barrassment arising from the exportation of the precious metals; the question of demand would be resolved as respects the exportation of gold and silver, into a question of ownership and possession; the question of exchange into a question of the expense of transporting the gold and silver from one country into another; the quantity of precious metals in deposit would be determined by the wants of the owners, and the wants of trade. Credit would follow owner

ship, and not property held on trust. The premium on gold or silver would be determined at the exchange bank, and would not enter into calculations of foreign exchange. Compare the simplicity of such calculations with the complexity of the present calculations — a fixed weight for a variable value. All alarm ceases respecting the importation or exportation of the precious metals and all confusion of language.

The more enlightened principles of the present age have determined on the discontinuance of bounties and of prohibition; and on the substitution of moderate duties for revenue, instead of high duties for protection, on most articles of importation. Our intercourse with our colonies, and our treaties with foreign nations are no longer made subservient to the balance of trade, or to a monopoly in favour of our own country.

As far as the country is concerned, the principles of the mercantile system formerly in vogue are abandoned; and the principles of free trade, in comparison with the old system, adopted. The country is in harmony with commerce; and the monopoly of exclusive companies established for private and particular interests, has given way to the rights of unshackled enterprise and general advantage.

But the monetary system has succeeded to the mercantile system; more pernicious principles are now to be adopted for the safety of the Bank of England than could be maintained for the supposed benefit of the country. The Bank of England is more powerful than the country, and will continue to be so, as

long as the delusion prevails that evasion of a promise is equal to its performance; and that the claims of the bank to protection are superior to the law of justice.

Instead of impolitic discouragements of importation, and encouragements of exportation, by drawbacks and bounties, and prohibitions, and treaties, and colonies, and high duties, to "increase the quantity of gold and silver in the country, by turning the balance of trade in its favour:" we now adopt the more direct and efficient mode, of lowering prices to increase the quantity of gold and silver in the Bank of England, by turning the exchanges in our

favour.

CHAP. XXIX.

LORD BACON ON TRUTH.

ADAM SMITH ON LOWERING THE VALUE OF MONEY - ON EVASION OF PAYMENT. LORD KING ON THE BANK RESTRICTION. - SUNDRY REMARKS.

LORD BACON, "Essays moral, economical and political." Of Truth, p. 3. :

"To pass from theological and philosophical truth to the truth of civil business, it will be acknowledged even by those that practise it not, that clear and round dealing is the honour of man's nature, and that mixture of falsehood is like alloy in coin of gold and silver, which may make the metal work the better, but it embaseth it; for these winding and crooked courses are the goings of the serpent, which goeth basely upon the belly, and not upon the feet." P. 4.:

Surely the wickedness of falsehood and breach of faith cannot possibly be so highly expressed as in that it shall be the last peal to call the judgments of God upon the generations of men: it being foretold that when 'Christ cometh' he shall not 'find faith upon earth.””

Adam Smith, b. v. ch. iii. vol. 3. p. 420.:

"The raising the denomination of the coin has been the most usual expedient by which a real public bankruptcy has been disguised under the appearance of a pretended payment. If a sixpence, for example, should either by Act of Parliament, or Royal Proclamation, be raised to the denomination of a shilling, and twenty sixpences to that of a pound sterling, the person, who, under the old denomination, had borrowed twenty shillings or near four ounces of silver, would, under the new, pay with twenty sixpences, or with something less than two ounces.'

P. 424.:

"Nations have sometimes for the same purpose adulterated

the standard of their coin, that is, have mixed a greater quantity of alloy in it. If in the pound weight of our silver coin, for example, instead of eighteen pennyweights, according to the present standard, there was mixed eight ounces of alloy, a pound sterling or twenty shillings of such coin would be worth little more than six shillings and eight pence of our present money."

P. 421.:

"When it becomes necessary for a State to declare itself bankrupt in the same manner as when it becomes necessary for an individual to do so, a fair, open, and avowed bankruptcy is always the measure which is both least dishonourable to the debtor, and least hurtful to the creditor. The honour of a state is surely very poorly provided for, when, in order to cover the disgrace of a real bankruptcy, it has recourse to a juggling trick of this kind, so easily seen through, and, at the same time, so extremely pernicious.”

The "mixture of falsehood" in civil business is compared by Lord Bacon to the mixture of alloy in coin. In the opinion of the advocates of the new "monetary science," the "evasion of the promise" in bank notes will have the same effect as the mixture of alloy in coin of gold and silver, it will make the bank note, like the metal, "work the better;" and the substitution of the commodities of the manufacturers and merchants for the bullion, that most convenient commodity, which the Bank of England holds under a solemn engagement to deliver it to the bearer on demand, instead of being considered as embasing the promise or truth, is considered a legitimate mode of protecting the Bank of England.

The raising the denomination of the coin, the additional mixture of alloy in the coin, and the pressure upon credit, all act upon prices, and are adopted to evade the payment of a just debt, or the delivery of the gold deposited.

Mr. Francis, in his "History of the Bank of England," (v. i. p. 161.,) mentions, with approbation, a "stratagem" which the Bank of England had recourse to on the occasion of the "Pretender's " rebellion, by which alone "they "they escaped bankruptcy:

"Payment was not refused; but the corporation retained its

specie, by employing agents to enter with notes, who, to gain time, were paid in sixpences; and as those who came first were entitled to priority of payment, the agents went out at one door with the specie they had received, and brought it back by another, so that the bona fide holders of notes could never get near enough to present them. By this artifice,' says our authority, somewhat quaintly, the bank preserved its credit, and literally faced its creditors." The wisdom of the artifice was witnessed in its effect. The London merchants, with honourable promptitude, called a meeting of their body at Garraway's Coffee House. They expressed their confidence in the Bank Corporation, and agreed to receive its notes in payment."

This was an effectual mode of protecting the specie from being exhausted; and, accompanied by the "resolution" of the merchants and others, a less mischievous mode of meeting the difficulty than a pressure upon credit by a national bank, affecting the prices of commodities generally.

This was an effectual mode of preventing the bank being drained of its bullion or coin; would this, according to the modern theory, be called a scientific principle? If the impossibility of being drained of the bullion is the only test, this should surely be called a scientific mode.

This would hardly be contended for by the most ardent admirer of the present system; it would be acknowledged that it was a stratagem, an artifice, a discreditable mode of evading the payment of the notes. Is not every evasion a discreditable mode? The success of the plan will not justify it; any successful act of power, in spite of right or justice, may be vindicated on this principle.

Montesquieu observes, in his concise manner, (ch. xiii. liv. 5.,) "Quand les sauvages de la Louisiane "veulent avoir du fruit, ils coupent l'arbre au pied, 'et cueillent le fruit. Voilà le gouvernement des"potique." "When the savages of Louisiana want "fruit, they cut the tree at the foot, and gather the "fruit. Behold a despotic government."

The Bank of England may be said to exercise a despotic power, in case of need, over the trade of