Of the country banks in Scotland, it may be re marked, that in most cases they have been establish ed en the security of ample funds; and having con This increased circulation of paper appears to have exceeded the wants of the community, since it was followed by rise in the price of bullion, and by the depression of the exchange. About the year 1804, thia evil had proceeded to such an ex tent, that guineas were openly advertised and sold for a premium of 10 per cent., and the exchange with London was about 17 per cent. against Dublin. From this depreciation of the notes of the national Bank many serious evils arose. The silver currency, which circulated in Ireland, was generally in a debased state, and the intrinsic value of the dif ferent coins was not equal to the value for which they were current. But by the fall which had taken place in the notes of the Bank of Ireland, those de based silver coins became more valuable in the form of bullion than in the form of currency. They 3 were, accordingly, all melted down, • and the com munity being in consequence exposed to the great est inconvenience, their place was supplied in Dub lin and other parts by counterfeits, and in seve ral districts by a paper currency, issued for sums gradually decreasing from- 6s. to 6d., and even to 3d. It is calculated by several persons, who gave evidence before a committee of the House of Commons in 1804, that, about this time, there were dispersed throughout Ireland 295 issuers of this pa per money, chiefly consisting of a motley body of shopkeepers, merchants, and petty-dealers of all de scriptions. The country was inundated with this exceptionable currency, and it was the occasion of such general inconvenience, as well as of such nume rous forgeries and frauds,, that the circulation of notes for such small sums was at length prohibited by law. Notwithstanding the prohibition, those notes still con tinued to circulate, the law was evaded by various contrivances, and the want of a better currency secur ed their circulation. The Bank of Ireland has since made an issue of stamped dollars, which, by supply. ing the wants of trade, has, in a great measure, re medied the evil complained of.
The premium on guineas, which, in 1804, was 10• per cent., has since greatly declined, and the foreign exchanges of Ireland have also become more favour able. In 1808, guineas were exchanged for paper at a premium of 8d., and paper has since risen nearly to par. As the Bank of Ireland has increased, in place of diminishing, its circulation, since 1804, the cause of this rise in the value of paper must be sought for in the retrenchment of the notes of other banks. It appears, accordingly, that the number of provincial banks has, of late years, been veryconsider ably diminished in Ireland, and that of fifty banks which issued notes in the year 1804, not more than nineteen remained in 1812, the others having either failed or withdrawn from business. • The extinction of so large a portion of the currency would necessarily in crease the value of what remained in circulation.
The price of Irish bank-stock has been greatly im proved in value within the last twenty years. The following is an account of its price at different periods: 1798 January 90 per cent.
1799 January 115 1802 January 179 1804 January 140 1810 189 1816 September 214 Dividend on Irish bank-stock at different periods.
1801 6 1803 7 Bonus in 1803 5 1816 10 In France the progress of banking, as of every other domestic improvement, was retarded by convulsions of the revolution. But in the year 1803, when the peace of the continent appeared to be secured, and tranquillity prevailed at home, the differ ent banks in Paris were consolidated into one great national bank, called the Bank of France, by an act of the imperial government. The act establishing this
bank fixed its capital at 45,000,000 francs, equal to L. 1,875,000 Sterling, to be divided into 45,000 shares of 1000 francs each. It was vested with the exclusive privilege of issuing promissory-notes, pay able on demand, in consideration of which, it made large advances to government. Its business was to discount bills of exchange, notes, or bonds ; but it was prohibited from carrying on any commerce, ex cept in cash or bullion. The administration of the Bank of France was committed to fifteen directors and three censors, and to these was added a council of discount, consisting of twelve of the principal merchants in Paris, who were to have the privilege of a vote in all matters relative to the discounting of bills. The great body of the proprietors were re presented by 200 delegates, chosen from among those possessed of the greatest number of shares, who were to meet annually, or oftener if they were required. To this assembly the affairs of the Bank were to be annually submitted, and the members of the council of discount were to state, whether, in granting dis counts, the directors had conformed to the general rules established to regulate their proceedings. These 200 representatives were also to elect the directors, of . whom three, and the censors, of whom one, were to be annually changed. It was provided • that the vidend for the year (1804) should not exceed eight per cent., to be paid half-yearly, and that whatever profit remained should be invested in the public funds, and allowed to accumulate as a fund of reserve against contingencies. The exclusive privileges of the Bank were granted for fifteen years, commencing from the year 1804.
• Under these regulations, the Bank of France com menced its operations; and during the first year of its establishment, its profits amounted to 4,185,937 francs (L. 174,414), being rather more than 12 per cent. upon its original capital. Of this sum, 8 per cent. was divided among the proprietors ; the re mainder was invested in 5 per cent. stock, as a fund of reserve ; and in the following year, the net profit amounted to 4,652,398 francs (L.193,850). In the lat ter part of the year 1805, the Bank of France was con siderably embarrassed by the drain of its specie, which, in 1806, continued to increase with mach rapidity, that the Bank was obliged to suspend its cash payments. Various causes are assigned for tlis catastrophe, which seems to have chiefly originated in the necessity of making large remittances of specie to the armies then engaged in the Austrian war—in the great advances of the Bank to the Government—in the over issue of its notes—and finally, in vague and unfounded alarms which generally prevailed respecting its solvency. Its notes fell from their standard value, and were ex changed at a discount for specie. The exchange with the country of France became at the same time unfavourable to Paris, to the amount of 12 per cent. ; and the Bank having restricted its discounts, several important bankruptcies took place, which tended greatly to increase the general alarm.* After the peace of the Continent was re-established by the treaty of Presburg, the advances made by the Bank to the government were punctually repaid, and pay ments in cash were resumed about the commence .