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capital, employed in manufactures, is enabled to avail itself of local situations and natural advantages (for instance, a stream or a coalmine,) and to adapt itself, exclusively, to those pursuits, in which, from any peculiar disposition, dexterity, ingenuity, or fortuitous dis covery, the people of any parricular country or any particular part of them may excel. The advantage derived from the division of labour is well known. What is effected by the operation of that principle for a single undertaking is, by the aid of commerce, effected for the whole world. Commerce enables the population of each separate district to make the most of its peculiar advantages, whether derived from nature or acquired by the application of industry, talent, and capital;-to make the most of them for its own consumption, leaving at the same time the greatest possible remainder to be given in exchange for any other commodities produced more easily, more abundantly, or of better quality, in other districts of the world. It is thus that a country is enriched by commerce.
Apply this, for example, to England. Much is required for the subsistence, much for the comfort, much for the enjoyments and luxury, of the people of this country. Now, if we could not, or, by a mistaken policy, would not, procure salt meat from Ireland; a country, in which, we will assume, that, from its superior pasture, one acre will feed as many cattle as can be fed upon two in this country; it is obvious that, if we still wanted to consume the same quantity of meat, a larger portion of our soil must be allotted to pasture. - Consequently, we should have less of corn, hops, or some other article of our present growth. In the same way, if we had resolved, that, instead of importing sugar, we would make it from beet-root, the sweet maple-tree, or any other vegetables which could be raised in this climate, we should be obliged to allot a great portion of our soil to their growth; and, after all, we should have very little sugar; and we should have much less of other produce than we now have, together with an abundant supply of sugar. The same observation will apply to hemp, or to any other article principally imported from other countries. Every addition to the productions of a country, whether ultimately consumed at home or not, adds equally to its means of commercial exchange with other countries, To improve agriculture, therefore, is to extend commerce: and every new channel opened to the latter, affords additional encouragement to the former. It is thus that they both contribute to the wealth of a country; and that the improvement of that wealth is most effectually consulted by leaving to every part of the world to raise those productions for which its soil and climate are best adapted.'
In this country, our parliamentary proceedings, our publick documents, and the works of several able and popular writers, have combined to propagate the impression that we are indebted for much of our riches to what is called the balance of trade. This impression, which has spread through Europe, has contributed, not a little, every where, to suggest the imposition of unnecessary restraints upon trade, and perhaps to render acceptable for a time, even to the nations whọ were suffering from it, the wild attempt to exclude British commerce from the continent. The jealousy, which our general prosperity creates,
is enhanced by a notion that it is altogether the effect of our commerce. Whilst our merchants are individually reputed pre-eminent for good faith and fair dealing, the opinion entertained of us as a nation is, that we are little short of sharpers in trade; and that whatever we gain by it is so much lost to those who deal with us. — - For the countenance given to this opinion, prejudicial to every country but not least so to ourselves, we have, I think, more to answer than the most envious of our neighbours. Our true policy would surely be to profess, as the object and guide of our commercial system, that which every man, who has studied the subject, must know to be the true principle of commerce; - the interchange of reciprocal and equivalent benefit. We may rest assured that it is not in the nature of commerce to enrich one party at the expense of the other. This is a purpose at which, if it were practicable, we ought not to aim; and which, if we aimed at it, we could not accomplish. Let us not then disclaim a virtue which we perforce must practise.'
If the observations which we have quoted be so familiar to many of our readers as to require some apology for introducing them, a very different opinion will be formed of what we are now going to mention. The Bank has lent in late years, as is well known, six millions to government, and receives interest on a part only of that sum: the difference between which and the full rate of interest, or, in other words, the sacrifice made by the Bank every year during which the contract lasts, is 210,000l. Government likewise makes a daily payment of the Exchequer receipts into the Bank, and keeps an account of draft and deposit with the Bank, nearly in the same mode as that which is followed by a merchant with a banker. Of all this we were previously aware: but that which we did not know, and which the public are much indebted to Mr. Huskisson for disclosing, is that the average balance of governmentmoney in the hands of the Bank amounts to ten millions sterling ; and it is altogether in consideration of this large deposit that the Bank makes the yearly sacrifice of 210,000l. The profit derived from the suspension of cash-payments, large as it is, has been reaped wholly by the Bank; the public having neither participated in it, nor received any consideration for abstaining from interference. We have great pleasure in laying before our readers the passage in Mr. Huskisson's pamphlet which contains this valuable information. It is introduced by a reference to the circumstance of the suspension-act being a temporary measure.
I trust,' says Mr. H. there is no doubt of this fact, but I am sorry to see that the Bank Proprietors (if their sentiments can be collected from the report of their proceedings at their last general meeting) entertain a different expectation. An uninformed stranger, from reading the account of these proceedings, would be led to con clude, that the proposal of the Bullion Committee to allow the Bank
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two years to prepare for the resumption of cash payments. was a direct and gross infringement of their charter. It was condemned as a plan of compulsion and injustice. The Orator of the Bank, on that occasion, seemed to prefer even their dissolution, as a trading company, to this resumption of the functions for which they were originally instituted. "Let Government (he is reported to have said) "pay us the 18 millions they owe us, and we will make up the remaining two millions by subscription among ourselves within an hour, so as immediately to discharge all our notes."
In reply to this lofty language, I would observe: - 1st. that no one suspects the Bank of being insolvent, or of having made any advances without very good and ample security;-that no man has imputed the depreciation of their notes to any suspicion that their con cerns as a bank are not prosperous, and that their management for themselves is not extremely prudent; - 2dly. that if the Bank Proprietors, as a body, should, after mature consideration, he disposed to petition Parliament for leave to surrender their charter, there would be no difficulty in finding other members of the community, who, upon a transfer to them of that charter, and the other advantages of the Bank, would be perfectly ready to make good any advances from the Bank to Government, and to take upon themselves the whole concern, without refusing to resume cash payments at the expiration of two years.
With respect to the sum of 18 millions, which was said to be due by Government, it would have been well if, at the same time that the aggregate was so ostentatiously announced, some of the heads of that debt had been stated. The first and largest item of which this sum of 18 millions is made up, is the advance originally made by the Bank of their capital stock amounting to 11,686,000l.3 per cents. ; which advance has been carried on upon each successive renewal of their charter. This advance has no more connection with the issues of the Bank than any other three per cent. stock which Mr. JACKSON, or any of the Proprietors may possess individually; or than the whole mass of the funded debt of the country. This stock, though ultimately liable for their engagements, is no part of the securities upon which their notes are issued: it is the subscription capital of the company, and the repayment of it is not due or demandable, till the expiration of the present charter in 1833.
The next sum consists of two advances, of three millions each: the first lent in 1800, for six years without interest, as the price of the last renewal of their charter; and continued since the expiration of that period, at an interest of three per cent. :- the other advanced, without any interest, under an agreement with Government made in 1808. Both these advances are in consideration of the profits accruing to the Bank from the deposit of the publick balances in their hands. These deposits, it is quite obvious, have no connection with the circulation of the Bank; and would be continued, to nearly the same amount, if that circulation were restored to its sound state. The average amount of these deposits exceeds ten millions sterling.
No part of this advance of six millions is demandable until six months after the termination of the war.
< The difference between the amount of interest paid to the Bank on this advance, and the amount of legal interest at 5 per cent. on that sum, is correctly stated by Mr JACKSON at 210,100l. per
Thus are 17,686,cool. out of the 18,000.000l. so confidently, but prematurely, called for by Mr. JACKSON, disposed of. The small debt from the Government to the Bank consists, remainder of any either of the ordinary annual advance on the land and malt, the retheir weekly payment of which is amply secured by those taxes; produce being appropriated for that purpose, until the whole advance or of any advances of each year principal and interest is repaid; which the Bank may have voluntarily made, by the purchase of Exchequer Bills, for the repayment of which, with interest, they have individual the same security, and are upon the same footing, as any who may purchase such bills in the market,
With respect to the sum of 210,cool, annually saved to the publick upon the advance of the six millions, made, as I have stated, in consideration of a deposit in the Bank amounting, upon a permanent average, to more than ten millions; -I must be allowed to express my regret and surprise, that at a general meeting of the Bank Proprietors, where the very Directors with whom the agreement for this advance had been so recently made on the part of the Bank, were probably present, (and surely the conditions and nature of such an agreement must be known to all the Directors) it should have been more than insinuated, without contradiction from any quarter, that this sacri. fice of 210,000l. per annum, is made by the Bank to Government, in consideration of the advantage which the Bank derives from the The words of Mr. JACKSON, as stated suspension of cash payments. in the report of his speech, (Morning Chronicle, 21st September) are "But when the Committee determined so earnestly to recommend the resumption of cash payments, and a compulsive measure upon this institution, it would have been but becoming in them to recommend, as a preliminary step, the repayment to the Bank of the 18 millions due from the publick, and also the restoration of the 210,000l. derived from the Bank in consequence of the supposed advantages resulting This was a line of proceeding which from the non-payment of cash. at least common justice should have urged the committee to propose." Fortunately the correspondence on this subject between Government and the Bank in 1808 was laid before Parliament and is published. By a reference to that correspondence, every one may satisfy himself that this sum is the price paid by the Bank for the use of the publick balances, and on no other account whatever: to which I may add, that it was the opinion of several persons in the House of Commons, and particularly of the leading members of the Committee of Finance, in consequence of whose report this bargain was made that the advance obtained from the Bank was not adequate to the adwhich they derived from the agreement. Be that as it may, vantages I must decidedly protest against the assertion that Government has, at any time, demanded or received from the Bank any participation in the profits which accrue to them from the suspension of cash payments. Every administration, I am sure, since 1797, will join me in repelling
this insinuation; and in' maintaining that, whatever measures Parlia ment may think proper to adopt, in consequence of the report of the Bullion Committee, their deliberations cannot be influenced or fettered by any direct agreement, or implied understanding, with respect to the continuance of the suspension. Nothing in fact has ever passed between Government and the Bank, which can have the effect of preventing the legislature from fixing the period for the resumption of cash payments, without reference to any other consideration than the interest and the safety of the country'— (P. 84.)
Page 133. It has been said, that any step which may be taken towards the resumption of cash payments, would immediately compel the Bank Directors to reduce, in a very great degree, the amount of their accommodations to the merchants; and some persons have gone so far as to insinuate, that they would probably cease to discount altogether. The abettors of the present system have used this language with much success, as the means of creating an alarm in the mercantile world. To me there appears to be no necessity for making any sudden or violent diminution in their discounts: indeed there is no reason why they might not be continued to the same amount as at present. Every facility that could be required would, no doubt, bet afforded by Parliament in this respect. The whole of the six millions, advanced in consideration of the deposits of publick money, if necessary, might be repaid; and instead of this advance, an annual sum might be paid by the Bank to the publick, equivalent to the saving on the interest of this loan. This repayment would afford to the Bank more than a sufficient latitude for gradually reducing their circulation, without any diminution whatever of their commercial discounts.'
To receive from such authority as that of a Secretary of the Treasury, an assurance that Government will be able to repay the six millions advanced, and that the Bank may thus have it in their power to reduce their issues without narrowing their commercial discounts, is indeed a consolatory communication.
We would recommend to the attention of the landed interest, whom Sir John Sinclair has we understand, been addressing in favour of the Bank, the short but forcible arguments on the subject (p. 130.) in this pamphlet. Mr. Huskisson there explains to the land-holders that the progressive depreciation of money is injuricus to them in all respects. If their lands are let on lease, this depreciation is equivalent to a yearly reduction of income; and when out of lease, it presents a strong discouragement to letting them otherwise than from year to year, which is, in other words, to put a ne plus ultra to their improvement.Judicious, however, as these and many more passages of this pamphlet are, we cannot dismiss it without some por tion of animadversion. Diffuseness of style and prolixity in illustration are the circumstances most likely to attract censure: but in this blame, from the reasons already mentioned, we feel no disposition to concur. Our objections regard two points; first,