When the Government found its account in making the Bank a passive political machine, it was to be expected, in the natural course of things, that some corresponding advantages would accrue to that institution by way of consolation and recompense for its abandonment of the duties it owed the country, as the standard organ of a comprehensive and independent commercial community. The means at hand for this purpose being so very cheap and convenient, our only wonder is, that they were not more quickly resorted to than they appear to have been. Once the power to issue notes of all denominations became unlimited; it is rather surprising that it was not at once exercised to the enormous extent it afterwards reached. The suspension of cash payments necessarily led to a paper substitute for guineas; and the Bank of England, which, down to 1759, had issued no note under 201., when ten-pound notes first came out, followed by five-pound notes in 1793, brought one-pound and two-pound notes into use in March, 1797. It is good, says the proverb, to make hay while the sun shines; and so, ere long, said and acted the directors of the Bank of England. In this spirit they ran a race in money-getting, such as never had been run before in this or in any other country. They augmented the circulation of their notes, and extended their discounts by marked stages soon after the Restriction Act passed. The average annual issue of their notes swelled from above ten millions, the amount in 1797, to above twelve in 1798; to fifteen in 1800; to above sixteen in 1802; to above nineteen in 1809; to upwards of twenty-three in 1810; to upwards of twenty-six in 1814; and to upwards of twenty-eight1 millions in 1817.

In discounts, the same liberal practice, at once so cheap and profitable, was also freely indulged in. Before the Restriction Act, the amount of bills of exchange under discount at the Bank did not average ten millions a quarter; but by 1803 they ranged above thirteen, and in 1810 touched twenty millions a quarter !

Immense profits flowed from business conducted upon this large scale. In 1781 the dividend on bank stock was at the rate of six per cent.; in 1792 it was seven per cent.; but in 1799, only two years after the exemption from specie payments, the proprietors were gratified by a bonus of no less than 1,164,000l., which was made two millions and a-half within seven years. In 1805 their dividends were twelve per cent., which seems to have been thought too dangerous an evidence of prosperity, for in two years only ten per cent, was given. But this partial reduction was more than compensated in 1816 by a bonus of near three millions. Nor did the dividend fall below ten per cent. per annum so long as cash payments were avoided, after which eight per cent., and later still seven per cent. has become the annual rate.

1 The Bank of England had the enormous sum of 30,099,908l. of notes out at one time in the year 1817.

While the Government was thus enabled to lavish an unprecedented expenditure upon the prosecution of foreign wars, and the Bank, by way of consideration for the support it gave the minister in this wild career of extravagant ambition, was in the full enjoyment of the license to manufacture money as fast as it pleased, it will be readily supposed that persons were found in abundance who maintained that the country had never before been so flourishing, and that the system was the perfection of prosperity. Some facts of a contrary import were overlooked by these calculators. Our annual taxation, which had been little more than sixteen millions in 1791, just previous to the first French revolutionary war, which superinduced our paper system, exceeded in 1815 seventy-one millions; while the amount of the national debt, which in 1790 was 228,231,228l., was in 1815 848,248,000l.

These are astounding sums, and as the particulars of the account have been compressed into a short compass, I shall insert a few to show that the sketch I have drawn has not been too highly coloured.

During the first French war, distinguished as the war of the Republic, the following loans were contracted:

During the second French or Bonaparte war, the loans were as follow:

The following summary of the profits derived by the Bank of England from 1797 to 1817 was produced before the Lords' committee during the latter year, upon the resumption of cash payments:

I shall give one more short illustration of the state of the currency antecedent and subsequent to the restriction of cash payments, and then take my leave of the matter finally. In 1790, the Bank, paying in gold, had a circulation exceeding ten millions, and a stock of eight millions and a half in bullion. In 1815, specie payments having been suspended for upwards of twenty years, the average circulation of the Bank was 26,888,432l., and its total highest amount of coined and uncoined bullion, 2,161,000l.

Passing from this, the Bank and Government side of the question, on which the eye is bewildered by the fairy picture of never-ceasing means and ever-extending resources, and where the money-making appetite did grow on that it fed on; and turning to the country at large, - to the state of its manufactures, agriculture, commerce, prices, and foreign exchanges, - we find a marked and deeply painful contrast. It was easy to change the paper-currency of the realm, - a sheet of paper and a dip of ink in the pen of a clerk in the privy council sufficed for that purpose. That humble instrument and simple process sufficed to place the monetary system of Great Britain at the disposal of twenty-four indivi-. duals, in a great measure self-elected to their office, and mainly influenced in it by self-interested motives; it sufficed to frank these individuals with the privilege of turning slips of printed paper, value five shillings per quire, into notes of the value of as many* hundreds or thousands as they, on the spur of cupidity or caprice, might choose to fill them up; it sufficed to make this paper the exclusive mode for paying the revenue of the kingdom at large and the interest of the public debt; it sufficed, in short, to bring it into universal use: but it did not suffice to change the nature of things; and it could not give either cabinet ministers or Bank directors a power to sustain the value of these notes by any other process than their true relation to the gold and silver they purported to represent.