Page:The Real Cause of the High Price of Gold Bullion.djvu/24

 of things in 1810. At that period, it is said, that our taxation had arrived at its greatest height; that prices in general were higher than at present; that the sums levied within the year approached 100 millions; that our taxes are now much diminished; and the general amount of the sums levied for the services of the year diminished much more; that the amount of Bank Notes outstanding was at that period only varying from 22 millions to 24 millions; and that even this sum was considered as excessive and as the cause of the price of Bullion, which was from 4 l. 12 s. to 4 l. 15 s., and also of the fall of Exchanges which were 15 per cent. under par. Whence it is warmly argued, that the subsequent addition of 3 or 4 millions to that sum of currency, is not only an unnecessary, but a pernicious excess.

This appears a very fair and strong statement, and certainly the facts of the statement are true. Whether the inferences are equally true, is another case, and it requires attention.

It was argued in 1810, that the high prices of all articles then existing, the high price of Gold, and the low price of exchanges, were attributable to one only cause, the excess of our paper currency. If that be true, then it follows, that the increase of excess in paper currency would have increased the prices of commodities, advanced the price of Gold, and lowered the exchanges still more; this consequence ought necessarily to have followed if the argument were valid: but the consequence which really has followed, is diametrically the reverse, for in the year 1816 and the beginning of 1817, when the Paper Currency amounted to 27 millions, an amount of nearly 4 millions above the medium amount of currency of 1810,—the prices of commodities were much lowered, the price of Gold fell at one time so low as 3 l. 18 s. 6 d. per ounce, instead of 4 l. 15 s. which it rose to in