relinquish its exclusive privileges sixty-five miles beyond London: and even what they appeared to give up was in a great measure preserved, by a clause which prohibited any of the joint stock companies, which the Act might originate, from drawing upon London for sums of or under 50l.; thereby giving a monopoly in such paper to the existing banking companies, who were supposed to be in default, to the exclusion of the better companies, which it was passed to establish. stablish.

CHAP. VII.

METALLIC STANDARD.

PREVIOUS to 1816, gold and silver coin were equally a legal tender, to any amount, in England; but, since that year, gold coin has been declared the only legal tender for sums above forty shillings.t

Another important alteration made in this year was, that our pound of Mint silver, in place of being coined into 62s. as formerly, from the time of Queen Elizabeth, was directed to be

*7 G. 4. c. 6.

+ 56 G. 3. c. 38. § 11, 12.

coined into 66s. of which, however, 62s. only were to be delivered from the Mint. *

The effect of this regulation was, to prevent any person from carrying silver to the Mint to be coined, because no person would carry a pound of silver to the Mint to have parts of it retained.

The silver coin, however, being estimated in gold, this prevention is of no further consequence than as it throws upon the government the duty of providing a sufficiency of silver coin, without having the means of ascertaining what will be required.

So long as small notes were in circulation, these, in some measure, regulated the amount of silver coin; because bankers in the country, issuing small notes, were obliged to keep a stock of silver to meet demands upon them; while their being obliged to keep such a stock of silver tended to limit the issue of notes. But, not small being now obliged, they no longer keep such a stock of silver, and the country parts of England are thus distressed from the want of means to make small payments.

A standard of gold, however, is preferable to a standard of silver, in this respect, that it is less liable to change; but a poor country cannot

*56 Geo. 3. c. 68. § 11, 12.

sustain a currency of gold; and though England be a rich country, yet many parts of it are poor, particularly the agricultural districts, which thus suffer from a want of silver currency, and also from a want of gold currency, which they are unable to retain. Gold travels up to London, in the same manner, and for the same reason, that Bank of England notes return thither. Both may come in to bankers in the country, who, however, do not issue either, but send both to their correspondents in London, as remittances, on account of the bills of exchange which they draw upon such correspondents.

In this situation, one of two things is unavoidable. Either we must adopt a standard of silver, and again coin our pound of Mint silver into sixtytwo parts or shillings; or, preserving our gold standard, with our present Mint regulations as to silver coin, we must again allow small notes to be issued.*

* Many persons have suggested that the value of gold should be declared by law to be 47. per ounce. The suggestion shows that those who make it know nothing of the matter. By our Mint regulations, the exchangeable value of gold is fixed as in regard to silver, in the proportion of 15.2096 to 1; and our pound of Mint silver, consisting of 12 ounces, having been, previous to 1816, coined into 62 parts or shillings, and each shilling representing 12 pence, our Mint price of silver is said to be 5s. 2d. an ounce; so that an ounce of gold, estimated in silver at 5s. 2d. an ounce, is exactl

E

If the exclusive privilege of the Bank of England shall be withheld from it, upon the renewal of its charter, whereby an over issue of paper could not take place, I should say that small notes should again be allowed to be issued; because the same sanction which keeps notes of a large denomination sound also keeps notes of a small denomination sound, namely, their convertibility into coin at the option of the holder. A banker's note, being in the nature of a receipt for so much gold, while gold is our standard, there is no reason which I have been able to discover why a receipt should not be granted for a small sum as well as a large sum, but the contrary.

37. 17s. 10d. By 37. 17s. 10žd., therefore, we mean an ounce of Mint gold; and whether we call this ounce 4l. or 37. 17s. 10d., it will still be an ounce of gold, and nothing else. Before we can, however, call an ounce of gold 4l., we must alter the whole of our Mint regulations; and we should alter them with no benefit whatever, but the contrary: we should depreciate the standard, and raise money-prices according to the depreciated standard : but an ounce of gold would still be an ounce of gold, and the exchangeable value of gold would be still the same.

Our ounce of gold at 37. 17s. 10 d. now regulates the exchangeable value of our silver coinage, though at 5s. 6d. per ounce, of which 37. 2s., only are delivered from the Mint. Our silver coin is, in truth, now nothing but counters, and copper counters would do equally well, if it were not that we should be inundated with counterfeits.

Our currency will then attain that perfection which is described by Mr. Ricardo. The exchangeable value of our paper currency will always be equal to the exchangeable value of our gold coin. All the amount of gold now required to supply the want of small notes will return to the general purposes of commerce; and, with small notes, a silver currency will return to the country parts of England, where it is most wanted, for the purposes of industry.