Having thus communicated the substance of the Re port, we shall venture to make some observations with regard to its accuracy. Without joining in the popular exclamation, that it is the production of theorists, we are of °pillion, that the most correct part of it is the ex position of the principles of money and exchange ; and that, in several other points, it is defective, from an un acquaintance, on the part of the framers, with the prac tice of mercantile business. They have fallen into the urrent error of imagining, that the obligation of cash pay limns once withdrawn, it was in the power of the bank to increase, almost ad libitum, the extent of their circulation. They appear very inadequately impressed with the power of the public to limit the circulation of bank notes, by withholding applications for discount ; a power very happily illustrated by Mr Bosanquct, one of the most ingenious defenders of the bank.* Had the committee been sufficiently aware of this, they would Lave paused before asserting (Report, page 24.) that " the suspension of cash payments had had the effect of committing into the hands of the directors of the bank of England, to be exercised by their sole discretion, the im portant charge of supplying- the country with that quan tity of circulating medium, which is exactly proportion ed to the wants and occasions of the public." Perhaps, also, they would have qualified their encomium on the directors, for their " forbearance. in turning their power less to the profit of the bank than it would easily have ad mitted A" Our next animadversions on the writers of the Bullion Report, t egards their inattention to the strik ing points in the history of our paper currency since the beginning of the war of 1793. No notice is taken of the pecuniary embarrassments of 1795 and 1799 ; nor is any ttempt made to ascertain the causes of the remarkable increase of bank notes subsequently to the latter year. These were not topics of mere curiosity : they bore, as we have endeavoured to spew, a direct resemblance to the unfortunate circumstances of the year 1808. The chain of reasoning supplied by a knowledge of antecedent difficulties, would have led the writers of the Report, by an easy course, to an estimate of the share which our (*X pences in the peninsula, and our importations of corn, have had in our recent difficulties. Perhaps, also, it might have conducted them to a discovery of the evil of a new kind, which we had brought on ourselves, by stopping the American continental trade. To have enu merated, and made allowances for the operation of those powerful causes, would have car•ied conviction to the minds of the mercantile community, and have disarmed their opponents of their most efficient weapons. Enough would still have remained to substantiate the charge of depreciation, and to justify the argument, that had our paper been convertible into cash, the disorder in the ex change would have been neither so great nor so perma nent. But as the Report stands, uo notice is taken of the increase of our foreign expenditure in 1868 ; uei refer ence is made to the demo lent !tamest of 1809 ; and the American trade, though alluded to in the e%idence of their favourite witnesses, (./mcm/ix, p. 78, 130, 1 11.) is allowed to pass unnoticed the committee. An at knowledgment, indeed, is made (Ref,ort, p. 16.) of the influence of political and omnivrcial causes, hut it is couched in general terms, and the topic is forthwith ex changed liar an argument on the degradation of paper.
We have already mentioned, that the fourth division of the Report, which treats of country banks, is particu larly liable to animadversion. 'Without dwelling on the errors in the attempt to ascertain (p. 29.) the increase of their circulation, we shall confine ourselves to the consi deration of a general position, taken from Air Thoruton's book on paper money, and couched (Rej)6rt, p. 28.) in very prepossessing terms. " If an CNC(1,6 of paper be issued in a country district, while the London circula tion does not exceed its due proportion, there will be a local rise of prices in that country district, but prices in London will remain as before. Those who have tl.e country paper in their hands, will prefer buying in Lon don where things are cheaper, and will, therefore, re turn that country paper on the banker who issued it." The error of this argument lies in supposing, that the London market forms a direct check on the country mar kets, as if the commodities purchased in the one, were not, in general, quite different from those of the other. In the metropolis, imported merchandise forms the great article of sale ; in the country towns, the produce of the land, and the local manufactures. The check on the over-issue of paper must arise from very different sources, and will be found to consist fundamentally in the obliga tion to pay interest ; a sacrifice which no man will incur without cause. Another and a more serious fault in this part of the Report, consists in the loose manner in which the great rise in the price of commodities is charged on our paper currency. The committee dwell largely out
the magnitude of the evil, without attempting precision in regard to the share which the over-issue of paper may have had in it. From this ague mode of expression, the public arc led to infer, that the unfortunate rise of our commodities might have been produced by the conduct of the bank, although neither new taxes nor new corn laws had been in existence. Now we have no hesitation in attributing a part of the rise to over-issue of paper ; but, on resorting to the ordeal of close calcuLtion, e find that part much smaller than is generally believed. If to the depreciation of three per cent. which has lasted since 1800, we add six or seven per cent. for the over issue of the last three y cars, (and more we cannot think applicable to our home transactions, whatever may be the case as to our foreign,) we set down in all an enhance ment of ten per cent. to charge of our paper currency. But the total rise in the price of commodities since the hank suspension of 1797, exceeds, as is well known, sixty per cent., leaving five-sixths of the burden to be otherw ise accounted for. In another and a more extended point of view, we should have little difficulty in bring ing an additional part of the charge against paper money. War is the great cause of the rise of prices; and the aid of paper money, pc rhaps the exemption of the bank from cash payments, may be pronounced one of the prin cipal reasons why we are not now at peace. But such is not the meaning of the bullion committee. They make no reference to the rise of prices produced by the use of paper money ; their business is with the abuse of it ; and there, we cannot help thinking, they have over-rated the extent of the effect.
It would have been desirable also, that the bullion com mittee, in urging the pernicious effect of our paper cur rency on the exchange, had more clearly distinguished between non-convertibility and over-issue. In the first and more accurate part of the Report, the non-converti bility of our paper into cash, engages a share of their at tention, which seems to be afterwards lost amidst their extraordinary calculations of over-issue. It has unfortu nately happened, that several of the writers who have followed on the same side have laid the chief stress on the latter ; excess of quantity being, as Mr Burke said of force, one of the apparent means most likely to arrest the belief of superficial inquirers. To these animad versions on the Report, it is proper to add, that it is rather an able exposition of the doctrines of others, than an original work ; a remark in which those to whom Dr Smith's book, Henry Thornton's Inquiry, and the Thoughts on the Restriction Bill by Lord King, are fami liar, will have no hesitation in joining. Yet, in spite of all these deductions, the Report of the Bullion Com mittee is entitled to great consideration. It affords an example of what we have long wanted in this country, the application of the principles of political economy to the practice of trade. It is the fruit of close thinking and wide research, and its errors are chiefly to be ascribed to the singular complexity of a subject, a knowledge of which would appear the task of years rather than of months. If we make allowance for the impressions, in several respects exaggerated, under which it was writ ten, we shall find reason to praise its moderation, parti cularly when put in contact with the positive and abso lute language of other productions. We shall conclude our remarks on it by desiring those to whom this quali fied encomium may seem too favourable, to compare it with the hasty statements and meagre reasoning which so often characterize the labours of other parliamentary coin If we direct our attention to the principal writers who have appeared on this most fertile or topics, we find in Iluskisson a great deal of anxiety to make the public thoroughly acquainted with the merits of the question ; in his antagonist Bosanquet, strong evidence of acute ness, unaccompanied, however, by an adequate know ledge of general principles ; in Ricardo, accuracy and promptitude in calculation. Among toe lesser tracts, Jasper Atkinson's Letter to a "Alember of Parliament, °mains a clear and temperate argument against the Bullion Report ; while \Vilson's Observations on the Depreciation of our Currency, will remove the doubts of the few who question the impoliey of our corn-law s. In CaLning's printed speech, the reader admires more a display of oratory, than a knowledge of the subject ; while that of Mr George Johnstone claims 'attention for polished language, as well as for perspicuous illustration. I Id who desires to acquire a know ledge of the intricate subjeet of exchange, will do well to study the publication of Blake ; and all instructive example of the causes of a bank stoppage w ill be found in the official report of Du pont de Nemours on the embarrassments of the Banque de France iu 1806.