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Rh in gold, or paper equivalent to gold, by raising the denomination of the coin twenty-five per cent., however gross and palpable, would not have been greater than was actually done them in 1814, by compelling them to receive payment of their just debts in paper depreciated to that extent. It is true, that after a currency has been for a consider able period depreciated, as much injustice is done by rais ing, as was previously done by depressing, its value. But there is good reason to doubt whether the depreciation from 1809 to 1815 (for the depreciation of 2 per cent, during the six preceding years is too inconsiderable to be taken into account) extended over a suflicie ntly lengthened period to warrant the Legislature in departing from the old stan dard. It is needless, however, to offer any opinion on this rather difficult point, for we have seen that the value of paper was raised in 1816 and 1817 almost to par by acci dental circumstances without any interference on the part of Government or of the bank. Sir Robert Peel s Act, to which this rise had been ascribed, not being passed till 1819, could have nothing to do with what occurred two or three years previously. Its object was twofold, to redeem the pledge given by Parliament to restore the old standard on the return of peace, and to shut the door against any fresh depreciation of paper.

History of Banking from the Resumption of Cash Payments to the Crisis of 1825.

The resumption of cash payments did not, however, put an end to the vicissitudes of banking. Notwithstanding the ample experience that had been supplied by the occur rences of 1792-93 and 1814-16, of the mischievous conse quences of the issue of paper by the country banks, and of their want of solidity, nothing whatever was done, when provision was made for returning to specie payments, to restrain their issues, or to place them on a better footing. The consequences of such improvidence were not long in manifesting themselves. The prices of corn and other agricultural products, which had been greatly depressed in consequence of abundant harvests, in 1820, 1821, and 1822, rallied in 1823, and the country bankers immedi ately began to enlarge their issues. It is unnecessary to inquire into the circumstances which conspired, along with the rise of prices, to promote the extraordinary rage for speculation exhibited in 1824 and 1825. It is sufficient to observe, that in consequence of their operation, confidence was very soon carried to the greatest height. It did not seem to be supposed that any scheme could be hazardous, much less wild or extravagant. The infatuation was such, that even the most considerate persons did not scruple to embark in visionary and absurd projects ; while the extreme facility with which discounts were procured upon bills at very long dates, afforded the means of carrying on every sort of undertaking. The most worthless paper was readily negotiated. Many of the country bankers seemed, indeed, to have no other object than to get themselves indebted to the public. And such was the vigour and success of their efforts to force their paper into circulation, that the amount of it afloat in 1825 is estimated to have been nearly 60 per cent, greater than in 1823. The con sequences of this extravagant and unprincipled conduct are well known. The currency having become redundant, the exchanges began to decline in the summer of 1824. The directors of the Bank of England having unwarily entered, in the early part of that year, into an engagement with the Government to pay off such holders of 4 per cent, stock as might dissent from its conversion into a 3 It may be worth while, perhaps, to observe that it has been alleged, in opposition to what is now stated, that the difficulties of the bank in 1825 were not caused by any excess either of its issues or of those of the country banks, but by the too great amount of the capital, that is of coin and bullion, it had lent ; and in proof of this allegation, we are referred to the increase of nearly eight millions in the amount of securities which the bank held in August 1825 over their amount in August 1822, and to the simultaneous decrease of nearly six and a half millions in the amount of bullion in its coffers. But a little con sideration will suffice to show the futility of this statement. No issue of notes can be said to be in itself excessive. Whether it is or is not in excess depends upon its relation to the amount of coin and bullion reserved by the issuing bank in its coffers. The Bank of England enlarged its issues disproportionately and took no steps, or none of sufficient energy, to reduce the amount of notes in circula tion till long after the exchange had become unfavourable, and bullion was demanded of it for exportation. The accumulation of securities was the necessary result of this radical error. The currency having become redundant in 1824, the notes of the bank were returned upon it for gold, so that its securities were augmented at the same time that its means of dealing with the unfavourable exchange were impaired. It is to be remembered, that the efflux of bullion showed conclusively that, however issued, and whether greater or less than at former periods, the paper afloat was in excess, and that its reduction had become indispensable. And such being the case, it was the duty of the bank directors, o,s soon as they felt the drain for gold setting steadily against them, to adopt every means in their power, by raising the rate of interest, selling securities, and otherwise, to reduce their issues, and restore 