HISTORICAL SKETCH, &c. THE object of this Tract is, to lay before the reader a brief view of the History and Transactions of the Bank of England, in so far as they are of a public character, and to inquire into the expediency of prolonging the Bank's exclusive privileges for an additional term of years-But to facilitate these inquiries, we beg to premise one or two remarks of a general nature. CHAPTER I. Convertibility of Bank Paper. IT is needless to waste the reader's time, by making lengthened statements to shew the necessity of subjecting the issuers of notes to the obligation of paying them on demand. Wherever the power of issuing paper without this check, has been conceded to any set of persons, it has been abused, or, which is the same thing, such paper has uniformly been over-issued, or its value depreciated, from excess. Hence it is now admitted on all hands to be indispensable, in order to prevent injurious fluctuations in the value of money, that all notes be made payable, at the pleasure of the holder, in an unvarying quantity of gold or silver. This renders it impossible for the issuers of paper to depreciate its value below that of the precious metals. They may, indeed, by over-issuing paper, depress the value of the whole currency, gold as well as paper, in the country in which the over-issue is made; but the moment that they do this, gold begins to be sent abroad; and paper being returned upon the issuers for payment, they are, in order to prevent the exhaustion of their coffers, compelled to lessen their issues; and thus, by raising the value of the currency, stop the drain for bullion. It does, however, appear to us, that it is not only necessary, in order to prevent the over-issue of paper, to enact that all notes should be payable on demand; but that it is farther necessary, in order to ensure compliance with this enactment, to prohibit any one from issuing notes, until he has satisfied the Government of his ability to pay them. The circumstances that excite public confidence in the issuers of paper, are often of the most deceitful description; and innumerable instances have occurred, of the population of extensive districts having suffered severely from the insolvency of bankers in whom they placed the utmost confidence. In 1793, in 1814, 1815, and 1816, and again in 1825, a very large proportion of the country banks were destroyed, and produced by their fall an extent of ruin that has hardly been equalled in any other country. And when such disasters have already happened it is surely the bounden duty of Government to hinder, by every means in its power, their recurrence. It is no exaggeration to affirm, that we have sustained ten times more injury from the circulation of worthless paper, or paper issued by persons without the means of retiring it, than from the issue of spurious coin. It is said, indeed, by those who are hostile to interference, that coins are legal tenders, whereas notes, being destitute of that privilege, those who suspect them are at |