of November 1792. Hiftory will record the month of November 1792, as a memorable epoch, in our annals. It was peculiarly unfortunate to our traders. Yet, was it a month propitious to our conftitution. I was not inattentive, as you may fuppofe, to the paffages of that month. I knew that the violence of the republicans, and levellers, had by its action and realtion spread terror far and wide. I was acquainted with perfons, who feared the lofs of their lands, from the tumults of the Jacobins at Sheffield. I was acquainted with perfons, who fold their stock in the Britifh funds, in order to invest it, where they fuppofed it would be more fafe. I was acquainted with thofe, who difpofed, at an under value, of moveable property, which they imagined was moft likely to be deftroyed by innovation and tumult. Yet, whether those apprehenfions produced any of the numerous bankruptcies of November 1792, I pretend not to know. I believe, that all terrors difappeared, when the parliament was called, the militia were embodied, and, above all, when the nation, with an overpowering voice, avowed her attachment to the conftitution, and promised her fupport of the laws.

Our domestic quiet was, by thefe means, scarcely fecured, when the French, after various threats, declared war against Great Britain, and Holland, on the first of February 1793. The unusual bankruptcies, in the month of January preceding, can hardly be attributed to this fubfequent measure. The first bankruptcy, which created fufpicion, from d

its

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its amount, was the failure of Donald and Burton, on the 15th of February 1793. I wifhed them fo well as to drop a tear, when I heard of their fall. They were engaged in the moft uncertain of all traffic; in the trade of corn; in fpeculations on American corn: but, they had fustained no lofs from the war. On Tuesday evening, the 19th of February, the Bank of England threw out the paper of Lane, Son, and Frafer, who had never recovered the fhocks of the American war. Bank did them a damage, without an injury, as the lawyers would fay. The Bank was under no obligation to discount difcredited paper. And, next morning, the houfe of Lane, Son, and. Frafer, stopt payment, to the amount of almost a million of money. This great failure involved the fate of feveral very fubftantial traders. But, none of those houses had fuftained any damage from the war. Sufpicion was now carried up to alarm, and, every merchant, and every banker, who was concerned, in the circulation of negotiable paper, met with unusual obftructions in their daily business. Yet, it was not till the 16th of March, that the long established house of Burton, Forbes, and Gregory, ftopt, which was followed, on the 18th, by the failure of their correfpondents, Caldwell and Company, of Liverpool, to the amount of nearly a million. Still, neither of thefe great circulators of paper had fuftained any lofs from the war. And, as fufpicion had been carried up to alarm, alarm was now magnified into panic.

In the midst of this terror, the whole city of London was frightened at the rule of three. It was an easy calculation, by which it was demonstrated, that, if one houfe failed for a million, ten houses might fail for ten millions. In my time, I have known feveral calculators of great note impofe upon themselves, and the world, by working the rule of three, without taking in collateral circumftances. Neither these calculators, in their closets, nor those traders, in their counting-houses, ever reflected, that one bankrupt might pay five fhillings in the pound, a fecond ten fhillings, a third fifteen fhillings, a fourth twenty fhillings, and a fifth fiveand-twenty fhillings, in the pound. In fact, feveral bankers, during that panic terror, paufed in their payments, who immediately went on as ufual with their business, and fome great traders, who were obliged to ftop, foon paid twenty fhillings in the pound. Yet, all this while, we had not felt the ftroke of an enemy. In this manner, terror created distrust, distrust impeded circulation, and an impeded circulation is the greatest misfortune, that can afflict a commercial nation.

"Impatience changeth fmoake to flame, but jealoufie to hell."

Such, then, were the real causes of our commer→ cial diftreffes! And, fuch was the fad termination of feven years of the greatest profperity, both public, and private, which this nation had ever enjoyed! In the midst of this prosperity, a bank was erected, in every market-town, I was going to fay, in every village. The vaft bufinefs in the d 2

country

country created these banks; and thefe banks created, by their facilities, vast business. The rife in the price of the public ftocks drew immenfe fums of money from the country to London; and the still greater rife of the public stocks drove vaft fums of money from London to the country. Much of this money was placed in the country banks, which employed it, in fpeculations, to relieve themfelves from this fullness. But, of fpeculations, there is no end. The country bankers tried various projects to force a greater number of their notes into circulation, than the business of the nation demanded. They deftroyed, by their own imprudence, the credit of their own notes, which must ever depend on the near proportion of the demand to the fupply. The country bankers became ambitious of furnishing not only the country, but London, with notes. For this purpose, many of them issued notes, optioñal, to be paid, in the country, or in London. By thefe means, their notes came oftener, and in greater numbers, to London, than were welcome, in the fhops of London. These notes became difcredited, not only in proportion, as the fupply was greater than the demand for them, but as the banks were distant, and unknown. The projects, and arts, by which these notes were pushed into the circle of trade, were regarded with

By a lift of English country banks, which I have now before me, containing 279, though not the whole number, it appears, that of the 279, no fewer than 204 iffued optional notes, and 71 ftopt payment.

a very evil eye by those, who, in this management, faw great imprudence, in many, and a little fraudulence, in fome. When fufpicion ftalked out to create alarm, and alarm ran about to excite panic, more than four hundred country banks in England fuftained a fhock; all were fhaken; upwards of a hundred stopt; fome of which, however, afterwards went on, in their ufual courfe of punctual payments.

Yet, fay you, in your own ftyle of confidence, without knowledge, "the banking-houses, which "circulate promifory notes, have not contributed, "in any confiderable degree, to our prefent dif"trefs." The many which ftopt, the many that paufed, all demonftrate how greatly they contributed to our commercial mifery. The whole number of country banks in England was unknown; their capitals, and characters, were unknown. Their imprudence only was known, which had already shaken their own credit. And, fufpicion fastened upon all, though the event has proved, that they were generally more ftable, than had been at first fuppofed. Yet, few foreign merchants failed. The country banks, and country traders, were those, who chiefly fwelled the unfortunate number of our monthly bankruptcies. And, this comparifon is alone fufficient to fhow, that the cause of our commercial maladies arofe at home, without infection from abroad; that it arofe from the fulness of peace, without the misfortunes of war.