FARTHER REMARKS ON THE SUBJECT OF THE PRESENT Continued from p. 300. BANK THE paper referred to was printed before any notice arrived at this place of Mr Pitt's intention of carrying into practice a plan for the relief of the country, nearly on the same principles with that recommended here. This appears to be cne of the most beneficial,exertions of the power entrusted with government that has occurred in our time, and will do infinite honour to the minister who brings it forward. I question if in the annals of past times, a single instance can be found of an exertion of any governing power equally patriotic, judicious, and beneficient; and it affords a 'fine example of the necefsity there is for the controul of government, and the utility mankind may derive from it when under the guidance of wisdom. The present alarming situation of this country does not seem to proceed either from the interruption that the war has given to commerce, as has been often afserted, nor to a slackening in the demand either at home or abroad, nor to ruinous speculations which so often derange the economy of individuals. The manufacturers do not allege that their orders are discontinued from any quarter, nor that the prices offered are inadequate ; but merely that the state of credit is at present so precarious, that they dare not venture to let goods go out of their hands at the usual credits allowed; and that from the unexpected interruption which has taken place in the practice of discounting bills, their funds are so entirely locked up as to put it out of their power to answer the immediate demands that have come upon them. That this is the case is sufficiently obvious to all, seeing it is universally admitted, that nineteen out of twenty of the numerous bankruptcies that have happened are merely stoppages, where the funds are more than adequate to answer all the demands that can be made upon the parties concerned. This evil, therefore, originates solely in the interruption that has taken place in the salutary practice of discounting bills and what, we may now afk, has occasioned this destructive interruption to discounting good bills? It will not be difficult to answer this question. There is in general a certain quantity of floating cash in this country, which men with to keep at their command, ready to answer any emergencies. This has been usually in Scotland lodged with bankers, at a reasonable rate of interest, a little under that which is given for money lodged on other securities for a definite time. This floating stock has been usually applied almost solely to the accommodation of individuals with cash accounts, and to the discounting of bills. Upon the first prospect of the present war with France, stocks having fallen greatly below the par of peace, and it being universally believed that the war could not be of long duration, almost every person who had the command of money, wifhed to avail himself of the obvious benefit, that this circumstance presented to his view; so that almost the whole of this floating stock was instantly demanded from the bankers *. This rendered it inconvenient * From the great wealth that certain bankers in Scotland have suddenly acquired by speculating in the funds, many persons suspected that something of the same kind might have been attempted by the bankers themselves, and that this circumstance took up a great part of that capital which ought to have been employed for accommodating the public. If so, the public would have had good reason indeed to complain of them; but it is scarcely to be believed that when embarrassments occurred, and the price of stocks not falling, they would not have retired that stock very soon. It would VOL. XIV. ՍԱ May 1. for them to discount bills as formerly; and this circumstance again made a greater demand upon them than usual for money upon cafh accounts of individuals, which subjected the bankers to additional inconvenience. Just at that critical time, the Bank of England, seemingly with a wanton capriciousness which deserves the severest reprehension, instead of giving that support to country bankers and wealthy companies, which the citcumstances here stated rendered so obviously necessary, refused to discount bills, without discrimination of any sort. The consequences were obvious and inevitable. Even those who had very large capitals, from being de-` prived of their usual resources, were unable to answer, on the moment, the demands that came upon them; and were obliged to stop. These stoppages necessarily affected those immediately connected with them; and these another, and another; so that, like a house of cards, one falling brought a whole heap of ruins about it *. F be a very proper clause in Mr Pitt's bill to require every banker applying for relief, previously to make oath that he has no money vested in the funds; and to make it highly penal if it should be discovered he ever had so. Perhaps no banking company ought to be permitted to exercise this business without a licence; at obtaining which, such oath ought to be administered, and such penalties imposed. Nothing can be more destructive than for bankers, who are entrusted with the money of others, to be dabbling in such a deep and hazardous game as the buying and selling stocks; and the public ought to have some good security that they will not do so. I have no doubt but the want of such security, has induced many a person to withdraw their money from the bankers at present; and thus to en crease the evil. * Some may perhaps imagine that the Bank of England would experience an inconvenience of the same kind here specified, and would not therefore have it in their power to grant the accommodation wanted. But it is well known, that the course of business is so dif In this situation, the minister, with infinite justice and propriety, steps forward to save the country. What the Bank of England ought to have done, he now finds himself obliged to do, or to suffer the country to be hurried needlessly into a state of universal ruin. As far as his plan is yet known, he seems to intend to give a loan to such banking houses, or other considerable bodies of men, who can produce undeniable evidence of the sufficiency of their funds to answer all demands upon them, of such sums as it shall be deemed safe and prudent to grant to each respectively. These notes to be issued in the form of exchequer bills, bearing interest from the day they are issued; for the payment of which interest, as long as they shall continue in circulation, together with the principal, the parties to whom they are granted will no doubt be required to give sufficient security. Thus will government, without costing the nation a single fhilling, turn back into its usual channel, that circulation which has met with such a cruel and ill judged temporary obstruction *. Nothing can be so ruinous to a manufacturing and commercial country as an interruption to the general current of circulation and credit, where that credit is not attempted to be stretched beyond the real funds of the parties concerned. Indeed it is this credit chiefly which has given to the manufactures and trade of this country that decided advantage they pofsefs above those of all rival nations; for it is well known that it is neither the superior cheapness, nor excellence of British manufactures which gives them the decided advantage they pofsefs above ferent between that bank and others, that the very circumstance which diminished the resources of the one at the time would tend to augment those of the other. This is no place for explaining this peculiarity. *The Bank of England, even in this case, will be obliged to concur in circulating these exchequer bills, otherwise they would soon be May ti others in foreign markets, but the long credits our merchants can afford to give. And what is it that enables our merchants to give these long credits, but the practice of discounting bills, which enables every one to have the full command of his funds at whatever time he may chance to have occasion for them. Nothing therefore can be so destructive to a country so circumstanced, as a causeless interruption to this circulation on which its existence so materially depends: and the present incident, which shows that it is in the power of one body of men, whenever they please, to throw the country into this state of distress, proves that in this particular branch of our commercial arrangements, sufficient care has not been taken to curb that spirit which the excefs of power so naturally engenders. Hitherto the Bank of England, like the corporations of old, during the infancy of political societies, has been of great utility to the public; but is there not danger, that, like them too, the powers conferred upon it may in time become subversive of the interests of that very society for whose welfare it was instituted, and which, for a long time, it has so materially promoted? Let the minister, therefore, and the public, now reflect, whether it is not time to think of establishing some kind of counterpoise to this enormous body, which, like the serpent that sprung from Aaron's rod, seems at present to pofsefs the power of swallowing up all others of the same kind, whenever it fhall please to do so. Man is a fallible creature, and power when unchecked is ever in danger of degenerating into despotism. Monopolies in a trading country are always pernicious. But where is there such a monopoly as greatly depreciated; but it is not to be supposed, powerful as they are, they will dare to refuse this. It would be kicking against the pricks indeed, fhould they decline it; and would soon bring the matter to an ifsue between them and the country. |