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happen； and though it is a situation in which their own
indiscretion has involved them； it would be desirable； if
possible； to protect them against the consequences of it。
If the same benefits to the public；…the same security against
the depreciation of the currency； can be obtained by more gentle
means； it is to be hoped that all parties； who agree in
principle； will concur in the expediency of adopting them。 Let
the Bank of England be required by Parliament to pay （if
demanded） all notes above 2ol。…and no other； at their option；
either in specie； in gold standard bars； or in foreign coin
（allowance being made for the difference in its purity） at the
English mint value of gold bullion； viz。 3 l。 17s。 10 1/2d。 per
oz。； such payments to commence at the period recommended by the
Committee。
This privilege of paying their notes as above described might
be extended to the Bank for three or four years after such
payments commenced； and if found advantageous； might be continued
as a permanent measure。 Under such a system the currency could
never be depreciated below its standard price； as an ounce of
gold and 3 l。 17s。 10 1/2d。 would be uniformly of the same value。
By such regulations we should effectually prevent the amount of
small notes necessary for the smaller payments from being
withdrawn from circulation； as no one who did not possess to the
amount of 20 l。 at least of such small notes could exchange them
at the Bank； and even then bullion； and not specie； could be
obtained for them。 Guineas might indeed be procured at the Mint
for such bullion； but not till after the delay of some weeks or
months； the loss of interest for which time would be considered
as an actual expence； an expence which no one would incur； whilst
the small notes could purchase as much of every commodity as the
guineas which they represented。 Another advantage attending the
establishment of this plan would be to prevent the useless
labour； which； under our system previously to 1797； was so
unprofitably expended on the coinage of guineas； which on every
occasion of an unfavourable exchange （we will not enquire by what
caused） were consigned to the melting pot； and in spite of all
prohibitions exported as bullion。 It is agreed by all parties
that such prohibitions were ineffectual； and that whatever
obstacles were opposed to the exportation of the coin they were
with facility evaded。
An unfavourable exchange can ultimately be corrected only by
an exportation of goods； … by the transmission of bullion；or by a
reduction in the amount of the paper circulaiion。 The facility
therefore with which bullion would be obtined at the Bank cannot
be urged as an objection to this plan； because an equal degree of
facility actually existed before 1797； and must exist under any
system of Bank payments。 Neither ought it to be urged； because it
is now no longer questioned by all those who have given the
subject of currency much of their consideration； that not only is
the law against the exportation of bullion； whether in coin or in
any other form； ineffectual； but that it is also impolitic and
unjust； injurious to ourselves only； and advantageous to the rest
of the world。
The plan here proposed appears to me to unite all the
advantages of every system of banking which has been hitherto
adopted in Europe。 It is in some of its features similar to the
banks of deposit of Amsterdam and Hamburgh。 In those
establishments bullion is always to be purchased from the Bank at
a fixed invariable price。 The same thing is proposed for the Bank
of England； but in the foreign banks of deposit； they have
actually in their coffers； as much bullion； as there are credits
for bank money in their books； accordingly there is an inactive
capital as great as the whole amount of the commercial
circulation。 In our Bank； however； there would be an amount of
bank money； under the name of bank…notes； as great as the demands
of commerce could require； at the same time there would not be
more inactive capital in the bank coffers than that fund which
the Bank should think it necessary to keep in bullion； to answer
those demands which might occasionally be made on them。 It should
always be remembered too； that the Bank would be enabled by
contracting their issues of paper to diminish such demands at
pleasure。 In imitation of the Bank of Hamburgh； who purchase
silver at a fixed price； it would be necessary for the Bank to
fix a price very little below the mint price； at which they would
at all times purchase； with their notes； such gold bullion as
might be offered to them。
The perfection of banking is to enable a country by means of
a paper currency （always retaining its standard value） to carry
on its circulation with the least possible quantity of coin or
bullion。 This is what this plan would effect。 And with a silver
coinage； on just principles； we should possess the most
economical and the most invariable currency in the world。 The
variations in the price of bullion； whatever demand there might
be for it on the continent； or whatever supply might be poured in
from the mines in America； would be confined within the prices at
which the Bank bought bullion； and the mint price at which they
sold it。 The amount of the circulation would be adjusted to the
wants of commerce with the greatest precision； and if the Bank
were for a moment so indiscreet as to overcharge the circulation；
the check which the public would possess would speedily admonish
them of their error。 As for the country Banks； they must； as now；
pay their notes when demanded in Bank of England notes。 This
would be a sufficient security against the possibility of their
being able too much to augment the paper circulation。 There would
be no temptation to melt the coin； and consequently the labour
which has been so uselessly bestowed by one party in recoining
what another party found it their interest to melt into bullion；
would be effectually saved。 The currency could neither be clipped
nor deteriorated； and would possess a value as invariable as gold
itself； the great object which the Dutch had in view； and which
they most successfully accomplished by a system very like that
which is here recommended。
The End