shall sink beneath the pressure of this law before the smallest portion of its burden shall be removed? Is it wise to delay all relief until the Gazette is full, and to keep credit suspended at the very moment when it is most urgently and clamantly required? And what kind of law, we ask, is that which in prosperous times—that is, whenever gold is abundant—confessedly puts no check whatever upon speculation, but which, at the least turn of the tide, is an absolute engine of destruction? Look at it in any view, and we maintain that a more miserable instance of legislation upon false and contracted principles was never yet invented by the brain of a political economist.

The host of pamphlets which has recently issued from the press, upon this momentous and interesting topic, sufficiently demonstrates the pressing nature of the crisis. Whatever difference of opinion may be found amongst so many writers, with regard to the intermediate basis and proper representative of property, they are almost to a man combined in denouncing the impolicy of the late restrictions. Lord Ashburton, the advocate and apologist of the Bank of England, is at one with Mr Enderby, the able opponent of the gold standard, as to this particular point. They are all agreed that the system which professes to rectify an inevitable drain of gold, by crippling the trade of the country, and forcing down the value of its property, is nothing short of absolute infatuation, and that, considered by itself, it admits of no intelligible defence. It would be well, therefore, if an effort were made, in the first instance, to get rid of the odious and absurd restrictions, or at least to substitute for the present miserable driblet, a much larger amount of paper currency, which may be based upon government securities. There is but one opinion prevalent throughout the country with regard to the present insufficiency of the currency, so long at least as the Bank is compelled by statute to deprive us of the means of fair and legitimate accommodation. Sir Robert Peel has placed the directors in this anomalous and invidious position, that theymustput on the screw whenever there is a prospect of adverse exchanges;and the immediate effect of that measure is a stoppage of trade, and at the same time a depression in the value of every kind of merchandise and product. Taken singly, this is an evil of the very worst description—in fact nothing worse could be expected from the most formidable combination of natural and political causes. Taken in connexion with the late tariffs, which, without securing reciprocity, have opened the home market to the competition of the foreigner, who is less taxed and cheaper fed than our own redundant population, each recurrence of it is a blow to our commercial prosperity, which if often repeated would bring us to the verge of ruin. The first measure, therefore, which ought to be taken—and we entreat the serious attention of every man who understands the currency question to this—is to emancipate the Directors of the Bank of England from their present false position, by removing the restriction of their paper issues, or at least by fixing these at a point which will enable them to supply the ordinary wants of the community, without reference to an accidental or inevitable drain of bullion, so that the internal trade and production may never be checked so long as there is a remunerative demand. A similar regulation must of course be made with regard to the country bankers; and were this done, we have very little fear indeed that any crisis at all equal to the present one could arise. But we must not be left in absolute dependence for our circulation upon the state of the harvest, or cripple labour at the very season when employment is most urgently required.

We do not say that the repeal of the Act of 1844, or the increase of the paper issues to a larger fixed point, can set the question of the currency at rest. No thinking man who has devoted his time and energies to the study of our monetary history, would be bold enough to make so rash and confident an assertion: on the contrary, we think that the time is not far distant, when the leading theories of the bullionists must be thoroughly probed, and the consideration of the expediency of a fixed gold standard most seriously and deliberately resumed. The experience of some thirty years of peace has furnished data to us which were not known to the older political economists, and we are now far better enabled to explain the phenomena of commercial fluctuation. But it would be extremely unwise at the present moment, when a palpable and tangible evil is before us, to attempt too wide a reformation, and so to peril the chance of a present amendment, on the necessity of which we are all most thoroughly agreed.

From some quarters we have heard an expression of extreme surprise that the late Premier, who cannot but be awake to the mischief which he has so wantonly caused, should have been so obstinate and inflexible in his adherence to the restrictive system. Very little consideration indeed is requisite to discover the reason. Upon this question of the currency the whole character and repute of Sir Robert Peel as a financial minister are staked, and he dare not abandon his measure of 1844, without tacitly admitting that he has committed a most serious and unpardonable blunder. Accident has intervened to postpone any actual test of the efficiency of his other measures. We do not yet know what effect the alteration of the corn laws may produce upon the welfare of the nation in an ordinary year, or whether any of the blessings so abundantly promised may be realized to the poor without a more than corresponding depression. The tariffs abroad continue still hostile and unrelaxed, and although the smaller manufacturer, artisan, and workman, are already beginning to feel the baneful effects of foreign competition in the home market, their cry is not yet loud enough to excite a large share of the popular commiseration. Two great events stand prominently forward in the aspect of the present year—the scarcity and high price of food, and the want of commercial accommodation among ourselves.

The first is the act of Providence. No human foresight, no political skill, could have prevented it, and the scourge has mercifully fallen at a time when the demand for labour has materially lessened its severity in Great Britain. But that same scarcity, byleading to an exportation of the precious metal, has been undoubtedly the means of testing the soundness of our monetary system. As the prosperity of these islands, and our wonderful ascendency in the great markets of the world, depend upon the state of our trade and our manufactures at home, it was obviously the duty of a minister, who, more than any other, professed his intimacy with commercial principles, to take care that the evil of a scarcity should not at the same time be combined with the still greater one of a monetary crisis. If gold must be paid away in order to purchase the necessary supply of food for our population—if in addition to our own wants we are compelled to ward off starvation from the thoughtless and unenterprising Irish—we were doubly bound to take care that our great staple resources, our trade and our manufactures, should not suffer from any cause over which we had the evident control. And yet, how do we stand at the present moment? No sooner does the drain of bullion begin, than the Directors of the Bank of England, placed by this odious and uncalled-for measure of Peel’s in sudden jeopardy of their charter, begin to put on the screw. The country bankers, who must take their cue from, because they are rendered entirely subordinate to the great establishment in London, are compelled to follow the example. First of all the rates of discount are raised, and then credit is peremptorily refused. This, be it remarked, is at a time when the solvency of individuals is unsuspected,—were it otherwise, the crash must have been tremendous ere now. The enormous bulk of therealcirculation of the country, which is represented by bills of exchange, and which never can be estimated with any thing like an approximation to its amount, is thus instantaneously checked. The Banks cannot discount—the bills become useless, and the property on which they are based, can not now command its representative. Fifty thousand pounds of silver bullion could not command five thousand pounds of money in the public market of London. The manufacturer saw his credit stopped, his bills unnegociable, but he had still to pay the weekly rate of wages, or suspend labour, as indeed in many instances has been done. And all this, because Sir Robert Peel has forced the fountain of our currency to run dry. And then comes a depreciation of the value of property, the extent of which would be almost incredible, were not every one of us, except the Capitalist and the Annuitant, aware of it by melancholy experience. According to Lord Ashburton—“It would not be easy to estimate this depreciation, extending over all merchandise, stocks, railway shares, &c.; it would probably not be overstated atFROM TEN TO TWENTY PER CENT.; but what is worse, it has paralysed this property in the hands of the possessors, rendered it unavailable towards meeting their engagements, and thus produced in many cases pecuniary sacrifices much beyond the mere depreciation of the property itself. It has further occasioned the suspension of the execution of orders from our customers in every quarter, thus distressing manufacturers, and impeding those very operations which would have corrected the tendency to an unfavourable balance of trade, and given safety to the circulation of the Bank.”

Now whatever we may think of the extreme candour of the Right Honourable Baronet, it is perhaps rather too much to expect from human nature that an individual who has been the cause of all this monstrous mischief, should stand forward at once, and manfully plead guilty to the charge. Sir Robert Peel has not yet played out his full hand of political cards; and he is perfectly well aware that after such an admission, very few persons indeed would be inclined to cut in with him for a partner. In short, were he now to acknowledge himself in the wrong, it would be at the sacrifice of his sole remaining qualification as a statesman—theprestigeof his financial sagacity. If he loses this, faint though the recommendation be compared with the far higher qualities of consistency and open dealing, he is indeed a bankrupt in his fame! Need we wonder then that he clings to his darling measure, with a tenacity absolutely startling when we reflect on his former degrading versatility? Need we wonder that he eagerly attemptsto fasten the blame of the monetary pressure upon the railroad speculators, the Bank Directors, or any other body of men who can at all be brought into question? As to the Bank Directors, we quite agree with Lord Ashburton that it is most unfair to make them the scape-goats in this matter. Had they not been bound down by stringent statutory fetters—had they been allowed to use the common caution of every commercial dealer by measuring the amount of their accommodation by the known responsibility of their customers, there would have been no financial crisis. But Sir Robert, in his infinite wisdom, would not suffer them to retain the prerogative of thinking and rational beings. He made them mere machines for contracting the circulation, and prohibited them from supporting credit: and surely they are not blameable if they shaped their conduct according to the clear letter and distinct direction of the law. In dealing with the railway shareholders Sir Robert Peel cuts even a sorrier figure. He talks about absorption of capital and over-trading, as if these things had in reality any thing to do with an arbitrary restriction of the currency. Now we do not require to be told that there is a certain limit at which accommodation must stop; but we maintain that it is the function of the banker to decide when that limit has arrived in the case of each particular customer. If a man has embarked the whole of his available capital in undertakings which are not yet profitable, or which do not speedily promise to become so, it is unquestionably in the option of the banker at his own risk to refuse or to increase his credit. But, as matters presently stand, not only has the banker no such option, but he cannot afford the required accommodation even to parties whose capital and property are undoubted, for the very simple reason that the law, as amended by Peel, deprives him of the means of doing so. If gold goes out of the country, from whatever cause, the issues must be correspondingly contracted. And is it expected that the whole ordinary business of the country can be conducted with something like one half of its usual amount of circulation? It will not, we presume, be denied by Sir Robert Peel and his Whig financial adherents that the increase of internal railway enterprise, and the vast additional labour which it may be said to have created, require a larger amount of ordinary circulation than in the year when the Bank Restriction Act was passed. And yet, not only have no means been taken to provide for such an expansion, but when the scarcity and drain arise, and the issues are arbitrarily contracted, our candid economists, instead of acknowledging their own normal error, have the coolness to attribute the pressure to the employment of labour at home! Had it not been for that labour and the expenditure of capital among ourselves, the situation of the working classes during the past winter, when the prices of provisions were so high, would have been lamentable indeed.

However, since the currency debate in the House of Commons, Sir Robert Peel seems to have changed his ground a little. It is curious to remark that, in all these financial discussions, the members of the present administration appear as absolute ciphers. They hardly profess to understand the question, but give their absolute faith to the doctrines of Sir Robert, who, with some two or three of his remaining adherents, is put forward to do battle, with the Protectionists and the mercantile party. The member for Tamworth is now desirous of falling back upon his old bullionist theories; and, with the utmost gravity, has invited a serious discussion upon the following subject of debate, “What is a pound?”

The object of this question is sufficiently clear. The astute ex-minister, finding himself so vigorously assailed on all quarters, for the absolute failure of his model banking act, and being unable to defend it upon any intelligible principles, would fain rake up a point upon which the opinions of his opponents differ, and so escape from the dilemma under a cloud of contradictory theories. It is an old device, and not a very creditable one; but we trust that, on the present occasion, it may prove utterly unavailing. The question is not now of the convertibility or inconvertibility of paper; for,if it were absolutely this, there are materials enough in Sir Robert Peel’s own banking measures to refute the notions which he professes to maintain as a principle. His own currency is not altogether based upon gold.Fourteen millions of the Bank of England’s paper is unrepresented by the precious metals; and yet every one of these notes is an actual engagement to pay the bearer of it in gold! Notwithstanding all the arguments of the bullionists, the plain matter of fact is just this, that the Bank of England, like every other institution of the country, is substantially based upon credit,and that it never had, at any one time, the means of liquidating its engagements by payments in specie. The issue, therefore, of paper, as it cannot be made to depend entirely upon the amount of hoarded gold, ought to have reference simply to the absolute wants of the community—wants which are, as all experience has shown, remarkably but inevitably variable, and which must be supplied in order that trade, and manufactures, and agriculture may go on, and that our internal products may adapt themselves, with out any difficulty, to the demand.

The question as to the real nature of a pound is useless at the present time. We are not now discussing the older banking acts, but the wretched abortion of 1844, which has led to this unnatural crisis. It is, in fact, a question which ought not to be mixed up with the others, because if, as Sir Robert Peel maintains, a pound is neither more nor less than a piece of metal of a certain weight and fineness, to which he, in opposition to the practice and experience of the whole world beside, has attempted to give a fixed unvarying price. He should in the first instance be prepared to defend it as the sole basis for every kind of representative circulation. In short, if his theory be correct, no banker should be permitted to issue a note, unless he has within his coffers a “pound,”—that is, a sovereign, to redeem it. Were the bullionists consistent, such indeed would be the proper result of their arguments, and the consequence would be, that at the present moment the legal circulation of England would have been something under ten millions. We shall not pause to demonstrate the absurdity of such a position, because it carries distinctly upon its face its own triumphant refutation. It follows therefore, and is admitted, that the basis of our circulation is mixed—part of it, which fluctuates, being the representative of these precious “pounds,” and the larger portion being based on credit, or inconvertible government securities.

What is the use then of arguing about a “pound,” when our paper, if called in, could not by any possibility realise it? We do not in the slightest degree deprecate the discussion at a future time; on the contrary, we most earnestly hope that the whole subject may engage the early attention of the next Parliament, for we are thoroughly convinced that the more it is sifted, the more clear and palpable will become the fallacies of our financial empiric. But we frankly avow our anxiety that he may not be permitted through such a begging of the question, to escape from his present difficulties. Let him show, if he can, that his Act of 1844 was the natural and inevitable result of his previous measures, and then we may be in a situation to condemn the whole of them together. But if it is not so, but a mere device of his own to show his admirable mechanical skill, let him defend it on its own merits. That it has acted banefully on the currency, no man can deny. It is quite clear that it has led to an enormous depreciation of property; and the very fact, that, notwithstanding the unprecedented pressure, the general credit has been maintained, is above all others the strongest proof that the pressure was utterly uncalled for. The point for immediate consideration simply resolves itself into this: are we to leave untouched upon the statute-book, a law which can at any time expose us to the inevitable hardship of a monetary crisis like the present?—Are we to continue and approve of an Act, the operation of which is, in certain circumstances, to drain dry the fountain of our currency, and that at the very time when an expansion of the currency is required? We do not want to hear from Sir Robert Peel, any more than from an itinerant lecturer, his definition of the nature of a “pound.”What we want is a fair current representative for our property, without an adequate supply of which, that property becomes stationary and is depreciated. The depreciation of the last few months has, upon the most moderate calculation, swallowed up at least two years of the surplus capital of the country, and yet we are told that such a state of things is not only necessary but wholesome! We are quite aware that it is in vain to look for any remedy at the hands of the Whigs. They are at present in a state of most hopeless bewilderment on the subject; trusting in the first instance to Sir Robert Peel, and in the next to the chapter of accidents. A good harvest they think will be sufficient to remove all immediate difficulty; prices will again revive, and the monetary distress be forgotten. We pray most earnestly that the first part of their anticipations may prove correct, but we shall not on that account relax in our exertions to overturn a system which may at any moment expose us to the recurrence of a similar calamity.

With very few exceptions the whole of the public press is with us, and we can hardly believe that the intelligence of the nation is not adequate to work out its own relief. In fact, out of the House of Commons there is hardly a single man who does not reprobate the continual tampering with the currency, which, next to his marvellous power of tergiversation, is the leading characteristic of Peel: nor would his measure of 1844 have been carried but for his confident puffing of the merits of his own machinery, and the almost universal belief in his talents as a financial minister. The bankers, and all those—who were familiar with monetary matters, and who, from long experience, were gifted with foresight and sagacity, not only entertained but expressed the most serious doubts as to the permanent working of the act. But all warning was rejected with scorn by our political dictator, who was resolved to have his own way; and at the present moment we are reaping the delectable harvest of our confidence.

We have already spoken, quite fully enough, of the manner in which the unanimous remonstrance of the Scottish bankers was received. The fact that their representation was backed by the unanimous voice of the public, beseeching that they might be left alone without any legislative interference, went for nothing in the eyes of Sir Robert. He had, to say the truth, too much power, and he never was chary in abusing it. He dealt with Scotland as if she were an insignificant colony, too ignorant to regulate her own monetary affairs, and too weak to resist any show of forcible aggression. In the plenitude of his rashness, however, he displayed the same disregard to public opinion in regulating the currency of England; and we shall now proceed to detail a very few of the several warnings which he has received.

In 1844 the following document was laid before him; and we surely do not exaggerate its importance when we say, that it proceeded from a body of men whose opinions, upon monetary subjects, were entitled to be listened to with the utmost respect and deference:—“We, the undersigned bankers of London, are induced, by the importance of the measure and our interest in its success, to address you upon the subject of the Bank Charter Bill, now before parliament. We were led to believe, when the measure was first brought forward, and we feel confident it was generally understood throughout the country, that although it was the intention of her Majesty’s government that the paper Circulation of the Bank of England, in their issue department, should be limited to an amount not exceeding £14,000,000, upon securities, yet, that in the event of any particular crisis arising, a power was to be reserved by the bill enabling the Bank of England, with the consent of the first Lord of the Treasury, the Chancellor of the Exchequer, and the Master of the Mint, to extend their issue upon securities beyond that amount. It is with considerable surprise that we find that the bill now before the House of Commons does not contain any provision for an extension of the issue beyond £14,000,000, upon securities, excepting under the special circumstances named in the fifth clause of the bill now before parliament. Weare apprehensive that the absolute limitation of the issue to £14,000,000, without any power of expansion reserved, whether that amount be in itself a proper amount or not, will create a general feeling of uneasiness throughout the country, and, by preventing the satisfactory reception of the measure, will deprive the scheme of many of the advantages it possesses, and interfere with its success. We respectfully submit that the effect of such an absolute limitationwill be to restrict the business of the country by leading to a general withdrawal of legitimate accommodation, unless some power be reserved by the bill for extending the issue with the sanction of the authorities above alluded to in cases of emergency, to be made apparent to such authorities.”

This memorial, to which were adhibited the signatures of every eminent banking firm in London, was treated by Sir Robert Peel with the most calm and imperturbable indifference. The warning and the danger so distinctly described and foretold had no effect in altering the resolution of the intrepid baronet. He had made up his mind to place the country permanently in commercial fetters, and no representation of the consequences would cause him to swerve from his purpose. It would have been well if at that time he had reflected with a little respect upon the opinions entertained and expressed by his own venerated father—a man of that sound sagacity and peculiar clearness of conception which are incomparably more valuable than talents of an adroit and plausible description. We wish that those few of his old supporters and adherents who are in the daily habit of diluting the monetary notions of their idol, would refer to the views which were enunciated by the elder Peel in his remarkable letter of 1826, addressed to the members of both houses of parliament. It is surely not unfair to recall the words of the father as powerful evidence against the destructive theories of the son.

Sir Robert Peel, senior, writes thus:—"In the enlarged scale of business carried on by this country, embracing a great variety of pursuits, a reliance on a metallic circulation alone ever did, and ever will fail us. Gold, though in itself massy, often disappears in consequence of war or speculation—nay, the breath of rumour itself is sufficient to disperse it. Our domestic concerns are interrupted, and confidence lost, for want of an ample and approved medium of traffic.

"I am no friend to an unrestrained issue of paper money, and saw with concern, in the absence of a due quantity of specie, bills admitted into circulation issued by persons of respectability, possessing property, but evidently unable to meet a sudden and large demand upon them. More than two years ago, I mentioned to a friend, high in his Majesty’s councils, my fears of the mischief likely to ensue if the practice were not discontinued; accompanied with a suggestion to confine future issues of paper money or tokens to the Bank of England and other competent bodies of men,who would give security in land, the public funds, canals, buildings, or other tangible property, amounting at least to one-half of the value of their bills or tokens in circulation. My proposition was not favoured with any notice; yet, had it been adopted, I am of opinion that most of the panic and distress now so severely felt in the nation would have been avoided. If such an improvement in the banking system could be made available, gold would become less requisite, and the country be supplied with a stationary medium of exchange originating with ourselves.

"The present panic and distress in the country have been declared by high authority to proceed from ‘overtrading’ and ‘wild speculation.’ Infant nations and establishments are liable to miscarry from want of experience and solidity.TradingandSPECULATION, being natives of this island, and parents of our wealth and independence, are surely exempt from such an imputation. The same authority has declared, that ‘gold and paper money are incompatible with each other, and cannot exist together.’The population and trade of the empire having been much increased, a proportionate increase in the medium of circulation is called for; and when gold is found insufficient, recourse must be had topaper, which if improved on the principle already suggested, the two substances would be found in the same pocket without disunion.

“Anxious to see our situation ameliorated, I trust the currency may be mended without changing or impairing the national commercial character—which measure, if resorted to, would resemble the policy of diverting from its course a powerful river that had long given fertility and happiness to a large district, merely because, from excessive rains, it had sometimes exceeded its natural limits, and produced partial injury.”

A sounder and a clearer view of the sole legitimate control which government is entitled, for security of the public, to exercise over the issues of the bankers, cannot be found than this. The elder baronet was fully alive to the gross absurdity of the bullionists who literally make toys of their coin. He recognised to its fullest extent the salutary principle thatREAL PROPERTYis, after all, the only proper basis of circulation: and he would have laughed to scorn the idea of an arbitrary restricted issue, as the certain means of inflicting a paralytic stroke upon the energies and the enterprise of the nation. The total neglect of this view is the capital error of the son. He depreciates the value of real property, by depriving its possessor of the power to command at any time its cheap and commodious representative; and he forces us, under the most adverse circumstances to hunt for gold, and not improbably to humiliate ourselves in time of need, by an application to the hoarding Russian.

We entreat the public attention to the fact, that the banking system and mode of circulation suggested by the elder Sir Robert Peel, is in fact precisely that which was followed out by the Scottish banks, without failure, without complaint, and with incalculable advantage to the country, before the late premier commenced his wanton interference with our institutions. Heaven only knows what amount of suffering we must undergo until the public mind is thoroughly roused to the evils which have resulted from a weak and imbecile confidence in the nostrums of a theoretical minister, and until the money trade is freed from its present most odious restrictions. But we cannot, and we think we ought not, to conceal our conviction that the present monetary crisis is directly owing to the Restriction Act, and that the whole empire, and Scotland in particular, has reason to curse the hour when Sir Robert Peel thought fit to embark on his financial crusade.

We are glad to see such men as Mr Baring and Mr Newdegate protesting in the lower House, against the iniquity of the present system, and exposing its operations in detail. It is in vain that the Chancellor of the Exchequer—whose deference to the opinions of Sir Robert Peel is so ludicrously displayed—attempts to raise his voice in defence of restriction, and to attribute to other causes the deficiency which he cannot deny. Even Peel himself, as we have already remarked, is fain to blink the question, and to escape from the attacks of his antagonists, by the stale artifice of confounding and contrasting their opinions. The memorable debate in the House of Commons on the 10th of May, has, if we are not widely mistaken, established a principle which must lead to important party results; and we would earnestly beseech those who have the welfare of their country at heart, to make this matter of the currency a leading consideration in the use of their electoral franchise.

We have already shown the manner in which Sir Robert Peel was pleased to treat the respectful remonstrance of the English bankers, and the total variance of his financial views from those which were entertained by his excellent and honoured parent. We now take leave to draw the attention of our readers to a rather remarkable passage in Mr Alison’s late pamphlet, entitled “England in 1815 and 1845.”

We need hardly state our reasons for declining to criticise that work. We agree entirely with the views entertained by that eminent writer; and we should be happy indeed, could we state our own arguments with a force and a precision at all commensurate with his. Sir Robert Peel, however, in the course of the year 1845, thought proper to make this pamphlet the subject of his remarks, and concluded,more suo, with a sneer at Mr Alison,which, apart from its propriety, does not strike us as particularly clever. The point at issue was rather a trivial one; for Sir Robert, as usual, did not apply himself to the main body of the argument: he neither impeached the facts nor the conclusions of Mr Alison, but fastened upon an incidental point of no great value or importance. The attack, however, had this good effect, that it elicited a reply from Mr Alison, in which he points out so distinctly the results of the restrictive measure, that we cannot do better than transfer an extract from his Postscript to our pages. It is proper to observe, that this Postscript was publishedtwo years ago, and we leave the public to judge of the accuracy of M. Alison’s observations:—

“Whoever,” says he, referring to the Banking Act of the preceding year—"whoever considers these provisions with attention, will see that they practically introduce two things: 1st, A limitation of the issue of Bank of England notes to £14,000,000 on securities, with the addition of the specie and bullion transferred to the issue department:—2d, A limitation of any further issue to the amount of such securities, bullion and specie. It is the avowed object of the Act to base the circulation of the bank on these three things. And the opinion of its supporters has been repeatedly expressed that they constitute the only safe foundation of banking operations. If, therefore, the specie is drawn out by the holders of notes who are declared entitled by the Act to have their notes paid at £3, 17s. 10½d. an ounce of gold, it follows, of course, that the notes in circulation must be diminished in the same proportion. They cannot issue notes beyond the £14,000,000,except in exchange for specie or bullion—the most effectual of all ways for limiting the issue to their amount.

"Now, suppose a bad harvest, such as we have narrowly escaped, occurs, when undertakings of a gigantic nature are on foot, and a large quantity of specie is drawn from the bank to purchase foreign grain or other subsistence, what, under the existing law, must be the consequence?Must it not be that the paper circulation of the Bank of England and of course of every other bank, will be simultaneously and rapidly contracted? Their own notes pour in to be exchanged for specie to buy foreign grain, or make the necessary remittances to foreign undertakings. They cannot issue new ones beyond the £14,000,000, except in exchange for specie or bullion, which is the very thing they are every day losing, and which is bought up in all parts of the country for foreign exportation. The result is inevitable, that their notes must be called in as rapidly as the sovereigns go out. The screw must be put on; the circulation must, at all hazards, be contracted. If £10,000,000 of sovereigns aredrawn outto buy foreign grain, or to meet a demand for gold in foreign states, £10,000,000 worth of notes must bedrawn into equalise the paper with the stock of gold and silver above the £14,000,000 authorised to be issued on paper securities.The circulation will thus be diminished by £20,000,000, or nearly a third of its amount, and that at the very time when the public interests most loudly call for its extension.

“That may occur, too, at a time when speculations the most weighty are on foot, and the currency previously in circulation is most required for the wants of the community! The evil will not thereby be doubled: it will be quadrupled. Like all mischievous panics, its effects will go on as the squares. Is it possible to contemplate such a state of things without the most serious apprehensions: without deep regret that it should be established and perpetuated by acts of parliament? Does it not annul the best effects of a paper currency, that of having an elastic quality which causes it to expand when the metallic currency is contracted, and so obviate the ruinous and lasting effects of such temporary diminution on general credit? Is it surprising, when such is the law, that the mercantile classes watch the sky; that rain for a month in autumn gives a serious shock to credit, and that stock of all kinds rises or falls with the changes of the barometer? The Banker’s Act of 1844 should be styled—‘An Act for the more effectual transferring of panics from agriculture to commerce,and for perpetuating commercial catastrophes in Great Britain.’”

When we compare the events predicted in this remarkable passage with those which have actually taken place—when we reflect that a bad harvesthasoccurred, that our goldhasbeen drained, our paper circulation contracted, and the screw put on—we think there are few commercial men in the country who will not agree with us in wishing that Sir Robert Peel had really accepted Mr Alison “as the philosopher who is to instruct us on the currency.” For, most assuredly, there is no kind of philosophy which we can discover in the scheme that is now being tested at the expense of the merchants and manufacturers of the three kingdoms; unless it should be held philosophic that the whole commercial machinery of the country shall be exposed to annual dislocation, and that credit shall hereafter be liable to the present alarming point of contraction. Parliament, as we understand, is about to separate, without doing any thing whatever to remedy this monster grievance. Let the Whigs look to it. They are now to all intents and purposes the aiders and abettors of Sir Robert Peel. They hang upon his words, adopt his principles, and applaud his maxims to the skies. They hear from every quarter of the country the cry of unparalleled distress. An evil much greater than the scarcity is pressing upon the industrious classes, interfering with labour, checking trade, and depreciating the value of every kind of property. Manchester has been nearly at a stand-still, not from want of orders but from absolute want of accommodation; and yet the present ministry have neither the courage nor the capacity to step forward and afford that relief which is in their power, and which the nation is demanding at their hands. If, during the recess, and before a new parliament shall meet, the present lamentable state of matters is to continue, we say deliberately that no British ministry ever exposed themselves to such a frightful load of responsibility. Let them share it with their new ally and master. It may be that he intends, at some future time, to make a second push for popularity by throwing them overboard, and repealing his own most mischievous statute. But we trust that the electors throughout the country will take care that the new representative body shall not be constructed of the same malleable materials as its predecessor, and that no more experiments, involving the national prosperity and fortunes, shall be permitted, for the mere sake of gratifying the caprice and augmenting the vanity of an individual who has already brought the whole of us so close upon the verge of ruin.

Printed by William Blackwood & Sons, Edinburgh.

FOOTNOTES:1History of the Conquest of Peru; with a Preliminary View of the Civilisation of the Incas.ByWilliam H. Prescott. London: 1847.2El Kebir, or the Great, is a term by which Mohammed Ali is usually designated among the fellahs of Egypt, to distinguish him from the mob of Pashas and the crowds of Mohammed Alis. Napoleon was called also El Kebir, as the greatest among the Ferenk dogs of the West.3The Life of Jean Paul Frederick Richter.London: Chapman, 1845.4Allemagne.English translation. London: 1813. Vol. ii. p. 339.5A work on the Immortality of the Soul—a favourite theme with Richter.6“Unitarian,” in the Political Dictionary of South America, is opposed to “Federal.” Rosas pretends to govern on “Federal” principles—that is, the separate legislative independence of each province of the “Confederation;” but, in fact, he has made himself a Unitarian, since heunitesin himself (by “extraordinary powers,” given to him only for a season, but retained ever since) a supremacy over the other provinces, and over the law and constitution.7Maza, the president of the Sala of Representatives, and a high officer in one of the courts of justice, was murdered in (or close to) the senate house; his son was murdered the same evening; and no judicial inquiries ever took place in consequence. Why?—Because, of course, it was done by authority.8Dollars in Buenos Ayres mean small notes manufactured in London!! they used to be made payable at a national bank, in metallic dollars, and then they represented a silver dollar. This bank has been abolished, thanks to the “Great Restorer of Laws,” and these paper dollars now vary from 1½d. to 4d. The arrival or departure of a vessel of war, with important despatches, will, in one day, cause a doubloon (about £3, 8s.) to be worth, say three hundred dollars, and next day worth four hundred, much to the embarrassment of trade—metallic dollars not being current money.9“Let the Federals live—let the savage, dirty, ruthless Unitarians die!”—or, Up with the Federals—down with the——Unitarians!10Ladies in South America are more passive to parental authority, than in England, in respect to the momentous question of selecting a husband.11A History of the Royal Navy from the Earliest Times to the French Revolution.By SirNicholas Harris Nicolas, G.C.M.G.12Maritime and Inland Discovery, Vol. i. p. 230.13If Sir H. Nicolas has no other authority for this fact of its being extinguished by vinegar than the extract which he afterwards gives from Vinesauf,—it does not stand on a very secure basis. “This fire, with a deadly stench and livid flames,consumes flint and iron! and unquenchable by water, can only be extinguished by sand orvinegar.” The story about the vinegar comes, we see, in very suspicious company.14Hallam’s Middle Ages, vol. iii. p. 397.

1History of the Conquest of Peru; with a Preliminary View of the Civilisation of the Incas.ByWilliam H. Prescott. London: 1847.

2El Kebir, or the Great, is a term by which Mohammed Ali is usually designated among the fellahs of Egypt, to distinguish him from the mob of Pashas and the crowds of Mohammed Alis. Napoleon was called also El Kebir, as the greatest among the Ferenk dogs of the West.

3The Life of Jean Paul Frederick Richter.London: Chapman, 1845.

4Allemagne.English translation. London: 1813. Vol. ii. p. 339.

5A work on the Immortality of the Soul—a favourite theme with Richter.

6“Unitarian,” in the Political Dictionary of South America, is opposed to “Federal.” Rosas pretends to govern on “Federal” principles—that is, the separate legislative independence of each province of the “Confederation;” but, in fact, he has made himself a Unitarian, since heunitesin himself (by “extraordinary powers,” given to him only for a season, but retained ever since) a supremacy over the other provinces, and over the law and constitution.

7Maza, the president of the Sala of Representatives, and a high officer in one of the courts of justice, was murdered in (or close to) the senate house; his son was murdered the same evening; and no judicial inquiries ever took place in consequence. Why?—Because, of course, it was done by authority.

8Dollars in Buenos Ayres mean small notes manufactured in London!! they used to be made payable at a national bank, in metallic dollars, and then they represented a silver dollar. This bank has been abolished, thanks to the “Great Restorer of Laws,” and these paper dollars now vary from 1½d. to 4d. The arrival or departure of a vessel of war, with important despatches, will, in one day, cause a doubloon (about £3, 8s.) to be worth, say three hundred dollars, and next day worth four hundred, much to the embarrassment of trade—metallic dollars not being current money.

9“Let the Federals live—let the savage, dirty, ruthless Unitarians die!”—or, Up with the Federals—down with the——Unitarians!

10Ladies in South America are more passive to parental authority, than in England, in respect to the momentous question of selecting a husband.

11A History of the Royal Navy from the Earliest Times to the French Revolution.By SirNicholas Harris Nicolas, G.C.M.G.

12Maritime and Inland Discovery, Vol. i. p. 230.

13If Sir H. Nicolas has no other authority for this fact of its being extinguished by vinegar than the extract which he afterwards gives from Vinesauf,—it does not stand on a very secure basis. “This fire, with a deadly stench and livid flames,consumes flint and iron! and unquenchable by water, can only be extinguished by sand orvinegar.” The story about the vinegar comes, we see, in very suspicious company.

14Hallam’s Middle Ages, vol. iii. p. 397.

Transcriber’s Note:Obvious printer errors corrected silently.Inconsistent spelling and hyphenation are as in the original.

Obvious printer errors corrected silently.

Inconsistent spelling and hyphenation are as in the original.

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