rapidly increase; or in other words, you have, day after day, seen less and less of gold and silver appear in payments, and of course more and more of papermoney. But it was not till the year 1797 that the paper-money began to increase so very first. It was then that the two and one pound notes were first made by the Bank of England. It was then, in short, that paper-money became completely predominant. But, you will naturally ask me, "What was the cause of that?" The cause was, that the Bank of England stopped paying its notes in gold and silver. What! stop paying its notes? Refuse to pay its promissory notes? The Bank of England, when its notes were presented, refused to pay them? Yes: and what is more, an Act of Parliament brought in by Pitt, was passed to protect the Bank of England against the legal consequences of such refusal. So that the people, who held promissory notes of the Bank, and who had perhaps given gold or silver for them, when they went

try, is notorious to all the world. But years, seen the quantity of paper-money while we are all acquainted with the fact, and while many of us are most sensibly feeling the effects, scarcely a man amongst us takes the trouble to inquire into the cause; yet, unless the cause be ascertained, how are we to apply or to judge of a remedy! We see the country abounding with papermoney; we see every man's hand full of it; we frequently talk of it as a strange thing, and a great evil; but never do we inquire into the cause of it. There are few of you who cannot remember the time, when there was scarcely ever seen a bank-note among tradesmen and farmers. I can remember when this was the case; and when the farmers in my country hardly ever saw a bank-note, except when they sold their hops at Weyhill fair. People in those days used to carry little bags to put their money in, instead of the pasteboard or leather cases that they now carry. If you look back, and take a little time to think, you will trace the gradual increase of paper-money, and the like decrease of gold and silver mo-to the Bank for payment, were told, ney. At first there were no bank-notes under twenty pounds; next they came to fifteen pounds; next to ten pounds: at the beginning of the last war, they came to five pounds; and before the end of it, they came down to two and to one pounds. How long it will be before they come down to parts of a pound, it would, perhaps, be difficult to say; but in Kent, at least, there are country notes in circulation to an amount so low as that of seven shillings. It is the cause of this that is interesting to us; the cause of this change in our money, and in the prices of goods of all sorts and of labour. All of you who are forty years of age can remember when the price of the gallon loaf used to be about ten pence or a shilling, instead of two shillings and sixpence or two shillings and ten-pence, as it now is. These effects strike you. You talk of then every day; but the cause of them you seldom if ever either talk or think of: and it is to this cause that I am now endeavouring to draw your attention. You have, during the last seventeen this, and when we come to examine

that they could have no gold or silver, but that they might have other notes, more paper, if they pleased, in exchange for the paper they held in their hands and tendered for payment. From that time to this, the Act of Parliament, authorising the Bank of England to refuse to pay its notes in gold and silver, has been in force. At first it was passed for three months; next, till the Parliament should meet again; then it was to last to the end of the war; then, when peace came, it was continued just for a year, till things should be settled; then, as things were not quite settled, it was continued till Parliament should meet again; and, as this present war had begun by that time, the Act was made to continue till six months after the next peace.

The reasons given upon the different occasions, it will be very material to notice: for it is this stoppage in the payment of gold and silver at the Bank of England upon which the whole question turns. Everything hangs upon

that part of the report which treats of son satisfactorily upon the means of the Bank's reviving its payments in bringing gold and silver back again into gold and silver, we shall find it of great circulation. use to us to recur to the reasons, the divers, the manifold reasons, that were given at different times for suspending those payments. Since that suspension took place, you have seen the gold and silver disappear; you have seen the paper has supplied the place of gold; paper-money makers have set up all over the kingdom; and might not this well happen, when, to pay paper-money, nothing more than paper-money was required? But the reasons given for this measure of suspension; the reasons given for the passing of an Act of Parliament to protect the Bank of England against the demands of its creditors are seldom recurred to, though, as you will presently see, without recurring to those reasons, and without ascertaining the true cause of the passing of that Act of Parliament, we cannot form so good a judgment relative to the remedy now proposed; namely, that of the Bank of England's reviving its payments in gold and silver. This is the remedy which the bullion committee propose; and, you will say, a very good remedy it is; a very good remedy indeed; for people who have, for so long a time, not paid their notes in gold and silver, to begin to pay their notes in gold and silver, is a very good remedy; but the thing to ascertain, is, can the remedy be applied? This is the question for us to discuss. It required nobody to tell us, that paying in gold and silver would be an effectual remedy for the evils arising from not paying in gold and silver; but, it required much more than I have yet heard to convince me, that to pay again in gold and silver was possible.

Some people suppose, that paper always made a part of the currency, or common money, of England. They seem to regard the Bank of England as being as old as the Church of England, at least, and some of them appear to have full as much veneration for it. The truth is, however, that the Bank of England is a mere human institution, arising out of causes having nothing miraculous, or supernatural, about them; and that both the institution and the agents who carry it on, are as mortal as any other thing and any other men, in this or in any other country. THE Bank, as it is called, had its origin in the year 1694, that is, a hundred and sixteen years ago; and it arose thus: the then King, WILLIAM III., who had come from Holland, had begun a war against France, and, wanting money to carry it on, an act was passed (which act was the 20th of the 5th year of his reign) to invite people to make voluntary advances to the Government of the sum of 1,500,000 pounds, and for securing the payment of the interest, and also for securing the re-payment of the principal, taxes were laid upon beer, ale, and other liquors. Upon condition of 1,200,000l. of this money being advanced within a certain time, the subscribers to the loan were to be incorporated; and, as the money was advanced in due time, the incorporation took place, and the lenders of the money were formed into a trading company, called, "THE GOVERNOR AND COMPANY OF THE BANK OF ENGLAND." Out of this, and other sums borrowed by the Government in the way of mortgage upon the taxes, there grew up a thing called the Stocks, or the Funds (of which we will speak hereafter); but the Bank Company remained under its

The chief object of our inquiries being this: Whether it be possible, without a total destruction of the paper-money system, to restore gold and silver to cir-primitive name, and as the debt of the culation amongst us; this being the nation increased, this Company increased chief object of our inquiries, we should in riches and in consequence. first ascertain how the gold and silver Thus, you see, and it is well worthy were driven out of circulation, and had of your attention, the Bank had its rise their place supplied by paper-money; for, in war and taxation. But, we must unless we get at a clear view of this, it reserve reflections of this sort for other will be next to impossible for us to rea-occasions, and go on with our inquiries

how gold and silver have been driven out of circulation in this country, or in other words, how it came to pass that so much paper-money got afloat.

these opinions of the people, relative to the Bank, were not altogether unfounded; for, though no bit of paper, or of anything which has no value in itself, The Act of Parliament which I have can be, in fact, so good as a bit of gold: just referred to, points out the manner still, if it will at any moment whenever in which the Bank Company shall carry the holder pleases, bring him gold and on their trade, and the articles in which silver to the amount written upon it, it they shall trade, allowing them, amongst is very nearly as good as gold and silother things, to trade in gold, silver, ver; and, at the time of which we are bills of exchange, and other things, speaking, this was the case with the under certain restrictions; but, as to promissory notes of the Bank Company. what are called bank-notes, the company But it must be evident, that though the was not empowered to issue any such in Company were ready at the time now any other why, or upon any other foot-referred to, to pay their notes in gold ing, than merely as promissory notes, and silver, they had never in their for the amount of which, in the coin of money-chests a sufficiency of gold and the country, they were liable to be sued silver to pay off all their notes, if they and arrested. Having, however, a had been presented all at once. This greater credit than any other individuals, must be evident to every man; because or company of individuals, the Bank if the Bank Company kept locked up as Company issued notes to a greater much gold and silver as their notes amount; and, which was something new amounted to, they could get nothing by in England, they were made payable, issuing their notes, and might full as not to any particular person, or his well have sent out their gold and silver. order, and not at any particular time; | A farmer, for instance, who is generally but to the bearer, and on demand. These using a hundred pounds of money to characteristics, which distinguished the pay his workmen, might lend the hunpromissory notes of the Bank of Eng-dred pounds and get interest for it, if he land from all other promissory notes, could persuade his workmen to take gave the people greater confidence in promissory notes of his own drawing them; and, as the Bank Company were instead of money, and, if he were sure always ready to pay the notes in gold that these promissory notes would not and silver, when presented for payment be brought in for payment; but if this the notes hecame in time to be looked was not the case, he would be comupon as being as good as gold and silver.pelled to keep the hundred pounds in Hence came our country sayings:-" As his drawer ready to give to those who good as the Bank.” "As solid as the did not like to keep his promissory Bank:" and the like. Yet the Bank was, notes and, in such case, it is clear, as we have seen, merely a company of that the money would be of no use to mortal men, formed into an association him, and that he might full as well of traders; and their notes nothing more have none of his notes out. than written promises to pay the bearer so much money in gold or silver.

Just so with the Bank Company, who, at no time, could have in hand We used to have other sayings about gold and silver enough to pay off all the Bank, such as "As rich as the their notes at once; nor was this necesBank;""All the gold in the Bank;" and such like, always conveying a notion, that the Bank was a place, and a place, too, where there were great heaps of money. As long as the Company were ready and willing to pay, and did actually pay, their notes in gold and silver to all those persons who wished to have gold and silver, it is clear that

sary as long as the people regarded those notes as being equally good with gold and silver. But it is clear, that this opinion of the goodness of the Company's notes, or rather, the feeling of confidence, or, still more properly perhaps, the absence of all suspicion with respect to them, must, in a great degree, depend upon the quantity of notes seen

to be supposed, that people could have the same opinion of bank-notes that they formerly had. Every part of the people, except the very poorest of them, now, occasionally at least, possessed bank-notes.

Rents, salaries, yearly wages, all sums above five pounds, were now paid in bank-notes; and, the Government itself was now paid its taxes in this same sort of currency.

in circulation compared with the quan- inquire into the cause of the coin's not tity of gold and silver seen in circulation. increasing with the increase of paper, At first, the quantity of notes was very suffice it to say, that such was the fact. small indeed; the increase of this quan- Year after year we saw more of banktity was, for the first twenty years, very notes and less of gold and silver; till, slow; and, though it became more in time, such was the quantity of bankrapid in the next twenty years, the notes required to meet the purposes of quantity does not appear to have been gold and silver in the payment of the large till the war which took place in interest of the still-increasing debt, and 1755, before which time the Bank Com- in the payment of the taxes, that many pany put out no notes under twenty other banks were opened, and they also pounds in amount. Then it was that issued their promissory notes. The they began to put out fifteen-pound Bank Company's notes, which had notes, and afterwards, but during the never before been made for less sums same war, ten-pound notes. During all than ten pounds, were, soon after the this time, loans, in every war, had been beginning of PITT's war, in 1793, issued made by the Government. That is to for five pounds, after which it was not say, the Government had borrowed money of individuals, in the same way as above-mentioned, in the year 1694. The money thus borrowed was never paid off, but was suffered to remain at interest, and was, as it is now, called the NATIONAL DEBT, the interest upon which is annually paid out of the taxes raised upon the people. As this debt went on increasing, the bank-notes went on increasing, as indeed it is evi- In such a state of things it was quite dent they must, seeing that the interest impossible that people should not begin of the debt was, as it still is and must to perceive that gold and silver were be, paid in bank-notes. Why not pay better than bank-notes; and that they it in gold? should not be more desirous of possesIt is not simply the quantity of bank-sing the former than the latter; and, notes that are put into circulation, the moment this is the case, the bankwhich will excite alarm as to their so- ing system must begin to tremble; for, lidity; but it is that quantity, if it be as the notes are payable to the bearer, great, compared with the quantity of and payable on demand, it is very gold and silver seen in circulation. If, certain that no man, with such a preas the bank-notes increased, the circu- ference in his mind, will keep in his lating gold and silver had increased in possession a bank-note, unless we can the same proportion; then, indeed, suppose a man so absurd as to keep a bank-notes would still have retained thing, of the goodness of which he has a their usual credit: people would still suspicion, while, for merely opening his have had the same confidence in them. mouth or stretching forth his hand, he But this could not be. From the na- can exchange it for a thing of the same ture of things it could not be. The nominal value, and of the goodness of cause of the increase of the bank-notes, which it is impossible for him or any was, the increase of the interest upon one else to entertain any suspicion. the National Debt; and, as it grew out" Public credit," as it has been called, of an operation occasioned by poverty, but, as it may more properly be called, it would have been strange indeed had" The credit of bank-notes," has been it been accompanied with a circum- emphatically denominated, "SUSPICION stance which would have been an ASLEEP." In the midst of events like infallible indication of riches. those of 1793 and the years immediately Without, however, stopping here to succeeding; in the midst of circum

stances like those above-mentioned, | commonly used. As in the instance of relating to the bank-notes, it was im- Shrove Tuesday or Shrovetide, words possible that SUSPICION should sleep which we all, from the oldest to the any longer. The putting forth of the youngest, make use of; but as to their five-pound bank-notes appears to have meaning, we content ourselves with roused it, and, in the month of February, supposing (or appearing to suppose), 1797, it became broad awake. The that they contain a commandment for stoppage of payment on the part of the us to cat fritters and pancakes, and to Bank Company was the immediate con- murder poor unoffending cocks; whereas sequence; but, a particular account of they mean the Tuesday, or the time that important event, which totally for going to confess our sins to, and to changed the nature of all our money get absolution from, the Priests; to transactions, and which will, in the end, shrive, being a word equal in meaning produce, in all human probability, effects to to confess, and shrove to confessed; of the most serious nature, must be the and the use of them in the case subject of a future letter. In the mean here mentioned having been handed while I am,

Your Friend,

WM. COBBETT.

State Prison, Newgate, Thursday, 30th August, 1810.

LETTER II.

GENTLEMEN,-Having, in the foregoing letter, taken a sketch of the history of the Bank of England, and of its notes, from their origin down to the time when that Bank stopped paying its notes in gold and silver, the next thing to do in our regular course of proceeding, will be to inquire into, and clearly ascertain, the cause of that stoppage; for it is very evident, that without ascertaining this cause, we shall not be able to come to anything like a decided opinion with regard to our main ques tion, namely, WHETHER THERE BE ANY PROBABILITY THAT THIS BANK WILL BE ABLE TO RETURN TO THEIR PAYMENTS IN GOLD AND SILVER, in which question every man of us, from the highest to the lowest, is so deeply interested.

down to us from the days of our forefathers when the Catholic worship was. the worship of the country.

Monstrous, however, as is the perversion of the meaning of words, in this instance, it is scarcely more so than in the case of the Funds and the National Debt; but, there is this very important difference in the two cases; that, while, in the former, the perversion is attended with no mischief either to individuals, or to the nation, in the latter it is at tended with great mischief to both; with the ruin and misery of many a thousand of widows and orphans, and with woes unnumbered to the nation at large. But, if a right understanding of the meaning of these words be, in all cases where words are used, of some consequence, it is of peculiar consequence here, where, as may have been gathered from the preceding letter, we shall find the Funds, the Stocks, and the National Debt, to be so closely interwoven with the Bank Notes, as to be quite inseparable therefrom in every possible state or stage of their existence.

The word FUND means, a quantity But it is necessary for us to stop a of money put or collected together. The little where we are, and not go on any word STOCK, as applied to such matfurther with our inquiries into the cause ters, has the same meaning. Both of the stoppage at the Bank of England, words may admit of meanings someuntil we have taken time to look a little what different from this; but this is the at the FUNDS and the NATIONAL meaning which plain men commonly DEBT. These are words which are give to these words; and it is, too, the frequently made use of; but, like many fair and sensible meaning of them. other words, they stand for things which Now, we shall presently see, in what are little understood, and the less, per-degree this meaning belongs to what haps, because the words are so very are commonly called the Funds, or the