UNIVERSITY OF 
 ILLINOIS LIBRAFsY ,
 
 THE 
 
 « 
 
 OUTLINE OF A PLAN 
 
 FOR BRINGING THE 
 
 SCOTCH AND ENGLISH CURRENCY 
 
 SAME STANDARD BULLION VALUE, 
 
 AND PRODUCING 
 
 A STERLING COUNTRY BANK NOTE 
 
 OF EXCHANGEABLE VALUE, 
 CONVERTIBLE IN EVERY PLACE TO 
 
 GOLD COIN. 
 
 VERY HUMBLY ADDRESSED TO THOSE IN AUTHORITY; TO THE SCOTCH 
 AND ENGLISH COUNTRY BANKERS ; AND TO THE PUBLIC ; 
 
 By RICHARD MOORE, Esq. 
 
 " aot){ng ^nttquitg." 
 
 LONDON: 
 
 PRINTED BY WILLIAM CLOWES, 14, CHARING-CROSS, 
 
 AND 
 
 SOLD BY J. MURRAY, ALBEMARLE-STREET. 
 
 MDCCCXXVL
 
 ADVERTISEMENT. 
 
 Not to alarm the general reader, only round num« 
 bers are treated of in the following pages ; those who 
 have a taste for fractions, may indulge it, by referring 
 to the Authorities quoted.
 
 THE 
 
 OUTLINE OF A PLAN, 
 
 CHAPTER THE FIRST. 
 
 The difficulties the country has been thrown into, 
 and in particular that part of the distress which 
 has been occasioned by the present state of the 
 country bank paper currency, has excited the 
 writer's attention, and induced his inquiries into 
 the cause of it ; and from such authorities as were 
 within his reach, the result has produced an opi- 
 nion, which, whether well or ill founded, he in- 
 vites his readers to consider. 
 
 That the inconveniencies we experience with 
 our country bank paper circulation, have been oc- 
 casioned principally by our different administra- 
 tions — indeed by the country at large — having 
 wholly lost sight of the control necessary over 
 the vahe of our country bank paper currency, as 
 over the bullion currency issued from the Mint, 
 
 B
 
 ,«g CURRENCY. 
 
 and this from the earliest periods of country bank 
 paper currency and bullion currency, being mixed 
 up together. 
 
 The remedy that has suggested itself to the 
 writer is to return to first principles, as far as it 
 is now practicable to do so, and to the same con- 
 trol being established over the value* of all the 
 different parts of the currency of the realm, as 
 the government always exercised when it con- 
 sisted alone of bullion coin, and as early as the long 
 lapse of time in which the contrary practice has 
 prevailed, ma}?- now make possible. 
 
 But without interrupting the Scotch bankers 
 in their business, whose affairs appear to be so 
 wholesomely regulated, or those English bankers 
 who survive the storm, who are so inconvenienced 
 by the insolvency of their neighbours, and by the 
 convulsed state of the money market, and to whom 
 we are chiefly indebted at this moment for the 
 currency, except in the districts of London and 
 Lancashire, which now remains in circulation. 
 
 And, without thinking of violent, coercive mea- 
 sures, to begin by exercising such a control over 
 the value of that portion of the country bank paper 
 currency, as may be practicable, optional, and 
 beneficial, to the bankers themselves, as well as 
 to the public, that the government should take 
 under their cognizance. 
 
 * The reader is requested to keep the words value and quan- 
 tity^ and the ideas they convey, totally distinct as he proceeds.
 
 CURRENCV, d 
 
 But before going further, the writer should, 
 perhaps, give some account of the source he de- 
 rives his ideas from, to induce a hope that any- 
 thing useful, can have suggested itself to so humble 
 an individual. 
 
 He does not mean to oppose his doctrines to 
 others, though he may have to deal with some 
 facts, but only to state such ideas as have un- 
 expectedly occurred to him as useful, and which 
 he is concerned to reflect must be new, or at least 
 have been lost sight of, ever since the first esta- 
 blishment of the Bank of England in 1694, if not 
 earlier, and are, therefore, left for others, than 
 himself, to work upon if they please. The writer 
 has simply clothed them in such garb, as occurred 
 necessary to elucidate his subject, and which, if 
 they should turn out applicable to public utility, 
 as he hopes they may, he should have taken 
 blame to himself had he remained silent. 
 
 When the subject engaged his attention, then the 
 source and spring he determined to attend to w&s 
 Dr. Adam Smith*. Different authorities, indeed, 
 presented themselves to him, and among others 
 some Tables t, that gave the country bank paper 
 currency for 1818-19 at twenty-seven millions, and 
 in 1822 at only eleven millions, and the pamphlet 
 spoke of the distress among the manufacturers, 
 the little employment for the working part of 
 
 * On the Wealth of Nations. 
 
 t Mr Joplin's Tables, a Pamphk^t on Currency. 
 
 B 2
 
 4 CURRENCY. 
 
 them, the great distress among the shopkeepers, 
 and labouring class of the society, the reduction 
 of the currency, the fall in the price of wheat, 
 in the rental of land, and in the price of other 
 commodities, and the riots and confusion in 
 our manufacturing districts. He soon found these 
 distresses had become matter of controversy, 
 whether they had, or had not all been occasioned 
 by the bill of the Right Honourable Mr. Peel, for 
 the restoration of the bullion currency. 
 
 The writer felt that he was in troubled waters, 
 and determined to have no more to do with this 
 part of the bearing of the bill at present, and to 
 touch slightly only the different articles necessary 
 to elucidate the utility of his ideas, though he 
 must confess he entertains the old English pre- 
 judice for gold coin. It bears upon it the im- 
 pression of his sovereign-, and has more the ap- 
 pearance of being the poor man's friend than a 
 dirty piece of paper, issued, perhaps, by a man of 
 straw ; and though earned by the sweat of the 
 labourer's brow, he is, possibly, destined to lose 
 by the insolvency of the banker*. But, not to 
 dwell more upon this part of the subject now, he 
 proceeds to the article currency. 
 
 • The writer, however, means to convey nothing disrespectful 
 of the body of them ; he esteems both their utility and respect- 
 ability, but some improper persons will get into all situations. 
 
 ftT^l'^iji^
 
 Currency. 
 
 0]v consulting his author* and others, the first 
 peculiarity the writer has to notice of the cur- 
 rency is, that in what is called the London and 
 the Lancashire districts, none but Bank of Eng- 
 land notes or bullion coin are current; that 
 throughout the rest of the country none but 
 country bank notes, and small quantities of bul- 
 lion coin, are, generally speaking, in circulation. 
 
 The Bank of England note has its correspond- 
 ing capital value printed on the paper, and of 
 public notoriety at the bank, either in govern- 
 ment funds, approved private securities, or bul- 
 lion coin. It is of equal value, therefore, as bullion 
 coin itself, and it will at all times exchange for 
 and buy bullion in the lump, when there is any 
 in the market. 
 
 The country bank note has no corresponding 
 guarantee of value to its amount of public noto- 
 riety whatever, nor will it exchange for or buy 
 bullion in the lump, though there should be any 
 in the market ; the firm it issues from pays a stamp 
 duty for this privilege, and the only security the 
 holder of it has is from the solvency or insolvency 
 of the bank that circulates it, and of confined 
 local knowledge. 
 
 The bullion coin that issues from the Mint is 
 
 * Dr. Adam Smith.
 
 b CURRENCY. 
 
 of the purest description, and of higher value 
 than the bullion coin of, perhaps, any other 
 country. Government have never lost sight of 
 the necessary control over the value of it ; but 
 the bullion that goes there, for the most part, be- 
 longs to individual subjects ; the only part that 
 government performs is the operation of coining, 
 and the identifying the purity of the metals 
 brought for coinage. 
 
 They exercise no means for circulating in 
 quantity beyond the payments to their own ser- 
 vants, the civil establishments of the country, 
 their trades-people and artisans, the army and 
 navy, and the public annuities; but though these 
 articles make up the sum of the expenditure and 
 revenue — excepting bullion coin sent to the dock- 
 yards, outposts, and garrisons, for the soldiers 
 and sailors at those places — the bulk of this mass 
 of revenue, so far as the legitimate currency, the 
 Bank of England note, and the bullion coin is 
 concerned, remains in the London district. 
 
 It is received by the bankers and agents of 
 the parties concerned, or by themselves, in the 
 metropolis, and the rest of the currency put in 
 motion in this district, takes place upon the ex- 
 penditure of its population, and by the discounts 
 and advances of the bank, bankers, merchants, 
 manufacturers, trades-people, and others, that 
 inhabit it. The amount of Bank of England notes 
 in 1818-19 was twenty-seven millions; in 1822
 
 CURRENCY. 7 
 
 only ftJiWiTon f^ millions, but the difference was 
 made up in the amount and addition of the bul- 
 lion coinage. 
 
 The circulating currency over the rest of the 
 Island, is wholly dependent on the country banks 
 and bankers, and consists of their notes alone, 
 with some small quantity of bullion coin, and 
 this mass of paper is put in circulation through 
 them. 
 
 *' The circulation of every country," says Dr. 
 Adam Smith, *' may be divided into two kinds, 
 that between dealers and dealers, and that be- 
 tween dealers and consumers : for the first is 
 wanted only the larger species of currency, no- 
 thing, perhaps, under the ten pound note ; for the 
 latter is required bullion coin, or one pound notes, 
 with only silver." The same authority seems to 
 have contemplated also the possibility of what has 
 happened in our own times, and that the business 
 even of a great country might be carried on with 
 a paper currency alone, and yet not be depreciated 
 by this circumstance. 
 
 But with a strong leaning in favour of bullion 
 coin ; and again, supposing in this place, what 
 happens, indeed, at present, that the credit of the 
 country bank note is supported by the bullion 
 coin in, and always streaming from, the country 
 banks to the metropolis ; losing sight, as it were, 
 of the idea he had just before set forth, but which 
 
 * Mr. Joplin's Tables.
 
 8 CURRENCY. 
 
 SO happily took place with us, the possitJiiTty of a 
 paper currency being supported, without depreci- 
 ation, and simply upon the credit and good go- 
 vernment of a country ; but the reason he ad- 
 duces in preference of bullion coin is this, — " An 
 unsuccessful war, for example, in which the enemy 
 got possession of the capital, and, consequently, 
 of the treasure that supported the credit of the 
 paper money," — that must be the best policy, 
 therefore, that, though the capital was lost, though 
 the geese did cackle* would still produce for our 
 retreating countrymen, a golden nest egg in every 
 country town they came to. 
 
 But not to fatigue the reader, or himself, the 
 writer thought he would relax, and look into ano- 
 ther article, and in the face of all his exertions 
 to the contrary, he finds the different heads of his 
 discourse will run one into the other ; but he de- 
 termined to essay the word bank ; he opened his 
 book, and the first thing he read was, that there 
 was one at Amsterdam, with an Agio belonging to 
 it — he was quite alarmed — it appeared to him 
 worse than the intricacies of Whist — he felt 
 punished and abashed, and had well nigh given 
 up his subject, but he was idle, and had nothing 
 to do, and so cried courage ! and resumed his 
 task. 
 
 Currency appears to be alike necessary to 
 brace the sinews of war, and for the enjoyment of 
 
 * Roman History.
 
 CURRENCY. 9 
 
 peace; 'but the quantity necessary at any one 
 time is not to be defined, unless, indeed, the 
 reader could say to the sea — Rest there !-to the 
 prosperity of his country — Be still ! — you shall 
 neither advance nor retreat : then, and then only, 
 could any wise head apportion the much or the 
 little currency that would be required. 
 
 It is always more or less in motion ; and though 
 any sudden large increase may indicate some over- 
 trading and over speculation*, it indicates as well 
 prosperity, for no speculation can take place with- 
 out the existence of riches somewhere ; there 
 must be money, at least, to try for the prize, 
 though the object, greater riches, may not be won; 
 it is necessary, we learn, alike to support the ex- 
 isting capital of a country, as to employ increased 
 labour, and to create new capital, and new pro- 
 sperity. — A question here presents itself, and of 
 import : — Was there more currency in the market 
 by sixteen millions f before 1822, than was neces- 
 sary to support the existing prosperity ? It is a 
 fearful mass to have been withdrawn from circu- 
 lation in so short a time as three or four years ; 
 every new loan for a twenty millions requires cur- 
 rency to break the bank note up, currency to pay 
 the dividends on the annuities that have pur- 
 chased it, and currency to support all the new 
 
 * But how is a decrease in the quantity of currency to indi- 
 cate over trading and over speculation ? 
 t See Mr. Joplin's Tables.
 
 10 CURRENCY. 
 
 capital created by the labour the note has put in 
 motion. 
 
 We are told, indeed, that every capital bor- 
 rowed would equally have been employed, though 
 government had not made use of it, and in pro- 
 ductive labour too ; But would the return for em- 
 ploying all the different loans of twenty millions 
 that took place during the late war, have arrived 
 so frequently in private hands ? If not, we ha-ve 
 had the like benefit as a trade, with half a dozen 
 returns of its capital, instead of the ordinary rota- 
 tion of only one. 
 
 And so the increased population, and all the 
 fair houses for their accommodation throughout 
 the land, its increased cultivation, its manufac- 
 tures, its trade, and its resources, all seem to in- 
 dicate. Hence the increase of the currency, the 
 vacuums that have produced the want of it, and 
 the realization of new capital and new prosperity 
 that required its support. 
 
 There are no limits to the demands that may 
 arise for an increase of currency, nor to the mi- 
 series that may ensue for want of a due proportion 
 of it ; all that a good government can do is to con- 
 trol the value over as large a portion of its quan- 
 tity as is practicable, and to make it the interest 
 of those whose business it is to issue it, as much 
 as is possible, to attend to the intrinsic worth of 
 the remainder. That remainder must be left to the 
 judgment of the banker, the more or the less ; if
 
 CURRENCY. 11 
 
 he issues too much, it is sure to return upon the 
 firm that issues it, and with loss, nothing can keep 
 it in the market* : on the other hand, if there is 
 not currency enough, the public lose the employ- 
 ment of so much labour the deficiency might have 
 put in motion, and so much additional security for 
 the payment of the public revenue f ; for upon 
 labour, and the quantity of it also, depends the 
 public revenue, as the landlord's rent, currency 
 puts the labour in motion, and the labour pro- 
 duces the income, public and private. 
 
 Nothing can be more clear, therefore, than that 
 the government of every country ought to have a 
 great deal to do with the value of the currency, 
 but nothing to do with the quantity of it. No go- 
 vernment, therefore, will ever make a law to limit 
 the quantity of currency, it would be like com- 
 mitting suicide, and if any should accidentally creep 
 in upon the Statute-book, it would be repealed so 
 soon as the eff*ects of it were discovered. 
 
 Currency is the life-blood of the body politic, 
 which cannot exist without it ; to be perfect, it 
 should contain very peculiar^properties. Its quan- 
 tity should be unlimited, and of intrinsic worth, 
 even in a stagnant state ; it ought still to pro- 
 duce some profit to the holder, because he keeps 
 
 * Doctor Adam Smith. 
 
 t There is at this moment a great deficiency of country bank 
 currency ; and the revenue on the fifth of July had fallen off near 
 five hundred thousand pounds, for that quarter of the year 
 only.
 
 life CURRENCY. 
 
 it for the employment of the public and the state, 
 as well as for himself; — it should be ever ready 
 in the cause of justice to assist the police officer, 
 for instance, but without producing intemperance 
 or partiality in the judge, and like the water at 
 the dam-head of a mill, never show itself before 
 it is called for ; — it should almost realize the poet's 
 description of the Thames : — 
 
 Deep, though yet clear, though gentle, yet not dull, 
 Rough without rage, without o'erflowing full. 
 
 Smithfield. 
 
 What has preceded, shews some of the effects 
 of currency. Very many people in this country, 
 the writer is persuaded, will, nevertheless, think 
 of country bankers, that they are by no means 
 among those who want to be placed in the front 
 of any act of parliament, for protection ; not sa, 
 however, the Scotch, for if ever an expression of 
 feeling and approval was conveyed in favour of a 
 particular class of society, the Scotch petitions, 
 the represented sentiments of three millions of 
 people, exhibited their approbation of their own 
 country banks and bankers. 
 
 If the reader should, however, be among those, 
 the writer will not say adverse, but only luke- 
 warm, thinking of them, perhaps, as not necessary 
 to society. He is acquainted that sixteen millions 
 of their paper currency in England had been with-
 
 SMiTHFItlLD. 13 
 
 drawn from circulation by 1822, out of twenty- 
 seven millions their amount in 1818-19, and with- 
 out attributing this disappearance of so much 
 currency as the cause or not, wheat that had 
 been eighty-three shillings the quarter at the 
 latter period, fell to forty-three * shillings the 
 quarter at the former period ; landlords imme- 
 diately experienced great difficulties with their 
 rents, manufacturers have ceased to be employed 
 as usual, and riots, in various places, as is always 
 the case where large bodies of people are out of 
 employ, took place; and finally, the public in- 
 come also has now declined, and at the rate of 
 near two millions a yearf. Let the reader only 
 take the trouble to imagine further, that the re- 
 maining eleven millions of country paper currency 
 had been withdrawn also, as an example of the 
 country bankers' utility, or otherwise. 
 
 And so far, then, as country bank paper was 
 concerned, there would have been no currency to 
 have represented the price of wheat, or any other 
 commodity in that part of England, not included 
 in the London and the Lancashire districts. 
 
 Landlords might, however, have received their 
 rents in kind, and the public revenue might be 
 collected in the same way, and more traffic given 
 to the iron railways and canals by the conveyance 
 
 * Vide Mr. Joplin's tables. 
 
 t The July quarter for 1826 was less by near 500,000/. than 
 the corresponding quarter for 1825.
 
 14 SMITHPIELD. 
 
 to the public offices in the metropolis of the 
 corn, and new labour found for the drovers in 
 taking the sheep and cattle to our public offices 
 in payment of our taxes, and in this way, 
 Smithfield, always a great nuisance, might be got 
 rid of! 
 
 It is the custom at the Excise Office, and pro- 
 bably at other public offices, that all the money 
 received in the day, and not paid away again in 
 debentures, or otherwise, should be carried every 
 evening to the bank ; that provision is already 
 made in Broad-street*, that the cattle and the 
 sheep arriving there in the day, and not so disposed 
 of, should be driven every evening to the bank ? 
 
 That the metropolis would equally be supplied 
 with provisions and cattle, by application at the 
 public offices and the bank, as before Smithfield 
 was suppressed. Half the dividends on the public 
 annuities might be paid with a corn and cattle 
 currency, instead of paper and bullion coin. New 
 employment would be given to the officers of His 
 Majesty's Treasury, and corn and currency would 
 still have found their value. 
 
 The Bank of England and the Country 
 Banks. 
 
 Banks seem very early to have suggested them- 
 selves as necessary engines of state, or sources of 
 
 * The scite of the Excise Office.
 
 BANK OF ENGLAND. 15 
 
 private gain, in all great trading countries. The 
 Bank of Amsterdam was established in 1609, and 
 those of Venice and Genoa, in the times of their 
 prosperity. The Bank of England was estabhshed 
 in 1694, and no doubt was thought of by the pro- 
 jectors of it as become necessary, from the grow- 
 ing and the increased trade of the country, and 
 from the demand for more currency than the Mint, 
 and the then existing resources, without more 
 aids, could supply. 
 
 It was made an immediate engine of state by 
 borrowing 1,200,000/. of it, and of private gain to 
 the proprietors, by government giving eight per 
 cent, for the money, or an annuity of one hundred 
 thousand pounds a year for management and 
 interest. 
 
 They commenced their business, therefore, 
 under very advantageous circumstances, with the 
 liberty of issuing what amount of notes they 
 pleased, all of which in the first instance were 
 probably available in the purchase of gold bul- 
 lion ; at all events the public was safe as to the 
 notes representing the 1,200,000/, and they went 
 off with great credit and at score. 
 
 Our author gives two examples of the manage- 
 ment of banks, dividing by four and by five to 
 find the quantity of bullion coin, necessary to 
 keep any certain quantity of bank notes in circu- 
 lation the country would absorb ; — the Bank of 
 England, therefore, could very safely have ac-
 
 16 THE BANK OF ENGLAND 
 
 comodated the public by the issue of a four or 
 five millions of currency in notes ; but so many 
 accidents and interruptions are all new establish- 
 ments liable to, and so inciting the object of 
 gain, that they must probably have been induced 
 to issue notes far beyond this amount ; for only 
 two years after their first establishment these 
 notes fell twenty per cent*. 
 
 Nevertheless in 1697 the Bank of England 
 was allowed to enlarge its capital stock by the 
 ingraftment of another million. This sum was not 
 lent at interest to government, but it was said to 
 have been allowed for the support of public 
 credit ; and as it must have enabled the bank to 
 have extended its issues so many more millions, 
 or if there had been any issue of notes beyond 
 what the capital of 1,200,000/. would support, to 
 have supported such issue. The new capital 
 added, would have acted either way ; but whe- 
 ther or no the government of 1697 must have 
 been of opinion, that there was no method of 
 supporting a declining credit, but by the issue 
 of more Stirling currency ! 
 
 It is a proof of the anxiety of the administration 
 of that time, that there should be no want of 
 currency ! 
 
 The check by the depreciation of their notes, 
 however, was of short continuance, for their 
 
 * There was also the additional cause, perhaps, of a new 
 coinage of silver then going on. — Dr. Adam Smith.
 
 AND THE COUNTRY BANKS. 17 
 
 capital in stock subscribed as early as 1722 was 
 near nine millions, and their capital lent to 
 government, for which they received interest, so 
 large as near nine millions four hundred thousand 
 pounds. *' It was upon this occasion," says our 
 author, " that the sum that the bank had advanced 
 to the public first exceeded its capital stock, or 
 the sum for which it paid a dividend to the pro- 
 prietors of bank-stock ; and from this early date, 
 twenty-eight years only from its establishment, 
 with the aid that government originally set it off 
 with, and has hitherto exclusively given from 
 time to time to the Bank of England, has it con- 
 tinued to flourish to the present date, to the 
 infinite advantage of the public as an engine of ^ 
 state, and to its stock-b rok o r& - as a source of^/^>/Vi 
 private profit, and as had been anticipated from 
 its foundation." 
 
 Nothing can exceed the good government of 
 the directors in the management of their concerns ; 
 and at least half the currency that is necessary 
 for the support of our establishments, our capital, 
 our credit, and the labour of the country, is sup- 
 plied by it : but as riches, always run a race 
 with knowledge in commanding power, and they 
 are alone the sources of it, the policy of placing 
 the remaining half of the currency in the sole 
 possession of the Bank of England seems very 
 dubious, and hazardous of producing such a con- 
 trol over the affairs even of this great country as 
 
 c
 
 18 THE BANK OF ENGLAND 
 
 the company in Leadenhall-street exercise over 
 the monarchies and their courts in Asia. 
 
 It appears sufficient to the writer that they 
 divide the advantage : a few hundred stock- 
 holders only, with the rest of the population — 
 thirteen or fourteen millions — and that the sta- 
 bility of the Bank of England, with the advan- 
 tages they already possess, is equal to that of the 
 British government ; all that it has advanced to 
 the public must be lost before its creditors can 
 sustain any loss*. 
 
 This support from government is the whole 
 mystery of its notes, exclusively, being available 
 in the purchase of bullion, and which this note 
 will do abroad as well as at home, and simply 
 from the opinion the other nations of Europe en- 
 tertain of the good management of our affairs, 
 that a better letter of credit cannot be taken to 
 the continent than a Bank of England note. 
 
 But take away the government support — the 
 credit of the country — and put ten sovereigns 
 in one scale and a ten pound Bank of England 
 note in the other scale, the same as with a country 
 bank note — lift the scales, and the paper will kick 
 the beam directly : but add to the scale with the 
 Bank of England note, the credit of the country, 
 the opinion that the world entertains of our good 
 government; the knowledge that the ten pound 
 note, is the representative of a portion of a public 
 ^ Dr. Adam Smith.
 
 AND THE COUNTRY BANKS. 19; 
 
 fund, as will at all times command or sell for ten 
 pounds, and the Bank of England note and the 
 public credit together ; immediately balance the 
 ten sovereigns, and they are worth more than all 
 the gold bullion in the world ! ! ! 
 
 The battles of Trafalgar and Waterloo, may be 
 said to have been fought in the bank note's fa- 
 vour; not a ship on the waters, nor a soldier on 
 the parade, but is there for its support ; all the 
 triumphs that are past, and all the glories that 
 are to come, are and will be its safe-guards ! 
 
 Country Banks and their Notes. 
 
 The country banks have never had the good 
 fortune to enjoy the fostering care of govern- 
 ment the Bank of England has possessed. They 
 seem never to have been thought of but as objects 
 of taxation by levying a stamp duty upon them, 
 nor have the different governments during a period 
 of one hundred and thirty-two years, dating only 
 from the establishment of the Bank of England in 
 1694, ever exercised any control over the intrinsic 
 value of any portion of the country bank paper 
 currency, as was shewn to have been done by the 
 Bank of England from its establishment ; for such 
 it cannot be denied has been the effect of the con- 
 nexion between the government and it, and thus 
 giving security to the public for all the notes the 
 Bank of England issues. 
 
 C 2
 
 20 COUNTRY BANKS 
 
 How early country banks were established ap- 
 pears uncertain, but there is some mention of 
 paper money even by Shakspeare*, but the bulk 
 of our country banks have been established only 
 within the last fifty years. It would appear as 
 though the country traders and dealers in the 
 earlier times, had been mostly in the practice of 
 sending or bringing their bills which they wanted 
 to be discounted, to London, and returning with 
 the gold currency to the country ; there appears 
 no other way of accounting for the quantities of 
 gold coin always met with in the country in those 
 earlier times. 
 
 The country banks seem to have been multi- 
 plied with the increase of our national debt, and 
 the increase of the capital of the country ; and 
 to have sprung up as the several vacuums of cur- 
 rency took place, by draining the country circu- 
 lation, for the supply necessary for breaking up all 
 the different, Leviathan, notes of loans, and to the 
 amount of all the millions borrowed in the late 
 war. Everything tended to the necessity for an 
 enlargement of the currency, and in every small 
 town there was a bank established for the issue 
 of currency, and of its own coining ; there has 
 never been even a minimum security enacted or 
 required for the public. 
 
 The revenue was collected in this currency, 
 afterwards changed into Bank of England notes, 
 
 * " Not a rag of money." — Comedy of Errors, Act. iv. Sc 4.
 
 AND THEIR NOTES. 21 
 
 at the houses of their agents in London, and the 
 largest part of the population of Britain, depended 
 upon this currency for its support. No in- 
 terruption was thought of to be given to the 
 country bankers during the war ; they were as 
 necessary engines of state as the Bank of England, 
 though, finally, to be so differently dealt with*, 
 and the part of the currency issued by them was 
 as necessary to the well-being of the state, as 
 the part issued from the Bank of England. 
 
 Their gold, and that of the whole country, had 
 long been drained to send abroad for corn in our 
 scarcities, and for our armaments in different 
 parts of the world. The currency was changed by 
 legislative authority t for the time being from 
 gold to paper ; the act said, — you may now pay 
 paper for gold ; — the gold had departed out of 
 the country in the service of the state, and it had 
 become both necessary and just it should do so, 
 and all their succeeding engagements were made 
 according to this paper currency of one and two 
 pound notes : the system had worked well, and 
 conducted us, after a long and arduous but most 
 successful war, to a glorious and secure peace. 
 
 One of the earliest subjects of discussion after 
 the peace, was the propriety of returning to cash 
 payments, and bullion coin instead of one and 
 two pound notes, and meeting the general pre- 
 
 * By the consequences of omission. t 1797.
 
 22 COUNTRY BANKS 
 
 judice, in favour of our old gold coinage*. Arrange- 
 ments were made with the Bank of England that 
 gold should be again coined and issued, and the 
 one and two pound notes suppressed all over 
 England I . 
 
 The bank immediately made their arrangement, 
 purchased the gold that flowed in upon us with 
 their notes, had the bullion coined and issued, 
 anticipating the wishes of the government and 
 the prejudices of the people by years, and our 
 currency in the London, and the Lancashire, dis- 
 tricts has been complete as to value ever since. 
 
 And very naturally, up went the fame of the 
 Bank of England, but the others could do no such 
 thing with their notes, and down went the cha- 
 racter of the country bankers. There was nothing 
 to be done by those who did not chuse to court 
 bankruptcy, but to refuse the bills offered for dis- 
 count, reduce their issues, look adversity in the 
 face, and give security to the Bank of England, 
 and borrow bullion coin, at high interest, for the 
 country currency, and thus giving a new bonus 
 for its stock-holders. 
 
 Let us turn again to the country bankers. The 
 fiat went forth, — pay in gold ! — How properly 
 the Bank of England behaved and obeyed the 
 mandate, we have seen ; but it had no difficulties, 
 
 * 1819. 
 
 t This act did not entirely suppress the one and two pound 
 notes before 1833.
 
 AND THEIR NOTES. 23 
 
 for its notes were Stirling ; the bullion was in the 
 market, and the one Stirling commodity exchanged 
 for the other Stirling commodity : their facility 
 for obeying the command was perfect. 
 
 The country banker might, indeed, have gone 
 to the bullion market also, and presented his ten 
 pound note, but would he have got bullion for it 
 to have carried to the Mint for coinage ? — no — it 
 was not backed by imhlic credit ; to put into the 
 scale with the paper note, opposite to the ten 
 sovereigns, the balance would have been found 
 wanting, and the bullion merchant would have had 
 nothing to do with this note, and the country 
 banker did not go and ask him. 
 
 Again, the command was given to two parties — 
 pay — the one party has no difficulties to contend 
 with, and obeys; the other party, the country 
 bankers, see the necessity, and feel their own 
 inability at the same time : both parties had 
 equally been drained of their gold during the war, 
 and for the service of the state ; but the com- 
 mand to the Bank of England was not unaccom- 
 panied with the knowledge, the notoriety, that 
 they could obey it ; — it said only pay, for we 
 have put it in your power to do so, and without 
 peril or expense to yourself. 
 
 The command to the country bankers was ac- 
 companied by no knowledge or notoriety that 
 they could obey it ; accompanied by no act on the 
 part of government that put it in their power to do
 
 24 COUNTRY BANKS 
 
 so; and the obedience required could only be 
 complied with by peril and expense to themselves. ^/ 
 
 Thus we have got the interests of the Bank of 
 England, placed in opposition to the interests of 
 the country bankers, as some politicians have 
 been fond of placing the interests of agricul- 
 turists, and 4he- manufacturers in opposition; but 
 we are all members of the same family, and we 
 never can thrive so well as when our neighbours 
 are prosperous as well as ourselves ; and all 
 jealousies are kept down among us, whether the 
 times' price should require for the broad- cloth 
 two or three shillings more per yard than usual, 
 or existing circumstances produce for the bushel 
 of wheat so many more, or so many fewer shillings. 
 
 But to return to the country bankers, what did 
 they do ? Without speaking to the cause, the 
 reader is desired only to attend to the order of 
 events; — the act of parliament takes place*, — 
 the country bankers withdraw their currency, 
 16,000,000/. out of 27,000,000/. f ; the difficulties 
 of the landlords and the agriculturists ensue with 
 their rents and profits ; next those of the manu- 
 facturers ; then the bankruptcies, and of the 
 bankers themselves, by scores ; next of the dis- 
 appointed speculators, and their work people, in 
 addition to the labouring manufacturers, all out of 
 employ ; then the idiots, the consequence of this 
 want of employment ; and, finally, the falling off 
 
 * 1819. t By 1822.
 
 AND THEIR NOTES, S5 
 
 of the public revenue, and at the rate of near two 
 millions a year* ! The writer knows there is 
 some evidence to shew that the bill was not the 
 cause of these difficulties, and he will notice that 
 evidence when he comes to speak exclusively to 
 that bill. 
 
 Retribution for the consequences of omission, 
 were never more justly due to any class of peo- 
 ple; — not to the man of straw, — not to the im- 
 provident or unfaithful speculator, who had no 
 business in the trade, but to the surviving, suffer- 
 ing, struggling, honourable country banker : and 
 from the known justice of our rulers, there can be 
 little doubt of his having all practicable redress. 
 He has the example of his brethren in Scotland 
 before him, and the choice, if necessary, of follow- 
 ing up his interests also in the same decent and 
 respectful way ; and he would not be deserted by 
 his neighbours by their not joining him in his pe- 
 titions, any more than the Scotch country bankers 
 were by theirs ; and of appearing at the bars of 
 our houses of legislature with his grievances, and 
 he could not fail being attended to, for the interests 
 of his country are identified with his own. 
 
 His case lays in a nut-shell, and is to be com- 
 prehended by the study of two words — Stirling, 
 Note. 
 
 * The revenue for the 5th of July quarter was less than the 
 corresponding quarter 1825, by near 500,000/.
 
 26 
 
 The Meeting of Parliament and the 
 Scotch Banks. 
 
 The Parliament met the first of February, un- 
 der circumstances the most inauspicious to our 
 trade and credit, the public funds tumbling down, 
 and the columns of the Gazettes full of nothing 
 but bankruptcies ; merchants and manufacturers, 
 bankers and agriculturists, all hastening to the 
 vortex of insolvency. The king's speech noticed 
 all these difficulties, and recommended his par- 
 liament's earliest attention to the subject, and par- 
 ticularly directed their observations to the violent 
 fluctuations of the currency, that life-blood of the 
 body politic, that had recently taken place, " and 
 to the state of the circulating medium of the 
 country," and their application of the proper 
 remedy ! Indeed the very evils that had arisen, 
 had been prophesied of in the preceding sessions. 
 The maximum of the deficiency of the country 
 bank paper currency had taken place in 1822, as 
 before noticed ; but it had since somewhat in- 
 creased in quantity, and the landholders, that 
 class of His Majesty's subjects who contribute so 
 largely towards the public revenue, and who form 
 the best market for the manufacturers and the 
 merchants, began to experience fewer difficulties 
 with their rents ; they had been the first to feel 
 the effects of the bleeding, the turn of the other 
 classes of society was now taking place.
 
 THE MEETING OF PARLIAMENT, &C. 27 
 
 Nothing could exceed the zeal and good wishes 
 of our rulers to find the proper remedy as recom- 
 mended in doors and out of doors ; Whig or Tory, 
 there was no distinction on this subject : every- 
 body had reason to be satisfied, in this respect, 
 with the powers to whom they owed their obe- 
 dience. 
 
 The great number of insolvents among the 
 bankers, in particular, as appeared in every suc- 
 ceeding Gazette, arrested the public attention, 
 and seemed to draw more observation to their 
 failures than to their neighbours, and to attribute 
 a larger share of improvidence to the country 
 bankers as the cause of our distresses, than to 
 the other traders and speculators who fell with 
 them. There was, however, this distinction be- 
 tween the parties; the country banker had fallen 
 after a reduction in his trade, — the other insol- 
 vents after an extension of theirs. 
 
 The public feeling was, notwithstanding, most 
 hostile to the country banker; security was the 
 order of the day, and nobody thought otherwise, 
 but that by such help, parliament had only to 
 meet, and the remedies would be found at hand, 
 and the funds recover their depression, and the 
 traders, and the merchants, and the public, their 
 credit ; and what was crooked would be made 
 straight, "and the rough places plain." 
 
 The Chancellor of the Exchequer, very early in 
 the sessions, came forward with the subject, and
 
 28 THE MEETING OP PARLIAMENl 
 
 in a speech, received amidst the frequent cheering 
 of the house, set forth the difficulties we laboured 
 under ; — and the remedies proposed were, an 
 earlier stop to the issue and circulation of the 
 one and two pound notes, than had been con- 
 templated in 1819, and some arrangements with 
 the Bank of England, in giving up certain privi- 
 leges of their charter in favour of the public, and 
 the giving facilities to the formation of joint-stock 
 banking companies, and the providing of branch 
 banks from themselves. These last measures 
 were brought forward in the upper house by the 
 first Lord of the Treasury, who, in his place, 
 equally, promptly, and patriotically, developed 
 the views of government. 
 
 In both houses questions were put from other 
 members. Whether the stoppage of the small note 
 currency bill was meant to be extended to Scot- 
 land ? and the answer of the Chancellor of the 
 Exchequer, in the lower house, was, and it was 
 received with cheers, " I cannot, for my own part, 
 see, why England should be kept on an exclusive 
 principle *," but added in substance, that the 
 period for application of the rule should, perhaps, 
 be diff'erent, and the measure as respected Scot- 
 land and Ireland be kept distinct ; and the same 
 answer was understood to have been given in the 
 upper house. 
 
 Government were, doubtless, aware of the dis- 
 
 * Courier Newspaper debates.
 
 AND THE SCOTCH BANKS. 29 
 
 crepancies that had occurred in 1762, 1763, and 
 1764, from the standard of value of the currency 
 in Scotland being paper, whilst the currency of 
 England was bullion coin, and they wished to 
 avoid the same inconveniences as then took place. 
 " While the exchange between London and Car- 
 lisle was at par," says Dr. Adam Smith, " that 
 between London and Dumfries, would sometimes 
 be four per cent against Dumfries, though this 
 town is not thirty miles distant from Carlisle, 
 but at Carlisle bills were paid in bullion coin, 
 whereas at Dumfries they were paid in Scotch 
 bank notes." 
 
 The news of the opinion given respecting their 
 notes, had hardly time to arrive in Scotland, be- 
 fore the letters of Malagrowther appeared and dis- 
 played such unappropriate censure against the 
 measures of government, as, no wonder, excited 
 the ire of one British lion amongst its members, 
 at least*. The petitions from Scotland, however, 
 poured in upon the houses of parliament day after 
 day in such numbers, and from all classes of its 
 people, from its rank, and from its commonalty, 
 its knowledge, and its riches ; the gown and the 
 cassock all took the same side of the question — 
 there was no mistaking the feeling of the people of 
 Scotland. 
 
 And that they were adverse to changing the 
 
 * See the Chancellor of the Exchequer's speech on opening 
 the Budget, 13th March, 1826.
 
 30 THE MEETING OF PARLIAMENT 
 
 paper currency of Scotland, under which all their 
 engagements had been entered into, and for the 
 conveniency of the state too, without the govern- 
 ment of the country first pointing out in what 
 way they were to obtain bullion coin to replace 
 their present currency, and to fulfil their engage- 
 ments. 
 
 It has been the province of all governments to 
 superintend and direct the value of their currency, 
 and the present difficulty has certainly arisen 
 from the neglect of the administration in this 
 respect, and as concerns the country bank paper 
 currency, in particular of 1694, and the succeed- 
 ing generations of governments since that time ; 
 indeed, it seems very dubious whether the ad- 
 ministration of 1694 at all foresaw the good effects 
 the connexion between the Bank of England and 
 government was to have, in future, time in pro- 
 ducing a Stirling currency for half the amount of 
 our circulation at least. 
 
 In changing the value of the currency from 
 gold to paper in 1797, the act did not neglect to 
 tell the country banker for his consolation, that 
 the good government of the country should make 
 it of equal value with gold ; and to the glory of 
 the country, and to the safety of the world, the 
 pledge has been redeemed, and our paper cur- 
 rency never has been depreciated : but in ex- 
 changing to bullion coin from paper coin, the 
 more difficult task, — the act of 1819, as to the
 
 AND THE SCOTCH BANKS. 31 
 
 means how, has totally left the country bankers 
 in the lurch : the case was new, and had never 
 been provided for. 
 
 The Scotch looked at the effect the act of 1819 
 had had in England, under these circumstances, 
 the government not pointing out nor providing in 
 the same act that said, — pay in gold, — the mode 
 and the possibility how they were to get posses- 
 sion of it to do so, without more peril and ex- 
 pense to themselves, than the Bank of England 
 had to experience. They trembled for fear the 
 same consequences should result to them from its 
 extension to Scotland, as had taken place in Eng- 
 land, and they, doubtless, thought they would 
 make a strong effort, to arrest the necessity of a 
 reduction of their own currency, and the crash 
 and the catastrophe that had taken place here ; 
 and the sequel, and the information obtained at 
 the end of the sessions, was a proof of their in- 
 tegrity and uprightness in so doing. 
 
 The parliament were not idle upon receiving 
 the petitions. Committees were appointed in both 
 houses exclusively to consider the case as re- 
 lated to Scotland, to whom the petitions were 
 referred, and the committees were empowered 
 to examine witnesses, and ordered to make their 
 reports, and the English question seemed almost 
 lost in the Scotch one. The public, however, were 
 satisfied that all the pains that could be taken 
 with the subject were resorted to ; the frequent
 
 32 THE MEETTNO OF PARLIAMENT 
 
 intercourse between the ministers and the bank 
 directors, and the stir, and the anxiety expressed 
 by all parties, could not fail in its good effect. 
 
 The writer had observed in the speeches of 
 different members a frequent use of the expres- 
 sion — over issue of currency ; — he had often heard 
 the same expression out of doors, and applied to 
 the prices of different commodities, and meaning 
 to convey the idea, that undue practices were 
 sometimes resorted to in this way, to enhance 
 their value by getting more currency into the 
 market, by some hocus pocus artificial means 
 than the natural wants of the markets, and the 
 trade and labour of the country, would otherwise 
 absorb. 
 
 He reasoned with himself upon the different 
 modes by which currency got into circulation, 
 the cash credits that were given to their cus- 
 tomers by bankers, the discounting of bills ; and 
 there is another mode also, to the writer's ex- 
 perience practised- but not by bankers of great 
 credit — that of giving agents a per centage for 
 the quantity of notes they issued for the firms 
 who employed them, in the purchase of corn, 
 hops, sheep, &c., at the different fairs, which are 
 resold again, and the sellers retain their com- 
 mission money, pay the notes so received to the 
 banker's London agent, who carries these notes 
 again to the different banking agents of the firms 
 that have issued them, and obtain bullion coin or
 
 AND THE SCOTCH BANKS. 33 
 
 Bank of England notes, and place them to the 
 credit of their own country banker and em- 
 ployer. 
 
 But this mode of issuing is most frequently 
 attended with loss to the banker who circulates, 
 by the quick return of the notes, to his London 
 agent, where only they are payable in Stirling 
 money, and before any interest on the note 
 issued, could have accumulated sufficient to pay 
 for the per centage of putting it into circulation ; 
 and after all there must be a real and ulterior 
 purchaser somewhere, and his money, at least, 
 was held back, until he got possession of the 
 corn, or the hops, or the sheep ; that there could 
 not be more than one sum of money in the market 
 at the same time, that represented the value of the 
 corn, or the hops, or the sheep. The notes in this 
 instance would act more as bills of exchange than 
 circulating currency ; and of the three modes, they 
 affect only the individual banker. If he is ignorant 
 of his trade, and takes bad security it is his loss, 
 and not the public's; for it cannot be supposed 
 that large bodies of bankers all combine, and at 
 the same time, so as to produce the effect sup- 
 posed, — over issue. 
 
 And wholly to their own loss ; if there is 
 nothing in the market for the currency to repre- 
 sent, it must return to the coffers from whence 
 it issued. Two sums of money never can re- 
 main to represent the same thing at the same time; 
 
 D
 
 34 THE MEETING OF PARLIAMENT 
 
 though the individual sum that represents corn, 
 hops, or sheep, may be sometimes greater and 
 sometimes smaller; — but currency cannot in- 
 crease in quantity unless there are commodities, — 
 capital — to represent its X)alue ; and therefore, it 
 is not the quantity of currency in the market, 
 that necessarily and alone influences the price of 
 corn, or any other article, but the number of dif- 
 ferent commodities, and the quantity of each, that 
 influences the amount of the currency, though the 
 sudden reduction of such a mass as 16,000,000i, 
 we have seen has influenced the price of all com- 
 modities, and thrown labourers out of employ- 
 ment by scores of thousands. 
 
 Again, take the Bank of England. — With the 
 country banks, they must all combine, a thing 
 not very possible, when their interest for doing 
 so was dubious : with the Bank of England, they 
 must have thousands of ordinary applicants to 
 produce any such effect, and the directors be as 
 many times mistaken, in the value of the security 
 accepted by them, before such an effect as over 
 issue could take place. 
 
 The writer, therefore, concludes, that though 
 an unfortunate individual might have taken bad 
 security, and lose by an over issue from his firm, 
 politically speaking, and as relates to the body 
 corporate, there can be no such thing. The idea 
 must have been the invention of some incendiary 
 against the happiness of his fellow subjects, and
 
 AND THE SCOTCH BANKS. 35 
 
 who would rule the state, if he could, by setting 
 one class of people against another ; the manu- 
 facturers, perhaps, against the agriculturists, or 
 vice versa. 
 
 So long as currency is represented by labour, 
 there cannot be too much of it ; and looking to 
 the present state of idleness in our manufacturing 
 districts, it is plain there is a deficiency of cur- 
 rency there in proportion to the number of la- 
 bourers ; that calling to mind the 16,000,000 of 
 country bank currency withdrawn, the writer 
 could not help arguing, that we must be under 
 the influence, without the intention of the law- 
 giver, certainly ; but the calamities we suffer 
 are equally the same — of some unknown, some 
 misunderstood statute, that had had all the effect 
 of making us quarrel with our prosperity. 
 
 In examining the expression — over issue — the 
 Bank of England currency, which the writer had 
 thought of, when he endeavoured to shew what a 
 perfect currency should be under that article, 
 again very forcibly occurred ; and whatever jea- 
 lousies he has expressed of the Bank of England 
 possessing the exclusive power over the whole, 
 it must be acknowledged a most happy circum- 
 stance, that they exercise the privilege of circu- 
 lating their currency, to the extent and amount of 
 half the quantity required. 
 
 But in this examination he seemed to be stum- 
 bling upon some new idea as he went along, and 
 
 D2
 
 36 THE MEETING OF PARLIAMENT 
 
 he asked himself, — Why could there not be the 
 same connexion established between the govern- 
 ment, and the country bankers now, as took place 
 between the government of 1694, and the Bank 
 of England then ? 
 
 And why should not the same good result 
 come out of such a compact a second time, as 
 before; and lead, at last, to as perfect a currency 
 for the country district, as we now enjoyed for 
 the London and the Lancashire districts ? 
 
 The whole of the same good effects, as had 
 taken up o\>e hundred and thirty-two years to 
 bring about, could not immediately be expected; 
 But could not a beginning be effected, sufficient 
 for all present purposes, and not only to enable 
 the government to say to the Scotch, and English 
 country banker, — pay in gold coin, — but pay — for 
 we have enabled you todo so ? 
 
 The writer liked the idea very much ; it came 
 as it were in the shape of an important case from 
 a new client, and he immediately fancied himself 
 a great lawyer, though he can assure his reader 
 that the retaining fee was not very large ; he 
 pondered the subject very gravely notwithstand- 
 ing, but refused the brief; he considered his 
 abilities, as not equal to the importance of the 
 task ; but he promised to recommend the client 
 to three parties to advocate his cause for him — 
 those in authority, the Scotch and English country 
 bankers, and the public, one or other of whom he
 
 AND THE SCOTCH BANKS. 37 
 
 had no doubt, if there really was anything, in 
 the client's case, would be able to prosecute it 
 to completion. But he warned the client, so 
 turned over to new advocates, that he would 
 have hosts of competitors, and that as a true 
 patriot, the writer could alone wish success to 
 that party, who had the strongest claim ; and it 
 is, that letter of recommendation, the writer is 
 now endeavouring to make out. 
 
 Towards the latter part of the sessions, the 
 bank charter amendment bill, ceding the privilege 
 to the public of establishing joint-stock banking 
 companies, with any number of partners, if not 
 nearer than sixty miles to London, passed, and 
 the small note bill also, and government had been 
 able to induce the Bank of England to consider 
 the propriety of establishing branch banks from 
 themselves in different districts. The Marquis 
 of Lansdown expressed his future intention of 
 bringing in a bill, obliging country bankers to 
 pay their large notes in gold coin, equally at 
 their country firms, as at their London agents * ; 
 and the Earl of Lauderdale expressed his inten- 
 tion of bringing in a bill, obliging the Mint to 
 coin silver, when it was produced for that pur- 
 pose by individuals, equally with goldf. 
 
 * A most useful bill whenever the country bankers are first 
 shewn how to get the bullion coin without expense to them- 
 selves. 
 
 t Also very desirable, but it will probably be attended with 
 additional expense.
 
 38 THE MEETING OF PARLIAMENT 
 
 The report from the Scotch committee in the 
 House of Commons, was brought up the 26th of 
 May, by the right honourable chairman of it, and 
 who advocated the cause of the Scotch banks, 
 in his place. The report was generally favour- 
 able to the Scotch system of banking, and doing 
 the greatest honour to its members, who, though 
 mostly going into the committee skeptics to the 
 Scotch cause, came out believers in its orthodoxy. 
 Lord Liverpool presented the report from the 
 committee in the upper house the same day, and 
 which contained an equal leaning to the merits of 
 the Scotch banks. 
 
 The committee below stairs say, " Looking at 
 the number of notes current in Scotland, under 
 five pounds, and comparing it with the total 
 amount of the paper currency of that country, it 
 is very difficult to foresee the consequences of a 
 law, which should prohibit the future issue of 
 notes, constituting so large a proportion of the 
 whole circulation." 
 
 Again, ** the committee are unwilling, without 
 stronger proof of necessity, to incur the risk of 
 deranging, from any cause whatever, a system 
 admirably calculated, in their opinion, to econo- 
 mize the use of capital, to excite and cherish a 
 spirit of useful enterprise, and even to promote 
 the moral habits of the people, by the direct in- 
 ducements it holds out, to the maintenance of a 
 character for industry, integrity, and prudence."
 
 AND THE SCOTCH BANKS. 39 
 
 The lords' committee say also, ** There is one 
 part of their system, which is stated by all the 
 witnesses, and in the opinion of the committee 
 very justly stated, to have had the best effects 
 upon the people of Scotland, and particularly 
 upon the middling and poorer classes of society, 
 in producing and encouraging habits of frugality 
 and industry." 
 
 The following totals will give the reader some 
 idea of the importance of not interfering with a 
 system as above set forth* : — 
 
 The amount of the whole currency of Scotland 
 at present in circulation, is .... £3,309,082 
 
 Of which there are in notes under five pounds , 2,079,244 
 
 The amounts of the deposits in the Scotch banks, 
 bearing an interest of four per cent to the owners 
 of it, more thanhalf of which amount was deposited 
 in sums from ten to two hundred pounds, is . 21,000,000 
 
 The amount of the cash credits as given in evi- 
 dence by the witnesses, and which the bankers re- 
 ceive five pounds per cent for, is ... 5,000,000 
 
 And the lords' committee further say, " Not- 
 withstanding the opinions which have been here 
 detailed, the committee are on the whole so 
 deeply impressed with the importance of a me- 
 tallic circulation below five pounds in England, 
 not only for the benefit of England, but likewise 
 for that of all the other parts of the empire, that 
 if they were reduced to make an option between 
 the establishment of such a metallic circulation in 
 Scotland, or its abandonment in England, they 
 * Reports from the Committees in both Houses.
 
 40 THE MEETING OF PARLIAMENT 
 
 would recommend the prohibition of small notes 
 in Scotland, but they entertain a reasonable ex- 
 pectation, that legislative measures may be de- 
 vised, which will be effectual in preventing the 
 introduction of Scotch paper into England *." 
 
 And thus closed a sessions alike admirable for 
 its wisdom and forbearance, from premature legis- 
 lating, and for its patience in investigating, for 
 future triumph, however, postponed. Even the 
 great magician of the age must have felt satisfied; 
 though his threats to evoke the claymore from its 
 scabbard were repelled with spirit f, his opinions, 
 the moment they were found valid, were respected. 
 
 Would to God that the same forbearance had 
 attended the measure of 1819, for more consider- 
 ation and more developement, in order that the 
 accomplishment of its otherwise desirable com- 
 mand, pay in gold coin, might have been obeyed 
 without prejudice and without risk. 
 
 For the writer's own part, he cannot drive from 
 his mind the consequences, that must have at- 
 tended the loss of 16,000,000 of currency, had it 
 so taken place during the late war. It is a known 
 fact with those unfortunates, who have lost their 
 limbs, that they for ever meet with bodily hurts, 
 from thinking that they still retain the lost mem- 
 bers ; and he sees the body corporate of this great 
 
 * These extracts are copied from the Courier Newspaper. 
 ■\ Vide the Chancellor of the Exchequer's speech on opening 
 the Budget the 13th of March.
 
 AND THE SCOTCH BANKS. 41 
 
 country so situated — a sleep — wake — and forget- 
 ting the amputation of his limb of 16,000,000 of 
 currency — rise — make the effort to go forward — 
 totter — and fall down prostrate at Buonaparte's 
 feet! 
 
 The Bill of the Right Honourable 
 Mr. Peel. 
 
 The act of 1819 took place with somewhat very 
 like unanimity out of doors, as in doors, and quite 
 enough, not only to exonerate the supporters of 
 the measure from all intentional wrong ; but fully 
 to prove that it was patriotism alone that origi- 
 nated the measure; and we have all felt refreshed 
 in consequence, by seeing His Majesty's face again, 
 God bless him, upon a piece of gold — but there 
 was still one warning voice held out against the 
 precipitancy of the measure, that of the experi- 
 enced and venerated parent of the Right Honour- 
 able proposer of the act. Sir Robert Peel — but 
 gold was the only password, that could be at- 
 tended to. We have got the bullion, but the cur- 
 rency that was necessary to float the goodly fabric 
 of the state, has departed from us ; and the writer 
 need not depict the situation the country is left 
 in without it. 
 
 The evidence the writer has to notice in favour 
 of the bill not being the cause, of the reduction of 
 the currency is, ** that it has taken place from
 
 4W THE BILL OF THE 
 
 the country bankers asking too high an interest 
 for their money*/' and so having kept their cus- 
 tomers away until the amount of currency uncalled 
 for and unemployed, amounted to 16,000,0000 ; 
 and this reason is deduced, as given in evidence 
 from there having been no want of bills for dis- 
 counting, or selling in exchange since 1819 ; and, 
 therefore, there is no other way of accounting for 
 this want of currency, but from the stagnation of 
 demands on home securities. This is the amount 
 of all the positive evidence the writer has seen to 
 the above effect, and lie can only meet it by nega- 
 tive or circumstantial evidence. 
 
 Whilst bullion coin was the currency for any 
 note under five pounds, Dr. Adam Smith tells us, 
 that in order for a country banker to keep 
 80,000/. of notes in circulation, it would require 
 20,000/. of bullion coin; and probably, also, the 
 writer supposes 20,000/. of uncirculated notes in 
 the coffers of the firm at home. Now when the 
 one pound note became the legal tender, that 
 part of the bullion coin, that represented pounds, 
 was no longer necessary, the banker could only 
 want silver sufficient, as change for his one 
 pound notes, 5,000/. of silver only, instead of 
 20,000/. of bullion coin. 
 
 Any person, therefore, during the paper regime, 
 could safely set up a bank of circulation to the 
 amount of 80,000/., with the capital of only 
 
 * Mr. Joplin.
 
 RIGHT HONOURABLE MR. PEEL. 43 
 
 5,000/. in silver bullion, paying interest to his 
 London banker and agent, for all his country bank 
 notes that came there for payment, until they were 
 redeemed by London bills, or other securities, 
 the country banker's notes were issued for, and 
 that would turn to Stirling money ; and the ex- 
 cess of these securities above the advances made 
 by the London agent, and the interest on them 
 made the country banker's profit, or the contrary; 
 and many such banks, no doubt, were set up. 
 The well-being of the country called for more 
 currency ; the increased population, the increased 
 national debt, its greater and increasing capital of 
 all descriptions, all our institutions, everything 
 required more currency for its support. 
 
 And who can pretend to say that less currency 
 was necessary, upon the peace taking place than 
 during the war? If the war channels were dryingup, 
 the peace sources for occupancy, were opening. 
 
 The bill of 1819 did no such thing, in words, as 
 pretend to interfere with the quantity of currency, 
 it only said pay in gold coin ; And what have 
 been the facts of the country bankers' conduct 
 upon that bill's passing? — Why, that finding 
 themselves reduced to carry on a business of 
 80,000/. circulation, with only 5,000/. bullion ca- 
 pital, where 20,000/. of bullion coin would now be 
 necessary ; they, the country bankers, acting as 
 one body, swayed by their own interest, and the 
 moral conduct their new situation pointed out as
 
 44 THE BILL OF THE 
 
 necessary, reduced their business to meet their 
 capital, three-fifths, exactly in the proportion Dr. 
 Adam Smith points out*, and determined to be 
 satisfied with a circulation of 20,000/., as they 
 could no longer support one of 80,000/. — 
 11,000,000 instead of 27,000,000 of currency f. 
 
 The bill of 1797 was worthy of its author, 
 Mr. Pitt; for it was prospective, and embraced 
 all the demands for more currency, that afterwards 
 took place, and no dilemma occurred from the 
 want of currency, during the whole of those ardu- 
 ous times, from the passing of that act to the 
 peace. It, in effect, gave the country bankers, 
 among other reasons for the change, this — we 
 may have occasion before the war concludes, for 
 four times the amount of our present currency, 
 and, therefore, by making paper instead of gold 
 the legal tender, we enable you, if necessary, to 
 issue 320,000/. with the same capital that you 
 now employ to circulate only 80,000/. of paper 
 currency. 
 
 The effect of the bill of 1819 has been, that 
 after having issued this amount of currency, or so 
 greatly increased it, under the guarantee of the 
 act of 1797, that no larger a capital than 20,000/. 
 in bullion coin, would be necessary to circulate 
 this increase of currency ; to be told now, that 
 
 * It is very pleasing to see large bodies of people swayed by 
 such correct principles. 
 
 1 See Joplin's Tables for 1818-19, and 1822,
 
 ItlGlIT HONOURABLE MR. PEEL. 45 
 
 the country banker must add three times the 
 amount, or 60,000/. more bullion coin to his ca- 
 pital, to perform the same operation. The conse- 
 quence has been, that the currency the state of 
 necessity requires, has been withdrawn, as the 
 capital could not be so added to by individuals. 
 
 The gross amount of capital required is the 
 banker's affair, it signifies nothing to the public, so 
 long as they command sterling currency sufficient, 
 to keep the industry of the country in motion. 
 Withdraw the currency, and in exactly the pro- 
 portion you do so, you have idleness, and riots, 
 and disasters of every description ; the act of 
 1819 was not prospective in preventing such 
 occurrences. 
 
 This is the first negative, or circumstantial evi- 
 dence, the writer has to produce, of the indirect 
 effect the bill of 1819 has had to reduce the quan- 
 tity of country bank currency; and it can only be 
 met by an addition to the bill, pointing out to the 
 country banker, how he is to get gold coin for his 
 own notes, and increase his capital, so as to allow 
 of his former amount of circulation. 
 
 The next evidence to the same effect is, the 
 reduction of the currency previous to the bank- 
 ruptcies. The committee of the lower house on 
 the Scotch banks, eloquently set forth the utility 
 of the Scotch system of banking, as " admirably 
 calculated, in their opinion, to excite and cherish 
 a useful spirit of enterprise," and they give this
 
 46 THE BILL OF THE 
 
 as a reason for not lightly, " incurring the risk of 
 deranging it for any cause whatever." They, the 
 members of the committee, therefore, having so 
 given in evidence, that the existing quantity of 
 currency, was necessary to the excitement of their 
 present enterprise in trade, in Scotland, cannot 
 turn round and say, it may be so there, but in 
 England, and for English enterprise, the existing 
 quantity of currency in 1819, was not necessary 
 by 16,000,000, or any other quantity. If the 
 committee feared the consequences, Scotch bank- 
 ruptcies there — they had the actual example of 
 English bankruptcies here, to govern their opi- 
 nions. 
 
 The reduction of the currency in 1819, down- 
 wards, must have affected all the fair enter- 
 prise and speculation of trade, entered into pre- 
 vious to that time, and not completed, and until 
 the consequence of that bill's passing, could be 
 foreseen, some time afterwards also. The traders, 
 so actuated by a *' fair spirit of enterprise," and 
 speculation, went to their bankers with their 
 securities — were refused assistance, from the 
 banker's own necessities — struggled as long as 
 they could from other resources — and first began 
 to disclose and feel their dangerous situation in 
 1825. The increased imports and exports, as ap- 
 peared upon the books at the Custom-House that 
 spring, and other official documents, that would 
 have been hailed as so many proofs of our growing
 
 BIGHT HONOURABLE MR. PEEL. 47 
 
 prosperity, and was, perhaps, no greater increase 
 of trade, than might have been expected, if the 
 currency had not been reduced ; was now called 
 over-trading and over-speculation ; and the insol- 
 vent bankers and traders unjustly pointed at, and 
 held up as land-marks to avoid. This is the second 
 piece of negative and circumstantial evidence, 
 produced to shew, that the bill of 1819 had indi- 
 rectly tended, to reduce the quantity of country 
 bank currency in England. 
 
 Most happy it was that, that bill did not include 
 Scotland, as well as England. They might not in 
 1819 have seen the necessity for petitioning 
 against the measure, any more than the English, 
 but they did see it in 1826 ; and that beautiful 
 system of local banking — beautiful, because so 
 useful, for the encouragement of morality and 
 order among the lower and middling classes of 
 Scotch society, as so forcibly set forth, by the 
 committees of both Houses of Parliament; and 
 the effects of that bill, would have been just as 
 disastrous in Scotland, as it has been here. 
 
 The next evidence of this description, are the 
 Scotch petitions against the measure being ex- 
 tended to Scotland ; and for what reason ? For 
 fear that the same disasters should take place in 
 Scotland, in consequence, that had ensued upon 
 that bill's passing in England. They petitioned, 
 that their whole moral system of economy should 
 not be destroyed, and ruin and desolation succeed.
 
 48 THE BILL OF THE 
 
 The Scotch bankers saw the depositors of the 
 21,000,000/. alarmed, and coming for their money 
 all at once, and with three-fifths of their currency, 
 of necessity reduced, or with 1,320,000/. cur- 
 rency only, to fulfil their engagements with, in the 
 place of 3,300,000/. currency, they now have. 
 The people themselves fortunately saw, and un- 
 derstood, their situation ; they petitioned, and not 
 a single signature, but bears witness to the indi- 
 vidual's opinion, that the bill of 1819 was the cause 
 of the reduction of the 16,000,000 of currency, in 
 this country. Those petitions contain the evidence 
 of three millions of people, that the bill of 1819 
 had indirectly tended, to reduce the quantity of 
 the currency in England. This is the third piece 
 of negative and circumstantial evidence, the writer 
 has to bring forward. 
 
 But the right honourable author of the bill 
 himself, by the eulogy contained in the report 
 from the committee, of which he was the chair- 
 man, and had so large a share in drawing up, 
 and his advocacy of the Scotch cause upon intro- 
 ducing the report, which did him so much honour, 
 bears witness of his own conviction that there 
 must be something wanting in that bill, and 
 gives a guarantee to the public that the subject of 
 it, will be again most minutely inquired into. 
 
 That right honourable person, will not shrink 
 from acknowledging a deficiency in the bill, if he 
 finds any, no more than he shrunk from being a
 
 RIGHT HONOURABLE MR. PEEL. 49 
 
 convert to the Scotch orthodoxy in the Scotch 
 committee, but will shew to the world, that like 
 those laws of the country, he has so advanta- 
 geously pruned and altered from time to time, 
 the foundations of his fame, will be broad enough 
 for his support, though he should have one error 
 to acknowledge, that had been committed also by 
 all his progenitors for one hundred and thirty-two 
 years ; the error of all the governments from that 
 date, inclusive of 1694, never having formed any 
 similar connexion with the country bankers, as 
 that subsisting between the Bank of England and 
 all the governments during that period. 
 
 But it is time to think of the Client again, who 
 must recommend his case to the reader, and to 
 his new advocate's patience in a second chapter. 
 
 £
 
 OUTLINE OF THE PLAN. 
 
 CHAPTER THE SECOND. 
 
 Article I. 
 
 That a minimum security shall, in future, be required 
 by legislative enactment, from every person who is, or 
 means to be, a country banker, say for 5000/., without 
 which no individual or plurality of persons shall be quali- 
 fied to carry on the business of banking out of London. 
 
 Explanation. 
 
 All persons must agree, that ^aatbotrt ^fflae 
 ^ftpk^Jn a trade that so vitally affects the pub- 
 lic, no one ought to be permitted to exercise it 
 without security ; but what the minimum should 
 be, may require further information. The writer 
 leans to the idea that 5000/. is too high, as there 
 are many remote districts, where probably a bank 
 of circulation, requiring less capital, might be of 
 great local utility. 
 
 E 2
 
 52 OUTLINE OF THE PLAN. 
 
 Article II. 
 
 But that the choice of giving any further security be- 
 yond this 5000/., and the extent of such further security, 
 be wholly left to the individual, or firm the banking esta- 
 blishment belongs to. 
 
 Explanation. 
 
 It can never be necessary, and therefore not 
 politic, to legislate where it is already the sub- 
 ject's own interest to do what is wished of him. 
 
 Article III. 
 
 That for this purpose some new office shall be added 
 to the establishment at the Mint, where all country 
 bankers shall be required to appear with such obligatory 
 or additional security, at their own choice, and with 
 their titles to the same, which should be immediately 
 submitted to the legal crown officers for their approval. 
 
 Explanation. 
 
 The Mint has been named only as first occurring, 
 and as connecting itself with the subject, and be- 
 cause some new assistance must be wanting if 
 these ideas should be put in execution, and the 
 titles to the property offered in security, neces- 
 sarily should be valid. 
 
 The annuity government pay to the Bank of
 
 OUTLINE OF THE PLAN. 53 
 
 England for the management of the public con- 
 cerns, must be considered as including the ma- 
 nagement of the London and the Lancashire cur- 
 rency, as a part of the public business ; in the 
 same way, some expense could not be avoided in 
 the proper management of the country bank cir- 
 culation ; But what would the expense of any 
 establishment, here supposed necessary, be, com- 
 pared to the falling off of the revenue, for instance, 
 of the late July quarter alone, near 500,000/. ? 
 
 Article IV. 
 
 That notice shall be given to the parties concerned, so 
 soon as this opinion shall be received, and if favourable, 
 the capital of the property so offered as security, whether 
 real or personal, shall be held in trust by the Court of 
 Chancery for the public, and the title-deeds remain in 
 the possession of the crown, but for the following pur- 
 poses. 
 
 Article V. 
 
 And first, if the security was in real property, or so 
 much of it as was in real property in trust that the same 
 person or persons who came forward with such security, 
 should remain in the management and possession of the 
 same, receive the rents, grant new leases, cut down tim- 
 ber, and do all such acts as were for their own emolu- 
 ment, and to the extent of the same legal privileges, 
 short only of disposing of any part of the capital of the 
 same as he, or they possessed, before such security was 
 given.
 
 54 OUTLINE OF THE PLAN. 
 
 Explanation. 
 
 Meant to connect, as Article IV., the bankers* 
 interest with the public benefit. 
 
 Article VI. 
 
 And, secondly, if personal property, or so much of the 
 security given as was personal property in trust, that 
 the same person or persons who came forward with such 
 personal security, should continue in the receipt of all 
 the annuities, whether public or private, belonging to 
 such personal capital, and to do all such personal acts 
 relating to the same, and to the extent of the same legal 
 privileges, short only of disposing of any part of such 
 personal property as he or they possessed before such 
 security was given *. 
 
 Article VII. 
 
 And that upon the security so offered being accepted, 
 the parties concerned should be entitled to receive at His 
 Majesty's Mint, after paying the proper stamp duty, the 
 privilege of issuing sterling country bank notes, to be 
 made as good and legal tender by Act of Parliament, 
 according to the amount, and the time specified on the 
 note, but for no longer time, suppose three years, as 
 the bullion coin, and the Bank of England note, now is, 
 and to the amount of the minimum security of 5,000/., 
 or to the amount and full extent of any greater security, 
 the party or parties shall have come forward with, and 
 
 * See Explanation, Articles IV. and V.
 
 OUTLINE OF THE PLAN. OO 
 
 which shall have been so approved of on the part of the 
 Crown. 
 
 Explanation. 
 
 The Bank of England, from 1694, the date of 
 their first charter, when they put into the hands 
 of government 1,200,000/. as their security, re- 
 ceiving an annuity for the same downwards to the 
 present time, have always exercised the privilege 
 of issuing notes to any extent ; and this connexion 
 with government so first formed, and kept up 
 since by more loans, and purchases of govern- 
 ment securities, has stamped that golden value 
 upon their currency, it now possesses so entirely 
 to the advantage of the realm as to the amount of 
 half its currency. The country banks circulate the 
 other half of the currency, and it is truly of as 
 much importance, that their part of the currency 
 should be of sterling value, as that the part issued 
 by the Bank of England should be such. 
 
 And of two servants of equal merit, they have 
 each the same title to the same immunities, the 
 country banker to receive the privilege and ad- 
 vantage of a sterling note, to the extent of the 
 security he gives, as the Bank of England to the 
 security it gives. It is true that time has made 
 the notes of the latter all golden ; and the sooner 
 the connexion, here first solicited between the 
 country banker and the government, is formed, 
 and the longer it is kept up, the earlier will the
 
 56 OUTLINE OF THE PLAN. 
 
 country bank circulation be matured, to the same 
 perfection, as the other half of the currency. 
 
 The making such sterhng country bank note a 
 legal tender, makes them at once available in 
 every payment, in the public annuities, as others, 
 and of golden value. The time of circulation is 
 limited, that the government may have periodical 
 opportunities of sending more bullion currency, 
 if necessary, to, and knowing that every, the re- 
 motest part of the empire, has a supply of gold 
 coin for the people. 
 
 On the other hand, if the supply of gold in the 
 market for coining falls off, as in 1797, the country 
 will, at least, command a sterling country bank 
 paper currency, and without risk of the dilemma 
 we are now so severely suffering from, M'henever 
 a peace, perhaps, and the bullion appears in the 
 market again ; for the sterling country bank note 
 then, like the Bank of England note now, would 
 exchange for gold. The larger the security the 
 country banker is able to give, the better for him- 
 self, and the better for the public : the interest of 
 the two parties go together. 
 
 Article VIII. 
 
 And that the country bankers shall have the choice, of 
 dividing the capital amounts of their respective securities 
 so given, into notes of ten pounds, five pounds, or one 
 pound, at their pleasure ; and that they shall not be pre-
 
 OUTLINE OP '^HE PLAN. 57 
 
 vented, but have full liberty to issue their private pro- 
 missory notes also ; and in addition to the sterling notes, 
 to any amount, and of any denomination, from one pound 
 inclusive, and upwards, at their own will and pleasure, 
 and as at present. 
 
 Explanation. 
 
 It seems necessary not to limit the banker in 
 his issue of private promissory notes, any more 
 than the Bank of England was limited in 1694, or 
 is now, to be certain of a sufficient supply of cur- 
 rency, and unnecessary to control the division of 
 the largest notes, and impolitic to interfere too 
 much with the one pound promissory notes, in the 
 first instance ; the appearance of the gold coin 
 must, sooner or later, put them out of coun- 
 tenance*. 
 
 But as one of the greatest advantages of these 
 ideas, is to assimilate the Scotch and English cir- 
 culation to a bullion, golden currency, and our 
 information tells us that two-thirds of the Scotch 
 currency, out of 3,300,000/. is in notes of one 
 pound, though the Scotch bankers ^vsaH^ no 
 doubt, avail themselves of the boon, by giving all 
 the security in their power, neither they, or the 
 
 * Mr. Burke has said, where paper appears, gold is sure to 
 disappear, and the writer does not mean to oppose such au- 
 thority ; but it occasioned the idea of periodical supplies of 
 gold coin, and which, it is to be hoped, together with the ge- 
 neral diffusion here proposed, would correct the inconvenience.
 
 58 OUTLINE or THE PLAN. 
 
 English country bankers would, probably, be 
 able to give security to such an extent, as to make 
 one pound notes immediately unnecessary every- 
 where, though at length, no doubt, they would 
 become superfluous. 
 
 Article IX. 
 
 And which notes shall, among' other formalities, have 
 engraved upon them — sterling for ten pounds — or as 
 the case may be ; and the words — security to this 
 amount being in the hands of government; — and their 
 private promissory notes should have engraved upon 
 them, in addition to their other designation of one 
 five or ten pounds, as the case may be — the amount of 
 the capital given to government in security, and for 
 which they issue sterling notes — thus the capital — given 
 in security to government by this firm, is 5,000/., 20,000/., 
 60,000/., as the case may be. 
 
 Explanation. 
 
 The whole amount of the security given by each 
 firm, being printed on the private promissory note, 
 would add value to it, without taking value from 
 the sterling note, where it would only be necessary, 
 that the holder should know that the amount of it 
 was in the hands of government; and this direc- 
 tion, respecting the private note, would act as an 
 incitement to the banker, to come forward with 
 the largest security in his power.
 
 OUTLINE OF THE PLAN. 59 
 
 Article X. 
 
 But with this reserve and election, as to the sterling 
 notes at the time of their issuing, always excepted and 
 reserved, that the crown should have the direction, 
 whether the whole of the amount of the capital of the 
 security given, or what portion of it, should or should 
 not be divided into one pound notes, — or if any should — 
 and the election also of retaining the notes, if the 
 treasury thought fit, after the bankers had put their 
 signatures to them, but giving to the parties concerned, 
 so many golden sovereigns, or silver coin, one or both 
 mixed, for the whole, or any part of them, as the ster- 
 ling notes were a legal tender for. 
 
 Explanation. 
 
 The first part of this article has been previously 
 explained ; the latter part shews how, in the first 
 instance, the sterling note is to be exchanged for 
 bullion coin, and how the gold and silver coin is 
 to be circulated, and the country circulation to be 
 kept supplied with it, equally with the London 
 and the Lancashire districts. 
 
 Article XL 
 
 And that it should be obligatory on the part of the 
 country bankers to return with the notes to the Mint, 
 say every three years, for the purpose of paying a stamp 
 duty, receiving new notes, cancelling the old ones, and 
 giving a periodical opportunity and election to the
 
 60 OUTLINE OP THE PLAN. 
 
 Treasury to retain such new notes, and to give so much 
 bullion coin as they were a legal tender for in the place 
 of them, with the understanding, that such amount of 
 bullion coin should be bona Jide car vied to, and issued 
 by retail from, the banking firms the respective parties 
 belonged to, and that even a bond should be entered 
 into, if required, to^the above etPect. 
 
 Explanation. 
 
 The onus of collecting the notes, and carrying 
 of them to the Mint every three years, must fall 
 somewhere, and no parties can be more proper 
 than those who are to benefit so largely, though so 
 properly and so justly, by the notes issuing. The 
 present private notes always return to them in the 
 proper time, with few exceptions, and there ap- 
 pears no reasonable objection why they should 
 not do so, in the sterling note case also ; but the 
 wheel must be set a going, and experience take 
 place, to be able to provide for every difficulty. 
 
 The latter part of this article provides for the 
 periodical payment of a stamp duty and security, 
 that the bullion coin obtained by the country 
 banker at the Mint, should not otherwise be 
 made use of, but as country bank circulation. 
 
 Article XII. 
 
 That for this purpose, whenever thought necessary, 
 the Treasury should give their draft upon the Bank of
 
 OUTLINE OF THE PLAN. 61 
 
 England for so many golden sovereigns, or gold and 
 silver coin of the realm, as the respective amounts of 
 security given, and notes returned required, to the Mint, 
 who, on its part, after paying the bullion coin to the 
 parties entitled to it, should pay the sterling notes so 
 retained into the Bank of England to the account of the 
 Treasury. 
 
 Explanation. 
 
 This points ont the mode the Mint are to get 
 the gold coin to be given to the country banker, 
 and supplying its place and value at the Bank of 
 England, by paying the sterling notes, the bullion 
 coin has exchanged for, to the account of the 
 Treasury who have advanced the gold coin. 
 
 Arttcle XIII. 
 
 That after the expiration of every, the said term of 
 three years, they, the sterling notes, should be payable 
 only by and at the firm of the bankers, on whose account 
 they had been permitted to be issued, and for the space 
 of ten weeks only. 
 
 Article XIV. 
 
 And from and after the expiration of every the said 
 term of three years, and the term of ten weeks, to be 
 payable only at His Majesty's Mint ; and it should be 
 compulsory upon the parties producing the note for 
 payment, to procure also two reputable housekeepers 
 to give security that no fraud was committed.
 
 62 OUlTLINE OP THE PLAN. 
 
 Article XV. 
 
 And to be penal upon all parties, after the expiration 
 of every said term of three years, to pass such note, or 
 to endeavour to obtain payment for it in any other way. 
 
 Article XVI. 
 
 That three full calendar months, but no longer a term, 
 should be allowed the bankers to bring their old notes, 
 and to receive their new sterling notes, or bullion coin 
 instead ; but that no new note, or amount in bullion 
 coin, should issue, or be given to the bankers, without 
 the corresponding old note being first given up to be 
 cancelled for it, but to be kept for the party or parties 
 entitled to it, after the expiration of every three years 
 and three months, at the Mint. 
 
 Explanation. 
 
 The great object to the public appears to be, 
 that no very large sum of currency should be kept 
 out of the market, or from being at hand to go to 
 if called for ; but as all the country bankers would 
 hardly exchange their notes, either on the same 
 day, or the same part of the year, even though 
 there may be some apprehension, no real incon- 
 venience, it is hoped, would ensue from the ar- 
 rangement in the three last articles. 
 
 And at the same time a periodical opportunity 
 of throwing more gold coin into the country circu-
 
 OUTLINE OF THE PLAN. G3 
 
 lation, seems too valuable an advantage to give 
 up ; and at last as the country banker was able to 
 follow up his own interest by giving more security, 
 the time would arrive when it might be safe to 
 legislate, and to say, the private promissory note 
 must now only be paid in gold coin, at the country 
 firm, and at once is secured that golden-nest egg, 
 before mentioned in these pages, in every country 
 town in the kingdom. 
 
 At present, let what will be done, the attention 
 that government have so laudably given to the 
 subject, the large quantity of bullion that has been 
 provided and coined since the peace, more than 
 25,000,000, and which, if it could be kept in cir- 
 culation, would, perhaps, be sufficient for the 
 whole country. This bullion stream runs no- 
 where now but towards the capital, where it accu- 
 mulates and lays gaping for employment ; and as 
 we do not, at present, know how to make use of 
 it ourselves, entices, as it were, Messrs. Roth- 
 childs, Messrs. Goldsmidts, and Messrs. all the 
 other Loan Contractors, and Co., to make use of 
 it for us, and to send it to the courts of Prussia, 
 Persia, God knows where ! anywhere but to the 
 poor of England, it was peculiarly destined for, 
 and among whom, was it but once only generally 
 diffused, it would not be so e^isy to collect 
 in bulk again for foreign courts ; nor need the 
 trade of these gentlemen be interrupted by the cir- 
 cumstance, as they might still command the
 
 64 OUTLINE OF THE PLAN. 
 
 ingots, though, providently, not the British 
 Sovereigns. 
 
 Article XVII. 
 
 And that it shall, nevertheless, whether the banker 
 produces the whole of the old notes, or only a part to be 
 cancelled, after the expiration of the three years and 
 three months, as above, be obligatory upon him or them, 
 to pay the full stamp duty, on the whole of the security 
 given by each particular firm, and so on, every succeed- 
 ing three years and three months the statnp duty became 
 due, and that the exchanging the notes should take 
 place ; and also that it should be obligatory on the 
 banker to sign the new note, retained at the Mint, for 
 the parties entitled to it ; but the countersign by the 
 officers at the Mint, should not be put to it before the 
 legal proof to the ownership, should have been made out, 
 but only when the new note, or bullion coin was given to 
 the person or persons entitled to it. 
 
 Explanation. . 
 
 The onus is again thrown upon the banker, as 
 in Article XL, and for the same reason as there 
 given to prevent the falling off in the public re- 
 venue; but there is no judging accurately of the 
 effect in such cases, but from experience and 
 practice. This article also further notices the dis- 
 position of the outstanding old notes.
 
 OUTLINE OF THE PLAN. 65 
 
 Article XVIII. 
 
 And that it should be obligatory upon the Mint, be- 
 fore three of the highest officers on duty that day, any 
 banker should bring his old notes, to be exchanged for 
 new notes, or bullion coin, and before such banker, and 
 previous to such new notes, or bullion coin, being given 
 to such banker, to cancel the old notes. 
 
 Explanation. 
 
 It must be allowed absolutely necessary to com- 
 ply with the provisions in the above article. 
 
 Article XIX. 
 
 And likewise obligatory upon the Mint to require the 
 signature of the banker, together with the signature of 
 three officers of the Mint, to the return to be made of the 
 transaction to the Treasury, and also his certificate of 
 the numbers and separate amounts of the notes, if any 
 outstanding, and not brought by such banker to be ex- 
 changed ; which return of the notes so cancelled, and of 
 the numbers and amounts of the notes so certified to be 
 outstanding, to be published for the information of the 
 public in the following Gazette. 
 
 Explanation. 
 
 It contains further provision for the important 
 purposes of Article XVIII.
 
 66 OUTLINE OP THE PLAN. 
 
 Article XX. 
 
 And further, that it shall be obligatory upon the Mint, 
 by the last day of the expiration of every, and each such 
 terms of three years, to be prepared with the orders from 
 the Treasury, and the new notes, or bullion coin, that 
 may belong to each respective banking firm, that no 
 delay might take place on the pad of the government in 
 exchanging the old notes, for the new ones, or paying 
 the bullion coin for them, at the option of the Treasury. 
 
 Article XXI. 
 
 And so often as any outstanding single old note shall 
 be exchanged, or the new note, paid for in bullion coin 
 at the Mint, such new note, or amount in bullion coin, 
 whichever is so retained, shall immediately be paid into 
 the Bank of England to the account of the Treasury^ and 
 the old note destroyed as before ; and a return shall be 
 made to the Treasury of the transaction, and notice of 
 the same, together with the number and amount of the 
 note, published in the foHowing Gazette, and the officers 
 at the Mint, are to take care before such old note is ex- 
 changed, or new oie paid for, that the number and 
 amount corresponds with that before published in a for- 
 mer Gazette. 
 
 Article XXII. 
 
 And as to, for, and concerning the capital; real or per- 
 sonal property, so remaining in trust for the piblic in 
 the Court of Chancery, as it is possible for so great an
 
 OUTLINE OP THE PLAN. 67 
 
 advantage, though not greater than the Bank of Eng- 
 land has always enjoyed, as is here held out to bond fide 
 bankers, that designing persons might come forward 
 professing the wish to become a banker or bankers, for 
 the sake only of obtaining a large sum in stei ling notes, 
 or bullion coin, in addition to their income, from their 
 real or personal capital they were willing should be so 
 held in trust by the Court of Chancery. 
 
 Let it be enacted, that whenever any person or per- 
 sons, not having before exercised the banking business, 
 shall appear at the Mint, and express their desii-e to 
 become a banker or bankers, it should be competent for 
 the officers at the Mint, and they should be required to 
 do so, to demand from such applicants, if the firm is 
 meant to be established in a village, a certificate from 
 three of the largest land-owners of the parish or neigh- 
 bourhood ; if in a town, from three-fourths of the in- 
 habitants who pay taxes to the king, declaring that the 
 applicants are good and competent persons for carrying 
 on the banking business, and that they believe It is their 
 intention to establish the banking firm, as set forth by 
 him or them, and their opinion of what convenience it 
 will be of, if any, to the neighbourhood. 
 
 Article XXIII. 
 
 And moreover, it should be imperative upon the offi- 
 cers at the Mint, during tlie progress for admitting any 
 applicant to become bankers, to inform themselves of 
 their characters, and bond fide intention by every other 
 means in their power, to warn thetn of the impro- 
 priety and danger of professing intentions they did not 
 mean to put into execution. 
 
 F 2
 
 68 OUTLINE or THE PLAN". 
 
 Article XXIV. 
 
 And whenever, notwithstanding, the new banking 
 firm as set forth by the parties, should not have been 
 established in the said place, or parish so mentioned, 
 within, say six calendar months, from the day of the 
 sterling notes or bullion coih having been paid to them, 
 that His Majesty's Attorney-General should be required 
 to i)rosecute the party or parties for the offences, and if 
 found guilty, the whole of the real or personal property, 
 so held in trust by the Court of Chancery for the public, 
 should be declared forfeited to the crown, and the party 
 or parties themselves be declared outlaws and infamous, 
 and for ever afterwards incapacitated from exercising 
 any trade, or calling in any of His Majesty's dominions. 
 
 Article XXV. 
 
 And whenever any banker or bankers, having the ad- 
 vantage of being permitted to issue sterling notes, shall 
 become a bankrupt or bankrupts, notice of the issuing 
 of the commission of bankruptcy should be immediately 
 given to the Mint, which should, with the Court of Chan- 
 cery, be authorized and required to proceed and sell all 
 such real and personal property and estate, so held in 
 trust from the firm the bankrupt, or bankrupts belonged 
 to for the public, before a Master in Chancery, if real 
 property or private annuities; if public annuities by the 
 king's broker, under the order of the Court of Chancery 
 and the Mi?it : the proceeds in both cases to be paid to 
 the Mi?it. 
 
 And immediately paid by the Mint into the Bank of 
 England, to the account of the Treasury ; but who shall
 
 OUTLINE OF THE PLAN. 69 
 
 replace the same at the Mint, at the end of the three 
 years, the banker's outstanding' notes are a legal tender' 
 for, and the proper notices of the same to be published 
 in the Gazette. 
 
 Article XXVI. 
 
 And where the proceeds of such sale, after paying all 
 expenses, exceeded the amount of the sterling notes out- 
 standing, and advanced to the bankrupt or bankrupts by 
 the Mint, the excess should be paid to the bankrupt's 
 assignees for the benefit of the rest of his creditors ; but 
 when, on the contrary, the sale, after paying all ex- 
 penses attending the same, falls short of what the bank- 
 rupt's estate was so held in security for, His Majesty 
 should be entitled, as in all other cases, to receive the 
 difference out of the other portions of the bankrupt's 
 estate, and it should not be competent to the bankrupt's 
 assignees, to make any dividend to the other creditors 
 before such debt to the crown had been satisfied. 
 
 Article. XXVII. 
 
 And besides the usual notice of the bankruptcy being 
 published in the Gazette, a notice from the Mint should 
 be published also, of the number of outstanding sterling 
 notes issued on account of such bankrupt firm, and 
 the numbers and amount of each ; and that the notes were 
 payable at the Mint^ as well as at all other places, except- 
 ing only the bankrupt's late firm ; the notes so paid at 
 the Mint, to be destroyed as before, and the returns of 
 the same to be sent to the Treasury, as before, and the 
 notices published in the Gazette, as hithertofore.
 
 70 OUTLINE OF THE PLAN. 
 
 Article XXVIII. 
 
 And the Lords of the Treasury and the officers of the 
 Mint should be required to take notice and make pro- 
 vision accordingly. 
 
 The writer has gone at some length into both 
 the articles and the explanation, as the best 
 answer to the common observation ppplied to 
 every new pioposal, '* that may be very good 
 THEORY but how rcduco it to practice," and 
 to shew that what has been here advanced, arc 
 not merely visionary ideas, but are capable of 
 being made a sound, useful, pract' cable plan. 
 The piih of the plan, is contained in Articles IV, 
 VJ, and VII. 
 
 But the important question, not to be lost sight 
 of, is not whether this, or any. other system should 
 be adopted in preference, but that that plan 
 should be made use of, which promises at the 
 earliest moment, to refill the present vacuum in our 
 currency, and that would the soonest give employ- 
 ment and bread again, to the starving part of our 
 population, and restore the public revenue and 
 credit, to their former bearing. 
 
 It is too late, after reading in the book (Dr. 
 Adam Smith's), which has been the creed of the 
 country, in all matters of political economy, ever
 
 OUTLINE OF THE PLAN. 71 
 
 since the earlier times of Mr. Pitt's administration 
 — that a paper currency requires less bullion 
 capital to circulate it, than a bullion currency 
 does — to suppose now, that the fault of our dis- 
 tresses lays with the English country bankers ; 
 or anywhere, but from our own errors in prema- 
 turely passing the act of 1819. 
 
 The writer does not consider himself a candidate 
 for any situation on this occasion, but he would 
 extremely lament, if any new plan was acted upon 
 without evidence from the body of the English 
 country bankers being first had ; whether, for 
 instance, under the sterling note system here set 
 forth, they should not be able to issue a larger 
 supply of currency, to fill up the present vacuum 
 ofit, if there were customers and security ofl'ered, 
 than they now do, and to what amount — and 
 compared with any other system produced for 
 their opinions — under which they would be able 
 to increase their issues when wanted, to the 
 greatest extent. 
 
 The subject is mentioned as, if thought neces- 
 sary, it does seem that through the medium of 
 the magistrates at the petty sessions in the coun- 
 ties — and requests made to, and answers given 
 from, the different bankers in each county to these 
 magistrates — and thence returns made to govern- 
 ment, that the fullest evidence might be obtained 
 of what additional supply of currency, and how 
 soon, under each of the systems proposed for the
 
 V2 OUTLINE OF THE PLAN. . 
 
 banker's opinion ; and such an inquiry could not 
 fail to be accepted as a healing to the wounds 
 they are labouring under. 
 
 There are, as the writer apprehends, many 
 country bankers still, whose business has been 
 suspended since 1819, but who have most honour- 
 ably paid their twenty shillings in the pound, and 
 who would again engage in it, under any advan- 
 tageous system ; and such bankers might, at least, 
 help to fill up the present vacuum in the currency. 
 
 CONCLUSION. 
 
 The reader will not have perused these few 
 pages without feeling surprised, that, with such 
 a population as this country contains, no one 
 person should have been aware that by passing 
 the act of 1819, without provision to the contrary, 
 four times the amount of capital, for supporting 
 the then existing quantity of currency, 27,000,000/. 
 than had been before employed, dividing by 4, 
 or, 6,750,000/., instead of 1,687,500/., according to 
 Dr. Adam Smith's* calculations, was immediately 
 to become necessary. 
 
 The country bankers themselves were not aware 
 
 * See his Wealth of Nations, vol. i. pages 435-450, edit. 6, 
 and the different heads under the article Bank, deducting three- 
 fourths orthree-fifths, as the example is wanted, from either page, 
 when the currency is to be paper, and adding it again when the 
 currency is to be bullion coin, gives the result spoke of in the 
 text.
 
 OUTLINE OF THE PLAN. 73 
 
 of it at the time*, or, like the Scotch, they would 
 have petitioned. It was only when the act had 
 passed, and they examined into their situation, in 
 their closets, that they saw the dilemma they were 
 placed in ; but they all saw it at last, for they all 
 did the same thing, reduced their issues to fit 
 their capital, as their capital would no longer fit 
 their currency— 16,000,000/. out of 27,000,000/ 1- 
 
 The writer can take no merit to himself at this 
 discovery beyond his neighbours ; for, like them, 
 he had hitherto hailed the bill of 1819, as the 
 means of returning to a bullion currency, without 
 suspecting any evil effect from it. Accident alone 
 has directed these observations; he knows his 
 insufficiencies and acknowledges his errors, but 
 which are, indeed, so universal in this unfortu- 
 nate case, that though we all deplore the cala- 
 mities produced by the omission, no one can say 
 to his brother, you did it. 
 
 The alternative left to the country appears to 
 be, either to place the country bankers upon the 
 same footing, as far as practicable, as the Bank 
 of England, by inviting them to come forward 
 with their securities, and giving them also the ad- 
 vantage of a sterling note, and the opportunity, by 
 such an enlargement of their capital, to extend 
 the amount of their issues as in 1819 and before, 
 
 * It is but fair argument to say, the lawgiver himself could 
 not have been aware of it, or he would have supplied the omis- 
 sion, or the legislature would not have passed the bill. 
 
 t See Mr. Joplin'b Tables.
 
 7^ OUTLINE OF THE PLAN. 
 
 if necessary, when all our labourers were in 
 employment, and the country enjoyed the fullest 
 prosperity, and to enable the country bankers to 
 meet the demands of their neighbours, and the 
 public, when they had security to give, and occa- 
 sion for the currency. 
 
 And not simply for the advantage of the country 
 bankers, and that the direction to them in future 
 may be — pay in gold coin, for we have enabled 
 you to do so — bill to be prepared as well with the 
 answer to any deputation, that attributes our dis- 
 tresses to a wantof currency — we have put it in the 
 power of the country bankers to issue any quan- 
 tity of currency they choose — and thus putting at 
 rest the question, as it regards a full amount of cur- 
 rency being in the ma>ket now, or the contrary. 
 
 Or else to wait quietly the event, and the conse- 
 quences of more labourers being thrown out of 
 employment, and more deficiencies in the rents 
 and profits of our agriculturists and land-owners, 
 more deductions from the amount of our public 
 revenue, and more taxes to supply the loss. 
 
 Even while the writer's pen is in his hand, there 
 have been two deputations waited on ministers, 
 upon the subject of our distresses, and both were 
 received with the most marked curtesy, and the 
 most patient attention. The first from Birming- 
 ham, who, with the Scotch petitioners and the 
 writer, attribute our present evils to the defi- 
 ciency in the amount of the currency ; and the
 
 OUTLINE OP THE PLAN. 75 
 
 only remedy, a return to an ample and secure cir- 
 culating medium : and these gentlemen were not 
 dismissed till after an hour's hearing, nor without 
 the strongest assurances that the facts contained 
 in their representations, should have the most 
 serious consideration of His Majesty's government. 
 
 It was, however, painful to read that after the 
 experience of ayearandahalf,ourdistresses should 
 still be attributed to over-trading, as in the spring 
 of 1825. The writer would continue to think so also, 
 as he did then, because -ms^ exalted persons and 
 patriots said so, if he had not since informed himself 
 that the reduction of the currency, 1822, preceded 
 the distress and the bankruptcies, 1825, which 
 were not, therefore, the consequences of mistaken 
 bankers assisting improvident traders, who, fail- 
 ing in their speculations, both became bankrupts 
 together ; but of unfortunate traders who had, 
 more probably, embarked in their adventures 
 when there was a full flow of currency, but who, 
 in the midst of their engagements, unexpectedly 
 found the country bankers without currency suflS- 
 cient to support the fair enterprise of trade, in 
 which they had embarked. 
 
 But the writer would hardly have been led to 
 the consideration of this subject, had it not been 
 one of such vital importance, as to demand the at- 
 tention of every member of society, however hum- 
 ble, and at a time when the more affluent are 
 giving their money in subscriptions, for the sup- 
 port of the sufferers, he felt called on to offer his
 
 76 OUTLINE OF THE PLAN. 
 
 mite — in a remedy for the existing evils — submit 
 ting it as it presented itself to his mind, in the 
 hope it may lead to such a new view of the subject, 
 as may conduct those more deeply read in political 
 economy, to practical and beneficial results. 
 
 When we were obliged to have recourse to a 
 paper currency in 1797, which was at the time 
 thought so hazardous by many, it proved, beyond 
 all calculation, a mean of supporting us through 
 our arduous conflict. 
 
 We have as little been aware that a deficiency 
 of 16,000,000 of currency would rise as a new 
 and formidable enemy, attacking the vital sources 
 of our prosperity. 
 
 May we not hope, then, that the Supreme Dis- 
 poser of all Good, who guided our fleets and 
 armies to such signal victories, will direct the 
 heads of our rulers to some such measure, as will 
 save our artisans and labourers from starvation, and 
 our public credit from destruction ! 
 
 And thus the writer takes leave of his subject, 
 and of the parties whose advocacy he has solicited 
 for the client— those in authority — the Scotch and 
 English country bankers — and the public. 
 
 Hampton-Court Palace, 
 August 17, 1826. 
 
 THE END, 
 
 London ; Printed by W. Clowes, 14, Charingcross.
 
 rovi^°e> 
 
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