perspectam habere. There is judgment displayed in the selection of the materials which are likely to be of most value to the student; skill generally exhibited in their disposition and development; and originality in moulding them so as to harmonise with the whole. We need, therefore, scarcely add, that we shall hail the appearance of the second volume, as completing the most valuable treatise on mechanics which has yet appeared in our language.

ART. VII.-1. The Scotch Banker. London. 8vo. 1828. 2. Observations on Paper Money, Banking, and Overtrading. By Sir Henry Parnell, Bart. London. 8vo. 1827.

3. Letters on Currency. By Daniel Hardcastle. 1828.

4. Corn and Currency. By Sir James Graham, Bart. Third Edition. London. 8vo. 1828.

5. Considerations on the State of the Currency. By Thomas Tooke. London. 8vo. 1826.

6. The Effect of the Issues of the Bank of England. By Robert Mushet. London. 8vo. 1826.

7. Views on the Currency. By T. Joplin. London. 8vo. 1828. 8. A Letter to Lord Grenville, on the Resumption of Cash Payments. By Thomas Tooke, Esq., F. R. S. London. 8vo. 1829.

THE

HE changes which have taken place, within the last thirty years, in the standard of our currency, and the invasions upon the property of individuals unavoidably resulting from these changes, have furnished a painful and costly lesson, which we trust will never be lost to the public. The distress which the community has experienced-the ruinous losses which individuals have sustained, afford a melancholy proof of the dangers and difficulties to which any tampering with the currency cannot fail to expose the country. It is, no doubt, perfectly true, that the injurious results to which we allude did not immediately appear; on the contrary, they did not begin to show themselves until the period arrived when, in the opinion of all parties, the substitution of a metallic standard for a fluctuating paper currency became indispensable as long as the machine continued to proceed in its devious route no violent jolting was felt; but the moment its conductor attempted to turn it into its ancient track, the impediments appeared so overwhelming as very nearly to stop the vehicle. With the causes which led to the suspension of cash payments in 1797 we do not mean to meddle: the difficulties of that trying period, when the public mind had, from peculiar circumstances, be

come

come suddenly and violently agitated, furnish, perhaps, a satisfactory justification of the order in council which authorised a temporary suspension of cash payments: but the error then committed was, in not removing the restriction imposed upon the Bank, as soon as alarm had subsided, and payments in specie might have been resumed without inconvenience to the Bank or injury to the public at large.

The authors of the pamphlets placed at the head of this article manfully contend, that even our present system is erroneous: one party calls for a currency entirely metallic; the other is equally enamoured of a paper currency. One would persuade us that the country can never be safe without a double circulation of gold and silver, to the utter exclusion of notes; while the other is thrown into actual convulsions at the sight of a sovereign.

The advocates of a paper currency not convertible into cash found their arguments on the prosperous condition of the country during the suspension of cash payments, and the distress and difficulty which suceeeded the restoration of a metallic standard in 1819. It must, we apprehend, be conceded, even by the warmest supporters of a metallic standard, that the act of 1797 did, for a time, contribute to develope the resources of this country; and this effect became more especially apparent in the strenuous and successful efforts which were everywhere made to extend and improve the cultivation of the soil. We are inclined to think that, during the period which elapsed between the suspension and resumption of cash payments, agriculture made greater progress in this country than it had made during the whole course of the eighteenth century. It is certain that more waste land was inclosed and brought under tillage between 1797 and 1819 than between 1697 and 1797; and the improvement of old inclosures at least kept pace with the exertions which were made to reclaim and cultivate those neglected districts. That this flourishing condition of agriculture did in some measure spring out of the suspension of cash payments, is a circumstance for which it is not difficult to account. It is now pretty generally admitted that the measure in question gradually lowered the standard of value; that is to say, it gradually diminished the real amount of all fixed money payments. The pound sterling, which theoretically represented one hundred and twenty grains of gold, dwindled in practice into ninety-six grains, and occasionally still lower. The rise in the selling price of commodities necessarily kept pace with the diminution of the standard on which their value was calculated: every article of consumption gradually advanced in price; but this increase in price was merely nominal; there was no real addition made to the intrinsic value of commo

dities; the apparent difference sprung principally from the alteration in the standard by which this value was measured-with the exception of corn, which must be affected in its market price, not only by such alterations, but also by the state of supply, as connected with good and bad seasons. But although the rise of prices, arising from the alteration in the standard, was merely nominal as far as it concerned the public at large, all those who had any fixed money payments to make derived a real advantage from it. This was more especially the case with respect to the occupiers of land: by far the greatest portion of the landed property of this country was, at the period when cash payments were suspended, held under leases having terms to run. Rents were

no longer paid in cash but in paper; and the paper pound note, even when it had, by the process of depreciation, become worth no more than fourteen or fifteen shillings, continued to discharge money engagements entered into on a higher standard. It is evident that the land-occupier gained, during the currency of his lease, twenty-five or thirty per cent. (according to the depreciation of the standard,) at the expense of the land-owner. It is true that the gentlemen who had granted leases were thus deprived of a considerable proportion of their just claims; but it is probable that the gain of the tenants was generally laid out in a manner which ultimately made some compensation for the temporary loss which the landlords sustained. The extra profit which the farmer derived from this source encouraged him to engage in new undertakings : it became an additional capital in his hands, which was in most cases laid out in the further improvement of his farm. The energy with which the farmers of this country prosecuted the improvement of land, during the suspension of cash payments, is well known: it has completely altered the face of the country, and made an incalculable addition to its productive capabilities; and as no agriculturist, however skilful and enterprising, can work without capital, we are very much of opinion that the gain, which the alteration of the currency enabled him to make at the expense of his landlord, became first the stimulus and then the instrument of the exertions which he subsequently made. The suspension of cash payments enabled the leaseholder to withhold, we will suppose 251, out of every 100l. which he had contracted to pay his landlord; but the profit thus made was not foolishly squandered and spent ; -some cases of improvidence, no doubt, occurred-but in the great majority of instances it was laid out in improvements, which the tenant could not carry away or exhaust before the termination of his lease, and from which the land-owner was enabled, in the end, to derive considerable benefit.

It may also be observed here, that where the owner had a mortgage

mortgage on his estate, or had any annuities to pay under wills or settlements, he was enabled to get back at least a part of what the tenant withheld from him. We will suppose that the rent of his estate amounted to 1000l. per annum, and that, by way of annuities or interest for mortgage, he had payments to make amounting to 250l. per annum. The alteration in the standard reduced his income from 1000l. to 750l. per annum; he also was enabled to reduce the amount of his annual payments from 250l. to 1871. 10s. When the lease expired, he was placed in a situation to make a new agreement with his tenants: his rent was then raised in proportion to the altered value of the circulating medium, and still further augmented by the improvements which an unexpected addition of capital had enabled the occupiers to make upon his land-whilst his outgoing payments to the annuitants and mortgagee were made in a depreciated currency.

Indeed we apprehend that, to this latter class of persons alone, was the measure of 1797 seriously injurious. Their annual incomes remained the same in amount: but they sustained a real reduction equivalent to the depreciation of the currency in which they were paid. The mortgagee, or annuitant, entitled to one hundred pounds, still continued annually to receive one hundred pounds; but, as each of these pounds had fallen from twenty to fifteen shillings in real value, when given in exchange for commodities, the effect was precisely the same as if he only received seventy-five pounds, worth twenty, shillings a piece.

The effects of a depreciated currency, although unavoidable and certain, yet appear in such a form as to elude the observation of the mass of mankind. They are seen in a general rise in the market price of all commodities; and, upon a given average of years, this rise will always be found to correspond with the amount of depreciation which the currency of any country may have sustained. This is the circumstance which renders the bulk of mankind so slow in comprehending and detecting a depreciation in the standard of value they are accustomed to see prices rise and fall whenever a variation happens to take place either in the supply or demand for commodities, or in the expense of producing them. To this cause, which daily experience renders familiar to them, they ascribe a rise of prices which really springs from another source, of which they have no perception. If, for instance, the quantity of gold now contained in the English pound sterling were to be reduced from one hundred and twenty to ninety-six grains, or if the weight of the sovereign remained the same, and thirty grains of alloy were substituted for an equal quantity of standard gold, the immediate and visible effect in practice would be a rise of twenty-five per cent. in the market price of all commodities: sup

posing mutton, when such a change took place, to sell for sixpence per pound, it would rise to eightpence; sugar from ninepence to twelvepence; and wheat from sixty shillings per quarter to eighty. But the ordinary observer seldom suspects that this rise of prices is occasioned by a diminution of the standard; he conceives that mutton, sugar, and wheat have become dearer either because these commodities have become scarcer, or the demand of the consumers has been increased.

The depreciation of the currency effected by the suspension of cash payments did not commence immediately; and its progress was gradual. At length, however, the paper pound note ceased, de facto, to be worth more than fourteen or fifteen twentieths of the metallic pound sterling; and, if we had not returned to a metallic standard, there can be little doubt that the depreciation of the paper pound note would have proceeded still further.

The return to a metallic standard of value was then a matter of indispensable necessity: it was recommended by every principle of justice, as the only means which could save annuitants, and persons entitled to fixed money payments, from a still greater loss of property than they had already sustained. We are, indeed, convinced, that if the paper standard had been continued, it would, in practice, have had the effect of putting an end to all contracts which the interested parties intended should take effect prospectively: as long as the standard by which payments were to be measured continued liable to constant and serious fluctuation, no capitalist in his right senses would have lent his money to individuals on mortgage, or to the state on annuities; nor would any landed proprietor have been prevailed upon to grant a lease of his land. Hence it seems clear that the tendency of a paper currency, unlimited in its issue, and not convertible into cash, to fall in value, although for a short period favourable to agriculture and the other branches of national industry, would unavoidably have produced a revulsion more than equal to the benefit which had been derived from this depreciation. The influence of this revulsion would have acted, perhaps, most injuriously upon the interests of agriculture. It cannot be doubted that it would, in practice, have entirely put an end to the custom of letting farms on lease; and thus would have destroyed a system which experience proves to be the most efficient means of attracting capital to the cultivation of the soil. But although the return to a metallic standard was both just and necessary, it has been exceedingly painful in its operation. The restoration of the integrity of our currency proved, in practice, more injurious both to individuals, and to the community at large, than its previous depreciation. Its operation was instantaneous; and it fell, if not exclusively, at least more generally, upon the property of the productive classes.

It