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be respected, because she prevents her flag from being denationalized, and because she refuses to submit to the Orders in Council of 1806 and 1807." It is no where said by the French government, that the decrees are repealed as regards this country, or to speak more correctly, that they are no longer applicable to us,-because we have executed our law of May, or merely because we refuse to submit to the British Orders, which, according to the doctrine of our rulers, is all that our non-intercourse can be held to imply.

The idea of a contract between us, is, as we have before remarked, never once suggested, but indeed virtually precluded, and the decrees are said to be withdrawn in our favour, not solely because we refuse to submit to the British Orders, but because, in addition to and distinctively from this, we are taking measures to cause our flag to be respected, (a most ominous phrase when we advert to its application in the case of Portugal) and also because we prevent our flag from being denationalized. Were we not so well apprized of the sagacity and treachery of the French government, or could we fathom all the secret designs, or answer for all the secret engagements of our administration, we would say,-Here is a mistake;we are taking no measures distinct from the non-intercourse to cause our flag to be respected; we do not prevent, or mean to attempt to prevent our flag from being denationalized in the French sense; consequently the French emperor is wrong in supposing that he is entitled to consider us as no longer subject to his decrees, and as he must soon be undeceived, we ourselves err egregiously, if we suppose, that we shall long escape, or rather ever be exempted from their operation.

It is not, however, impossible but that Bonaparte may be inclined for some time longer, to appear satisfied with our non-intercourse, and to refrain from insisting peremptorily upon a full acquiescence in his plan for the defence of our sovereignty. The pretended revocation of August was in part a fiscal device, and has been found tolerably successful.* The

In the exposé made in July last by "the orator of the government" to the French legislative body, concerning the "ways and means" of the present year, we find the following language-"The receipts of 1811 are estimated at 954,000,000 franks, 159 millions more that those of 1810. This considerable augmentation arises from three causes-1st. The addition to the budget of the revenues of the countries recently incorporated, and of those of Illyria. 2d. The amelioration of several branches of the public revenue. 3d. The application of new principles to the importation of certain commodities, and to the consumption of tobacco. The greater perfection given to the system of customhouse impost."

"The customhouses have given an increase of revenue since 1810, owing to the establishment of the duties on colonial articles. These duties have trans

additional resource which it opened for his treasury, by the collection of the enormous duties imposed upon colonial produce, and the vent of some small portion of the products of the French soil and manufactures, may be still useful. A sufficient number of our licensed vessels may escape the vigilance of the British cruisers, to answer his purpose, and if they do not, the irritation excited among us by their capture, combined with the feelings which a state of non-intercourse will keep alive, may propel us to the catastrophe, which forms the principal object of all his measures in our regard.

He looks undoubtedly to the occupation, at no distant period, of the seaports of Spain, through which it will be material for him to obtain supplies for his armies engaged in accomplishing the subjugation of the peninsula. As those supplies must be furnished by the United States, prudence would seem to dictate, that he should not proceed to immediate extremities against us, but be content to consult his present interests, by tolerating, under circumstances indeed of the heaviest oppression to the individuals concerned, and of the foulest dishonour to the American name, the few of our vessels which the temerity of mercantile enterprise may allow to frequent his ports. At the same time a trade under special license, so limited in its extent, so strictly guarded in its minutest details, so oppressively shackled, so completely enslaved, so miserably degraded, as that which he now suffers to exist, cannot interfere with his plan for the final extinction of commerce and the debasement of the commercial spirit, but on the contrary may rather serve to facilitate its ulterior accomplishment, by promoting the system of strict coercion and minute supervision which he is labouring to establish over the whole commercial industry of his immense empire, and by exhibiting the spectacle of a great commercial nation submitting to prosecute a trade so circumstanced, from motives in her government such as every American must blush to recollect, and notwithstanding considerations to the contrary, the most imperious, which honour and sound policy can furnish.

ferred to the chests of the public administration a part of those profits which were divided among the ship owners to whom freight was paid; the insurance offices or individual insurers who received premiums; and our enemies or our neighbours, who speculated advantageously upon the sale or deposit." "The entrepots on our coasts or frontiers have been broken up; our line of customhouses extended to the shores of the Texel, and of the Ems, of the Elbe and the Weser, has put an end to all fraudulent importation. The activity of English monopolists, the cupidity of the insurers of every country, the hardihood of pedlars will hereafter be baffled."

243

A letter to Alexander Baring Esq. Esq. on the present state. of the Currency of Great Britain.

THE disquisition which we are about to lay before the American public, addressed to one, who ranks at the same time among the most eminent merchants, and the ablest politicians of Great Britain, was not originally intended to be published in this country, but upon reflection, we have thought proper to give it a place in this journal, believing that it will be perused with interest, and found to contain much valuable instruction. We shall beg leave to preface it with a summary account which the author has communicated to us, of the nature of the controversy that now, in England, excites so great and such general agitation; an account perhaps the more necessary, as a large proportion of our readers cannot be presumed to be as well acquainted with the subject, as the gentleman to whom the letter is addressed.

The bank of England was first incorporated in the year 1694. Their capital originally consisted of 1,200,000l. sterling, and was gradually enlarged till it amounted, in 1746, to 10,780,000l. sterling, which dividend capital, as it is called, has still further increased by the gradual accumulation of undivided profits, so that it now exceeds the sum of fifteen millions of pounds sterling.

In point of organization, this institution resembles the banks in this country, all of which may be said to have been framed on the British model. It receives deposits, issues notes payable on demand, discounts bills of sixty and ninety days, and makes occasional advances to government.

Eleven millions, six hundred and twenty-six thousand pounds of its capital, are permanently loaned to government at three per cent., and a considerable proportion of its funds are employed, besides, in advances on exchequer bills, which may be considered as promissory notes of government.

The legal tender in England, which formerly, as in most European countries, was silver, has been confined to gold, since the 39th of the present king, except for payments under 251. sterling.

The notes of the bank of England, therefore, expressing a certain sum in pounds sterling, were strictly and on demand payable in guineas, and thus paid till the 26th of February 1797. The amount of their notes in circulation, in the years last preceding the year 1797, have varied from eight to VOL. II. 2 I

fourteen millions of pounds sterling, and may be said to have averaged eleven millions, whilst they used to keep in their coffers from two to six millions, in coin and bullion, for the purpose of meeting occasional demands.

There is, besides the bank of England, no other chartered bank in Great Britain, but there are a great number of private banks, even in the city of London, and still more in the country, all of which issue notes, payable on demand. The aggregate number of these banks in Great Britain, is now computed at seven hundred and fifty, and the joint amount of their issues is presumed to be about equal to the amount of notes issued by the bank of England.

These private and country banks, as rival institutions, preventing the monopoly of the trade of money lending, produce all the benefit of our numerous chartered banks, with this essential difference, that their paper is payable not in gold and silver, but in bank of England notes, so that a legislative control over the national bank, gives to government a control over all the currency of the empire. For, since every private or country bank, must provide bank of England notes to meet. their engagements on demand, in the same way as the national bank had to provide gold for the same purpose, previously to 1797-the issues of private and country banks, must in a great measure depend on the facility or difficulty of procuring notes of the bank of England, as the issues of this institution depended formerly on the facility or difficulty of procuring gold.

Almost all the coin in England is put in circulation by the bank, who had therefore, previously to 1797, constantly to purehase gold bullion, to send to the mint, where it was converted into guineas, and then returned to them free of any charge, the public bearing the expense of that establishment.

An ounce of gold, of standard fineness, was worth 34. 178. 10 d. sterling. This therefore was called the mint price of gold, which, consequently, was always equal to the nominal value of the bank of England notes.

From this mint price of gold, the market price of gold, or of gold bullion-which is the comprehensive term for all gold not guineas-frequently differed. Gold bullion could never be lower than the mint price, because the bank was always ready to give 3. 178. 10d. sterling per ounce of standard fineness, but it was often higher:-it often bore a premium in the same way, and for the same reasons, as Spanish dollars often have borne a premium here;-it answered certain purposes abroad which bank notes could not, and guineas were not allowed to answer, because their exportation was prohibited by law.

In consequence of this law, whenever a person wanted to export gold bullion, he was obliged to take an oath before an alderman, that it had not been melted down from guineas. This has given rise to the expressions of gold which may be sworn off, and gold which cannot be sworn off.

But, though it was intended by this law to keep in the country, not only all the guineas, but all the gold that ever had been coined into guineas, it is obviously so easily eluded as to make it very questionable whether it has not, like most laws which it is impossible to inforce, proved more injurious than beneficial.

This impossibility of preventing guineas, as guineas, or when melted down into bullion, from leaving the country whenever the lowness of foreign exchanges, that is, the cheapness of pound sterling bills,-that is, of orders for bank of England notes abroad, or other commercial objects invited to their exportation and investment in distant countries; this impossibility we say, as well as the home consumption of gold by various manufactures, which would naturally tend in some degree to diminish the guineas in circulation, often caused the market price of gold to rise above the mint price, and forced the bank, always obliged to provide guineas, to pay 41. sterling and upwards per ounce for gold of standard fineness, whilst they paid it away when coined at 31. 17s. 10d. sterling, thus losing from two to three per cent. in the process.

Whenever this occurred, people could not be wanting who took advantage of the circumstance, and called on the bank for guineas, in order to melt them down, and sell them to the bank. again, in the shape of bullion, at an advanced price.

To put an end to this abuse, as well as to check the exportation of gold, and stop the run on them, as it was termed, the bank had no other means than to lessen the amount of their notes in circulation by diminishing their discounts. This generally had the effect of creating a scarcity of money, which rendered all commodities cheaper, caused therefore gold to fall, foreign exchanges to improve, and the call on the bank for guineas to be discontinued.

To this remedy therefore, the bank had recourse when, towards the end of the year 1795, and during the whole of 1796, the calls on them for guineas became more and more frequent, and their stock of cash and bullion dwindled from four millions to two millions and a half, till in the beginning of 1797 there remained in their vaults scarcely half this sum. They reduced their notes in circulation from eleven millions to eight millions; but this reduction, instead of proving, as usual, beneficial, seemed to aggravate the evil, because it arose in a great mea

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