- E. Thornton,

ART. XI. Chalmers,-Hill,-Bosanquet,-Ricardo,-Atkinson, Rutherford,-Lyne, Cock,-Coutts Trotter,-Fonblanque,-Eliot,-Smith,-Wilson,-Hoare,-Maryatt-on the Report of the Bullion Committee.

SINCE the publication of the Report of the Bullion Committee,

the pamphlets on that subject have been innumerable, but we profess to have found our intellects confused, rather than assisted by these successive attempts to throw new light upon the question. Most of them are on one side. The Bullion Committee, (with which Mr. Huskisson is considered as identified,) is the common enemy, and is attacked from the right and from the left, in the front and in the rear, by a numerous musquetry and by a few light field pieces, but not, so far as we have yet observed, by any artillery of a large calibre. The adversaries indeed do not act much in concert, and hence it occasionally happens, that they pour in their fire upon each other.

It is not our design to review fully any of the works before us, or to touch on all the various parts of this extensive question. Our object is to give the character of several of these publications, to enlarge on a few leading points, and to expose some fundamental and very dangerous errors.

One of the most ponderous of the pieces of ordnance employed on this occasion against the Committee is directed by Mr. CHALMERS, but being somewhat of the mortar kind, it is not pointed with precision; and never hits the citadel. His shells however hiss through the air, and burst in ten thousand strange and most unexpected directions. In plainer words Mr. Chalmers begins in anger, and maintains his rage through his whole 237 pages. He is disposed to quarrel with almost every sentence in the Report. He tells us of a society formed in Paris for the purpose of depriving us of our specie; he sees nothing but the spirit of innovation and jacobinism in the exhortations to return to the ancient and unabrogated law, and to the accustomed standard of our currency. He shews by dint of document after document, that our commerce is prodigiously and progressively increasing, and that we are a nation thriving beyond all example; he treats a little of the balance of trade to which he refers the state of our exchanges, and affirms in language to which we shall hereafter advert, that the Committee are mistaken in supposing that bullion is the foundation of our money sys

tem.

Mr. HILL, on the other hand, begins calmly, but gathers warmth as he proceeds, and is for the most part, as we think, satisfactorily answered by his own statements and admissions. He commences by describing three situations through which a commercial country

may

may be supposed to pass, the stationary, the improving, and the declining, and it is remarkable that he dates our declining state in respect to trade, and in respect to exchanges as the necessary result, from the æra of the suspension of the cash payment of the Bank of England. He differs altogether from the Bullion Committee.You will perceive,' he says, that I attribute the evils so loudly complained of (the rise of the price of bullion and great depression, of exchanges) solely and exclusively to the absolute scarcity of specie and bullion in this country; and that so far from considering this scarcity as the result of an excessive issue of paper, I consider that that issue is the only circumstance which has prevented the scarcity of precious metals from being more severely felt.' (p. 41.) That there are cases,' however, in which a circulating medium not convertible into specie may become excessive, and by excess may occasion a rise in the nominal price of commodities,' he does not as an abstract position take upon him to deny.' We feel curious to know what are those excepted cases in which a nominally high price of commodities may be referred to an excess of paper, and we also should have been gratified if he had enabled us to discover what is the meaning of those words so often used in the course of the present controversy, both by this writer and others, that the doctrine of the Bullion Committee as an abstract position' is not to be denied. The concession is apparently very flattering to that body, and proceeds from a quarter little disposed to compliment them. We are therefore anxious to understand what are the means, by which the wisdom of the doctrine, of these visionary men is to be reconciled with the folly of adopting it.

'

But we have a much stronger admission in the sequel. Mr. Hill having dismissed the price of bullion, is occupied about the balance of trade, and is eager now to shew that a reduction of paper will not improve, nor in any respect alter that balance, a position in which, after some little qualification of it, we should agree. But in order to enforce this wholesome truth, he finds it necessary to assert, and he accordingly does assert most explicitly and unreservedly, that doctrine which he had before but half conceded, by denominating it an abstract position, and which for all present practical purposes he had in the outset of his book most manfully denied. In illustration of his new position, that a diminution of paper will not improve the balance of trade, he puts the supposed case of the 'reduction of the circulating medium to exactly one half of its present amount.' He shews, first, how such a reduction would operate on our internal affairs, namely, by reducing all prices, and then how inoperative it would be in respect to foreign commercial transactions, since these are purely of the nature of barter. It would produce, he plainly says, 'a proportionate reduction in the

Q 2

nominal

nominal price of every species of property. Land, buildings, shipping, merchandize, labour, and every other species of saleable commodities would be reduced in value one half." Indeed! Would a reduction of paper produce this effect on the price of every species of saleable commodities? We beg leave then to remind Mr. Hill that among saleable commodities,' bullion is unquestionably. one. If a reduction in the value of paper would lower the value, in exchange for paper, of manufactures of every kind-of hardware, of broad-cloth, and cotton goods-and of all the produce of the soilof corn, of fruits, and of wines, we presume that it would also lower the value, in exchange for paper, of all the produce of the mines—of iron, of brass, of copper, of silver, and of gold. Thus, according to Mr. Hill's own shewing, a reduction of paper would lower the price of gold. It would produce,' he says, a proportionate reduction.' If therefore bullion should at any time be 20 per cent. higher than paper, (as in fact it now is,) or if 50 per cent. the case put by Mr. Hill, a proportionate diminution of paper would not fail to equalize their value.

Mr. Hill begins to perceive this consequence of his position as he closes his sentence, for he adds, that at first sight it might appear: that this is the most desirable effect which could be produced, as it would enable us to return to the original and salutary principle of a circulating medium always convertible into cash.' Assuredly it. would. The diminution of paper would make the value of paper. rise in proportion to that of bullion. It could not fail, if carried sufficiently far, to cause the tide of bullion to flow into the country instead of flowing out of it, and thus to facilitate the opening of the Bank of England. This result is very plain and obvious. Mr. Hill does not stop to controvert it, but proceeds very contentedly in his inquiry, regardless of the fact, which he appears to have suspected for a moment, that by this admission, he had altogether overturned the fundamental principle of his work. He takes leave of the subject, by remarking, that this reduction,' however, of our paper, which would so evidently,' as he again says, reduce the price of every other kind of property (bullion of course included), would only have the effect' (we complain here most grievously of the ambiguous use of the word only) of raising money proprietors to twice their present height in society.' It would only have this effect!-It would also, he himself admits, enable us to resume our cash payments. But we are not, it seems, to revert to the ancient standard, because the restoration of that standard would disturb that new order of things which our own recent departure from it has occasioned; and one advantage of which is that it has already degraded many proprietors' 20 per cent. below their legitimate height in society.". Mr. Hill allows, that if the Bank Directors are compelled to re

turn

turn to payments in specie, their issues of paper would not fail to be reduced. These being reduced, he has, as we have shewn, admitted that the price of bullion would fall; for he cannot deny it to be a saleable commodity. The fall having reached a certain point, it is clear that the Bank might safely open. Mr. Hill, nevertheless, after speaking of the desirableness of a return to cash payments, once more utterly denies its practicability, and on this point he is not very civil to the committee. Though the committee,' says he, 'have made no hesitation in avowing their opinion, that the Bank should be compelled to resume its payments in specie within two years, they have given themselves no concern whatever about the means by which the Directors shall be enabled to do so.' Have not the committee proposed the limitation of paper as 'the means' to be previously resorted to for the accomplishment of their object? Is not their report full of this suggestion? But Mr. Hill compares their report to the prescription of a company of physicians, who should direct a bed-ridden patient merely to rise up and walk. Undoubtedly, if this comparison were just, the great point of the whole controversy would be settled. On one side it is asserted that the Bank is passive, that it cannot alter the course of exchange; and that the course of exchange and the course of exchange alone produces the price of bullion: on the other, that the Bank is not merely passive, for that the quantity of paper influences the price of commodities, of which bullion is one; and that the price of bullion operates as one cause of the state of exchange, instead of being the effect of it. The Bank indeed, according to the one hypothesis, are like the bed-ridden patient; but according to the other, there is a restorative to which the Bank, not believing in its virtue, (if we may judge from the evidence of the Directors of that establishment,) profess not yet to have resorted, and which they seem unwilling to try unless it be prescribed by the legislature. That the proposed prescription is unpalatable both to the Bank and to the merchants, that, unless cautiously administered, it may produce serious evil, and that some time may elapse before the cure can be perfected, are points freely admitted in the Bullion Report.

We shall enlarge hereafter on this branch of the subject. We would only further suggest at present, that even granting the high price of bullion to be exclusively the effect of the balance of trade, and in no degree referable to an augmentation of paper, the admitted principle of this writer, namely, that a diminution of circulating medium tends to a PROPORTIONATE reduction of the price of all commodities (of bullion among the rest) is a concession which appears to us to dispose of the whole of the case. Be the cause of the high price of bullion what it may, limitation of paper, by effecting a reduction of that price, must operate in the way of Q 3 remedy.

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remedy. Although the Bank, therefore, should not have produced the evil, they can contribute to remove it. They can work that miracle, the very idea of which is to Mr. Hill's mind so inconceivable, They can turn that golden tide which is thought both by him and many others to flow by some necessary law of nature for a given time in a given direction. They can say to the stream,

Xanthe, retro propera versæque recurrite Lymphæ.'

and it will obey them. The word propera may indeed be inapplicable. The current will not instantly run back with vehemence. The impulse which has been given must be mitigated before it can be completely counteracted. That the influence, however, of a reduction of paper, upon the price of all commodities, would be though slow, perfectly sure, is as susceptible of demonstration as any proposition of Euclid.

We must not extend our remarks so far in treating of the other ten or fifteen pamphlets on our table.

Mr. BOSANQUET presents himself as one of the most formidable of the champions against the Bullion Committee, and professes to fight them not with arguments but with facts. Their doctrines, indeed, he despairs of disproving. They are true in theory; or, to recur to the words of Mr. Hill, they are undeniable as 'abstract' principles. What is affirmed by them and others on the same side to be impossible, 'I admit,' says he, 'to be impossible, I only say that I nevertheless find it to be a fact.' Mr. Ricardo has fortunately delivered us from the necessity of endeavouring to reconcile positive facts and admitted impossibilities, by shewing that Mr. Bosanquet had resorted to an erroneous table in one important instance; that the high seignorage in France solved another of the paradoxes which demanded explanation; and that the exchange with America, about which the Committee had been silent, and which Mr. Bosanquet had represented as favorable, was, like all the other exchanges, against this country, and served therefore to confirm the opinion of the Committee respecting the depreciation of our paper. Mr. Bosanquet concludes a new edition of his work by admitting, in substance, that there is no longer any standard of value for our currency, the dividends on our 3 per cents. (which dividends consist in a mere paper payment) being, so far as he can judge, the only criterion of value which remains to us..

From the melancholy reflections excited in our minds by these parting words of Mr. Bosanquet, we turn for relief to the declarations of Mr. JASPER ATKINSON. This author, indeed, a little perplexes, but he at the same time comforts us, for he observes that even a total want of intrinsic value in a national currency has an active tendency to increase exportation.' P. 13,

He