it looked like a special interference of Providence. Its causes were by no means understood or appreciated. The Houses of Parliament, led by these guides, jumped at once to a conclusion. They forgot that even the reduction in quantity of the circulating paper, which was ancillary to the fall in the prices of bullion, might be said to have bought that reduction at the price of universal calamity. They did not take into account the other, and even more important fact, that this reduction was, in part, the fruit of an unnatural accumulation, in the hands of the dealers, of bullion, forced thither by a long-continued highlyfavourable state of the exchanges and balance of trade. This fact they overlooked. The enormous recoil in the money values, of not only commodities but also land, they were content to ascribe to some mystical effect of a transition from a state of war to one of peace.' The price of bullion was made to solve every difficulty; and upon a calculation of this sort, the great majority of both houses were persuaded to believe that a return to cash payments would not involve a reduction (further) in prices of more than three or four per cent.

It is not permitted us to look into the bosoms or to scrutinize the hearts of men. It is impossible to affirm, therefore, that though they assented to the assertions so confidently, but so rashly, ventured on this occasion, the Houses fully believed those assertions. That the landed interests did not pin their faith, at all events, upon them, is clear in the step which they took. Alarmed by the sudden reduction which, on the close of the war, took place in the prices of all agricultural produce-a reduction which they ascribed to the transition from war to peace; and alarmed by the immediate importations of provisions, of all sorts, which were beginning to be made from France and from Belgium and Holland; they passed, by their influence, a corn bill, the object of which was to shut the ports against grain, until the average price of wheat should turn the limit of eighty shillings the quarter. Having thus, as they imagined, secured an average price of eighty shillings the quarter for wheat, they gave, as to other matters, full scope, generally speaking, to the political economists, having thus exempted themselves, as they fondly believed, from the consequences of any mistake. Mr. Horner, the original chairman of the bullion committee, which, in 1810, had asserted the depreciation of the paper currency, was now dead. The economists had, however, an ally of overpowering influence in the person of Mr. Huskisson, a man of great plausibility, considerable information, consummate tact, and cautious disposition. He was, on such subjects, all powerful with Lord Liverpool, the head of the ministry of that day;

and to him, rather than to Mr. Peel, whose name it bears, may really be ascribed the celebrated currency bill of 1819, since known as 'Peel's Bill.' With him was associated in habits of thought, though not in official station, Mr. Ricardo; and to the sweet counsel' which they took together,' this much controverted measure indubitably owes its origin.

6

Various accidental circumstances delayed the passing of the currency bill until 1819; the interval was filled by the same depression of prices and commercial difficulty that signalized its commencement. An issue of sovereigns was prematurely made by the Bank directors, who now saw that the return to cash payments was inevitable; but this being accompanied or followed by some expansion in the issue of paper, the prices of bullion immediately rose, and the coin began to disappear. These issues being again curtailed towards the period of 1819, the prices of bullion went down again, and continued at about the Mint prices until the completion of the measure of 1819. This celebrated bill provided for a gradual return to cash payments, by issuing gold, in the first instance, at four pounds per ounce. On the 1st of May, 1823, however, gold coin was to be issued at the present Mint price of £3 17s. 10d. the ounce. All Bank notes for sums under five pounds were to be withdrawn, and the Bank was required to publish on every quarter, until May, 1823, an account of its average circulation. The act also repealed all penalties for exporting or melting the coin of the realm.

Our readers must not suppose that this measure was passed without being remonstrated against by various persons, both within and without the walls of parliament. In the House of Peers, Earl Grey expressed his doubts both of the justice and expediency of the measure. In the House of Commons, the Bank directors expressed strong fears as to the effect upon the country; and the bill was strongly opposed by Mr. Western and Mr. Matthias Attwood, especially by the latter, who deprecated it to the very last. Out of the House it was condemned by a writer whose extreme opinions on other subjects prevented his obtaining that attention, as to this, which his great talents must have otherwise commanded-the late Mr. Cobbett; and by some others. This opposition was totally ineffectual, however, and the act was adopted by the unanimous vote of the Commons present.

The Rubicon was now passed. The bankers, and others directly interested in the trade of dealing in paper securities, were now to provide, in good earnest, against the advent of the new monetary era: and they did so, by reducing on all hands the paper circulation of the country to a still lower ebb. The consequences were not tardy in manifesting themselves. It could not be other

wise; for if we contrast the circulation of the Bank of England, towards the conclusion of hostilities in 1815, with its amount in 1819, and again in 1822, the contraction is enormous; and as the remainder of the circulating paper in the country was mainly governed by that of the Bank, the assured consequences of such a position of affairs cannot be conceived to be other than certain and inevitable. In February 1815, the circulation of the Bank of England was no less than £27,261,650. In February 1819, it was £25,126,700; and in February 1822, it was reduced to £18,392,240; being a reduction of one third of the whole of its circulation. In 1815, the Bank held of private bills, under discount, not less than twenty millions in amount. In 1822, the private bills discounted by the Bank were only, in amount, £3,494,000! The effect upon prices was in accordance with this unsparing contraction of the circulating medium and denial of accommodation to trade. In the January of 1819, wheat was on the average seventy-three shillings per quarter, and beef and mutton five shillings per stone. In the January of 1820, wheat was sixty-two shillings per quarter, and meat three shillings and four-pence per stone. In January 1821, wheat had declined to fifty-one shillings per quarter, and meat to three shillings per stone; and in January 1822, wheat had fallen to forty-eight shillings per quarter, and beef and mutton to two shillings and two-pence per stone. In other commodities, the decline was commensurate, allowance being made on such as were directly taxed. The effect of this could neither be evaded nor hidden. That effect was the same as if the statute measures, after a long diminution, had on a sudden mysteriously recovered their dimensions. Men who had, or thought they had, a hundred yards of cloth, all at once felt as if they had only fifty. Men who reckoned upon a hundred bushels of wheat, found, on a sudden, that the hundred was only half a hundred. In other words, the hundred yards of cloth, when sold, only sufficed to take up the bill that fifty would have done before; and the hundred bushels of wheat now only discharged that rent which before absorbed only half the quantity. The effects of this upon agriculture and trade could be only of one sort. As profits fell, the wages of labour were reduced. As profits and wages shrank into a less amount, the home demand for farm produce, and for the fabrics of the loom or anvil, shrank along with them. It became absolutely necessary to increase, if possible, the foreign outlets for manufactures, in order that markets abroad might take that surplusage of goods which the home consumption would no longer move: and this at last led to those acts, and those treaties arising out of them, which are known by the name of

4

reciprocity treaties,' and which only exist by the abandonment of that famous code, so long known as the navigation laws.' When these laws were enacted, foreign countries were, in fact, more dependent upon England than she was upon them. A manufacturing population, growing with an unnatural rapidity, in the midst of accumulating privations, were to be now fed by assistance from abroad. Foreign customers were to be had; and the price was to be paid by which, it was now found, they were alone to be obtained.

Amongst the landed interest, both in and out of parliament, the position at which prices had now arrived caused an intense excitement. By the recoil, numbers of persons, all over the country, who had mortgaged their estates, were totally ruined, the proceeds of the land, in numerous instances, barely sufficing to pay the interest of the mortgagee. In trade, all was stagnation, though the commercial pressure was by no means commensurate with that upon the land. Consequently, excepting by the ministers and their immediate adherents, no great resistance was offered to the effort which was now made to compel the Government to retrace those steps, into which the councils of the economists had led it. This effort was made by Mr. Western, a clever and influential member of the great body of parliamentary landlords. He moved for inquiry into the state of agriculture, and into the connexion between that state and the recent monetary changes. He was supported by a strong party. His reasonings were exceedingly powerful. His motion for a committee could not be evaded, nor could it be met without some giving way on the part of the Government. The result was, that, in order to neutralize the certain consequences of the committee of Mr. Western, a bill was introduced and hastily passed, the purpose of which was to respite (as the movers thought) the circulation of the notes for one and two pounds for eleven years more, leaving all the other enactments of the Currency Act of 1819 unmodified and untouched. The act of 1819 had provided for the extinction of these notes upon a calculation, which was well founded, that without their aid, the issues of

paper could not be kept afloat in any such excess as materially to depreciate the currency in future. The repeal of this portion left the currency at the mercy of the bankers, whose gains were made by those issues, at the same time that it left them liable to pay all their notes on demand, in gold and silver.

Whatever might be the actual intentions of those who proposed and passed this measure, it is certain that, by the country at large, it was believed not to be a mere respite, but a reprieve for

all time of the small-note currency; nor was the public undeceived by the conduct of the Bank of England, the directors of which declined to avail themselves of the power of continuing their circulation of notes for sums under five pounds. This power was, however, eagerly caught at by the country bankers, to whom the measure of their extinction had always been distasteful; and they were pushed out again with more rapidity than they had been drawn in. The effects were not long in showing themselves. A rise of prices commenced, beginning with one or two articles, and gradually extending itself to all. To the few who understood the matter, the phenomena which attended this rise proved incontestibly that it was the mere effect of the depreciation of the whole mass of the currency, arising out of a new plethora or over-issue of bank paper. In some articles, the relation of supply to demand was at first such that the advance was legitimate, without reference to any action upon the currency by over-issue; but when this advance became so universal, that, to use the words of Mr. Tooke, in his account of the transactions of that periodif any one inquired for what reason any particular article had! risen, the common answer was-everything else had risen, and! therefore this ought to rise!' When this came to be the case,. there could be no doubt in the mind of any man, who was cognizant of the effects of a rapid addition to the circulating money of a country, as to the real nature of this extraordinary advance.. To the nation at large, however, including the Ministers of the Crown, it bore the appearance of some mysterious influx of a. sudden prosperity, and for such it was taken. Nor was this unnatural. Whatsoever men touched, seemed, through the agency of the continual upward march of prices, to turn to money in their hands; and of the actual cause of this they had not the slightest idea. Wheat, which at the Christmas of 1822 was at the low average price of forty shillings per quarter, continued to advance, until, in the spring of 1825, it averaged sixty-eight shillings per quarter. The enhancement in the price of other commodities was in a proportion not very dissimilar; and this at last begot a spirit of speculation and gambling in the nation, which had not perhaps been equalled since the famous South Sea' era. The American colonies of Spain had been acknowledged as independent States; and hence the larger portion of the speculations ran upon working American mines, and loans to the newly-created Republics. Between 1822 and 1825 inclusive, no less than twenty-six foreign loans were negotiated. The entire sum lent was little short of sixty millions sterling; and when we state that of these only ten are now paying dividends, the nature of the speculations are apparent enough. Of the other