state how much depression fell upon tin in common with other articles of export in 1811; but since 1814 the depression amounts to upwards of 50%. per cent., which, as it appears to me, can be ascribed only to the defalcation in the supplies of gold and silver from the mines, increased by the consequences attending the return to cash payments in 1819, and the putting down of the small notes in 1826. Its depression, as stated in the finance accounts, accordingly appears to have been greatest in the years 1819, 1820, and 1821; again in the year 1826; and again in 1830; when the small notes were completely withdrawn from circulation.

The general depression of the aggregate exports appears to have been also greatest in these years. Still the general depression in these years is much less than the depression experienced in 1811. The depression occasioned by the alteration of our currency, therefore, while it confirms the conclusion, that the commencement of the depression can alone be ascribed to a defalcation in the supply of gold and silver from the mines, also shows that that defalcation must have had a much more powerful influence upon general prices than the alteration in the currency, to which all the distress we have suffered has

been generally attributed. As the return to a metallic standard, for which preparation was

made in 1819, could not have an effect beyond the difference between the mint and the marketprice of gold, so the withdrawing of small notes from circulation could not exceed the amount of the exchangeable value of the gold required to take the place of the small notes. Either effect could only be temporary, and limited, in its operation in depressing industry. But restraints upon our money system, which I shall proceed now to notice, have a more extensive and a more lasting operation.

PART II.

MONEY RESTRAINTS.

CHAP. I.

THE BANK OF ENGLAND AND ITS EXCLUSIVE PRIVILEGE, WITH ITS IMMEDIATE CONSEQUENCE.

THE Bank of England was established in the year 1694, by an act* passed for granting several rates and duties on tonnage of ships and beer, &c., for securing certain recompenses, &c. to persons who should advance 1,500,000l. to the state, by which their majesties were authorised to grant a commission to take particular subscriptions for 1,200,000l., part of the said sum of 1,500,000l., to be paid to the receipt of the Exchequer; in consideration of which, the subscribers were to receive an annuity of 100,000%. per annum, being interest at the rate of 87. per cent., or 96,000l., and 4000l. for management: and their majesties were authorised, by letters

patent, to incorporate the contributors by the name of "The Governor and Company of the "Bank of England," with the power" of deal

ing in bills of exchange, or buying or selling bullion, gold, or silver; or selling any goods, "wares, or merchandise whatsoever, which shall

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really or bona fide be left with the said corpo"ration for money lent and advanced thereon, " and which shall not be redeemed at the time "agreed on, or within three months thereafter."

No exclusive privilege was granted to the Bank at its first establishment; but three years afterwards, when it was enabled to enlarge its capital by receiving further subscriptions, it was provided, "that during the continuance of the "Governor and Company of the Bank of Eng"land, no other Bank, or other Corporation,

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Society, Fellowship, Company, or Constitu❝tion, in the nature of a Bank, shall be created "or established, permitted, suffered, counte"nanced or allowed by Act of Parliament within "this kingdom."*

It would seem, however, that some chartered companies, previously established, had attempted to carry on the business of banking: for some years afterwards, upon the recital of its act of establishment, and that "some corporations, by

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"colour of the charters to them granted, and "other great number of persons, by pretence of "deeds or covenants united together, having presumed to borrow great sums of money, and "therewith, contrary to the intent of the said act, to deal as a Bank, to the apparent danger "of the established credit of the kingdom," the Bank got a clause introduced into an act of parliament passed in the year 1710*, by which it was enacted, that, "during the continuance of the "Governor and Company of the Bank of England, "it shall not be lawful for any body, politic or "corporate, whatsoever, created or to be created, "other than the said Governor and Company of "the Bank of England, or for other persons whatsoever, united or to be united in covenants or partnership exceeding the number of six per

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sons, in that part of Great Britain called Eng"land, to borrow, owe, or take up any sum or "sums of money on their bills or notes, payable "at demand, or at less time than six months "from the borrowing thereof."

This exclusive privilege could not fail to retard the establishment of banking companies in England; and when they came to be established, they appear to have been so insignificant as to put forth notes for sums even under twenty

* 6 Anne, c. 22. § 9.