exist as a nation responsible to itself, which has contracted an increased debt of many hundred millions mainly with its own subjects; the interest of which is to be raised by the public out of the prices of these commodities, which prices the scarcity of money, by increasing its value, has been the principal cause of sinking more than one third. And how, under this vast increase of interest, and this vast fall in prices, is this to be done? - This is the pinching question. How are rents, and taxes, and wages, and labour, and poor-rates, to be raised out of these commodities, and paid by the public, unless they be reduced one third, if that one third will do? And, if the taxes be reduced one third, whilst the debt has been doubled, how is money to be raised from commodities sufficient to pay, beside government expenses, the public creditor?-Impossible: unless in the consideration that money, by its present scarcity being increased one third in value, he will be content with two thirds of his dividend in money: for two pounds will now buy more than three would lately do. If so, the difficulty is removed at once. Sufficient taxes can be raised to pay the interest.

It may be hence apparent, to what a weighty consideration the national debt is grown in all financial concerns of this country: and it may be hence concluded, that there ought to be at all times a full proportion maintained between the quantum of currency and the quantum of debt; in order that the interest may continue to be fully paid.

This is the first object of political economy to which ministers should at this time pay their main attention : and, if they can manage this point well, they need not employ themselves in inventing new taxes or increasing old ones, which will only increase the evil; nor puzzle themselves among their petty objects of finance : nor need they so much depend upon those systems of economy and retrenchment, which, however necessary and expedient, will be slow in their operation, and bring with them only a partial and ineffectual relief. This is a subject, which, however plain, ministers either do not understand, or to which, however important, they do not give their attention.

Such is the nature of the difficulty; and the great question remains, By what remedy is this difficulty, which portends to the community not a little inconvenience, if not some danger, to be managed or overcome? Temporary expedients will do little. Trifling measures will only trifle with the nation. No Mississippi project, or South Sea bubble, will cure the evil. A complete an adequate and a substantial remedy should be effectually applied.

Currency, as it flows through a vast agricultural and commercial country, is analogous to blood in the human body; the one being as requisite to the health and prosperity of the one, as the other of the other. As there may be too much blood in the body, particularly by too rapid an increase; so there may possibly be too much currency in the nation, particularly of paper too rapidly increased; as was supposed to be the case by the bullion committee some years ago, when it was proposed, on this account, that the restriction on the Bank of England should be taken off. The persons, however, who were concerned upon that occasion, and who argued on the same side of the question upon different grounds, were bewildered in their subject like men in a mist: at which we need not so much wonder; since Mr. Locke, with his luminous mind, when employed to write upon money, was, as experience has since proved, like one groping in the dark.

Had the bullion committee made the Bank of England do its duty to the public, as a return for its enormous gains, by producing large coinages in gold and silver; so that it could make its payments good in specie as well as in paper, the bullion committee would have proved a vast friend to the nation. But the Bank proved an overmatch for the committee; and unfortunately this was not accomplished. And this not being accomplished, fortunately nothing was determined so as to be publicly acted upon: for had the Bank restriction been then taken off without a vast increase of coin, and a limit been put to the further issue of its paper; and had not large issues of paper also been made by many private banks throughout the kingdom, the business of the nation engaged in war could not have gone on either at home or abroad, for want of currency. The taxes could not have been raised from the price of commodities, as we at present find. Loans and subsidies and armies could not, consequently, have been sent abroad: nor government expenses and bank dividends have been paid at home. This, experience, which is wiser than committees, proves at the

NO. XIV.

Pam.

VOL. VII.

2 G

present time: for even now, in the midst of peace and plenty, the functions of the whole nation are embarrassed for want of a sufficiency of money in its circulation; as those of the human body, however vigorous, would be by a stagnation of its blood.

It is manifest, therefore, both from a view of the past, and a sense of the present, experience; that the difficulty does not consist in there being too much, but too little, money; for now in the midst of peace, when one might expect all difficulties to vanish; by the alarming fall in the price of all commodities, this difficulty has increased, and may not even now be at its height; and unless it be relieved by some speedy and effectual remedy, it may grow into an absolute impossibility: for, if money, instead of increasing, should continue to diminish in quantity, as it has lately done, all the commodities of the nation will not, in their reduced prices, raise money enough for the expenses of government, the maintenance of the poor, and the interest of the debt. Farmers, merchants, and tradesmen will become paupers in the midst of plenty; and landlords will not be long behind them. Property will be unhinged; its possessors confounded, and the equilibrium of things will be destroyed: and all this in the midst of peace and plenty, for want of a sufficiency of money in circulation to work the national machine, loaded as it is with an enormous debt.

Money, comprehending both the kinds, is a thing too little understood by political economists, in its national operation and effect. It is a thing very different in its nature and existence from all those commodities out of which national taxes are raised and paid; though the necessary and established means by which all this business must be done. Commodities are things of absolute and substantial worth, annually or periodically produced by agriculture and manufactories, and annually or periodically consumed; and 'they are incapable of being increased beyond a certain limit. Money, on the contrary, is a thing only of relative and representative worth; not so annually or periodically produced and consumed, nor confined in its increase to any certain limit. But, however different in their worth, in their nature, and in their extent, money being the universal medium by which all commodities are bought and sold in the public market, and by which their prices are ascertained; it has gained an influence upon these prices

according to the quantum of its currency. Hence, however different money and commodities may be, by their necessary interchange in the market, they come into a connection by which their quantities operate reciprocally upon each other. When the quantity of the one is the greater, it requires the less of the other in the change and vice versa. When the quantity of commodities is much, the demand is little, and of course the price in money and when the quantity of money is much, the demand is little, and of course its value in commodities. If the quantity of commodities be small, and that of money proportionably great, the commodities will fetch a great price: and, if the quantity of money be small, and that of commodities proportionably great, the commodities will fetch a small price. Thus the relative price or value of each depends upon their respective quantities: and by increasing the quantity of the one, the price of the other is decreased. Hence it comes to pass, that the value or price of money being decreased by the increase of its quantity, it bears a less proportion to the value of things. But, at the same time that the quantities of money and commodities operate thus reciprocally or rather reversely upon each other, there is this great and important difference between them: that the quantity of commodities is, from their nature, consumable, and confined within a certain limit; but that the quantity of money is, from its nature, not so consumable, and, that it is capable of being increased to an unlimited extent. And here is the great advantage, which the nation ought to take in relieving itself under the burden of its debt; viz. By increasing the quantity of money in circulation, the prices of commodities would be proportionably increased; out of which the national taxes and imposts would be raised with ease for the payment of the interest and national expenses. And, what is of still further consideration, as the capital itself of the debt, however great, is a certain sum, not of commodities, but of money which is capable of unlimited increase in quantity; so, By increasing that quantity, to whatever extent, the relative value of that capital will be thereby virtually and proportionably reduced.

And, when the value both of the capital and of the interest of the debt is thus reduced, and the value of all commodities, to which they have a standing relation, is thus increased by higher

prices in the market; the general result will be the easiest, the safest, the truest, and the only effectual method to overcome its weight. All other means have been, and will be, in a great measure useless.

This is the grand advantage which the country enjoys, under all its burdens: and if this advantage, by adequate expedients, be not improved in time, under these burdens it must sink, from the weight of its debt, in the midst of peace and plenty, into a bankruptcy.

At this critical conjuncture, two desiderata are wanted to meet the exigencies of the present times-an increase of money or currency of both kinds to a great amount, and an increase of revenue. And, if an expedient or expedients can be invented, which will provide for the first desideratum, and at the same time contribute towards the second; such expedient or expedients may deserve the attention of ministers, and the adoption of the legislature.

The great expedient will naturally be the increase of coin, the first kind of money or currency: and a proportionable increase of paper, the second kind, will naturally follow.

I. The Bank of England, however high in its credit, is not a national bank: from the public advantages however which it enjoys, it ought to be at all times at the expense of national coinages. This is a thing understood by the public, and expected by the community. Though only a chartered corporation of individual members, it has increased its opulence and the value of its stock to a great amount, from the enjoyment of special privileges for many years; and more particularly of late, by the restriction upon its payments in coin by act of parliament: in consequence of which, it has made additions to its paper issues, and greatly enriched the holders of its stock. From all these great profits derived from the public, the public has a fair right to expect, nay to demand, that the Bank of England, so favored and indulged, should make it a very liberal return by a new and extensive coinage; in consequence of which it will be warranted in making a still more extensive issue of its paper: so that its coin and paper, by maintaining a just proportion between them, may have a favorable operation upon the exchange with other countries, and also upon the price of bullion.