Paris and to those parts where the greatest distress had been felt "

"You have stated that you attribute the present high price of gold above the Mint Price, and the unfavourable state of the Exchange, to the excessive issues of the Bank of England, influencing thereby the general paper circulation of the country; have you any other reason for deeming the issues of the Bank of England to be excessive, except that indication which you collect from the price of gold and the state of the Exchange?"

"I never saw these effects produced by any other cause in any country in the world"

"Is the Committee to understand your opinion to be, that a high price of gold and an unfavourable state of the Exchange ought, in the discretion of the Bank of England, to lead to a reduction of their issues until that high price of gold or unfavourable state of Exchange is reduced, if not to par, to that price above par which amounts to the expense of transfer of the precious metals from one country to the other"

"I am decidedly of that opinion"

"Is the Committee to understand you to be of opinion that that is the true criterion for the Bank to look to, whether the Bank be open or shut?"

"It is, in my conception, the only criterion"

"I consider the same doctrine to hold good in the case of war as well as of peace'

"You are of opinion that the partial openings of the Bank failed in effect, because the Bank did not simultaneously contract their paper issues, and not because a partial opening would in no case have any effect whatever?"

"In my view of the subject, a partial opening will always fail unless the whole Currency of the country be previously reduced in amount, so as to restore it to the standard of the Metallic Currency thus partially issued "

"Of that restoration, you are understood to admit no other test than the favourableness of Exchange and the reduction of the price of gold to the Mint Price?"

"If we reduce the amount of our paper circulation sufficiently

the precious metals would flow into the country from every direction-no Act of Parliament could stop the current "

"I should consider it a breach of contract for the Government of this country to alter the Mint Price of gold"

This witness entered into numerous details in support of his opinions, which would be too long to insert here

116. Mr. William Ward, a Bank director, a cambist, and Mediterranean merchant. Lords' Committee, p. 60

"You have stated that a reduction of four millions in the amount of Bank Notes in circulation would probably produce a favourable turn in the Exchanges; do you found such an opinion upon reasoning, or upon having observed, as a cambist, that the diminution or increase in the numerical amount of Bank Notes has usually produced corresponding effects upon the Exchanges, and the price of gold in this country, since the Bank restriction?"

"I ground my opinion upon reasoning; I do not rely upon the numerical amount of Bank Notes exclusively"

"Can we confidently depend upon the effect of a reduction of Bank Notes towards producing a favourable Exchange?"

"I would rely upon it in an Exchange transaction where my own interest was at stake"

(To the Commons' Committee, p. 73)

"To what extent do you conceive the rate of Exchange and the price of gold are affected by the issue of Bank Notes ?"

"I conceive they are affected to a very considerable extent, directly or indirectly"

66

Supposing the other causes which affect the Exchange to operate equally at two different periods, do you think the price of gold, and the rate of Exchange, would be the criterion by which you might judge the adequate or excessive issue of Bank Notes ? "

"Yes, I do"

"Under a system of cash payments, do you believe that the Market Price of gold will ever be permanently above the Mint Price, or the rate of our Foreign Exchanges more below par than would amount to the expense of the transmission of gold from this country to the Continent?"

"No; the Market Price would not exceed the Mint Price permanently"

"Then, would the Bank ever have occasion to pay more than the Mint Price for the gold they purchase?

"I conceive they would not have to pay more "

117. Mr. Samuel Thornton, Bank director for thirty-nine years. Commons' Committee, p. 85

"In regulating the amount of their issues, by what principle is the conduct of the Bank of England guided?"

"I have always considered it my duty to consider the amount of the Notes out, and what could be the cause for a call for an increase. I also felt it my duty to look at the state of the Foreign Exchanges and the price of bullion"

"Have the goodness to state your reason for thinking it desirable to take into the account the rate of Exchange, and the price of bullion, in regulating the amount of the issues?"

"It must be obvious that if there were an excess of Bank Notes beyond what was required by the trade of the country, the price of bullion would thereby be raised; and I am ready to admit that it would have the same effect upon the Exchanges"

118. Mr. John Irving, of the firm of Reid, Irving, and Co. Commons' Committee, p. 94

"Putting out of consideration the embarrassment of trade, which might be occasioned by a limitation of the issues of the Bank, do you think it is in the power of the Bank, by such limitation, to restore a favourable rate of Exchange, and to reduce the price of gold?"

"I am of that opinion"

"Could such fluctuations take place if we possessed a metallic Currency, as the measure of our Exchange with foreign countries ?"

"Certainly not"

119. Mr. Holland, a partner of Baring, Brothers, and Co. Commons' Committee, p. 114

"In what degree do you consider that the Foreign Exchanges

are affected by the increase or diminution of Bank of England paper ?"

"I certainly consider that the Foreign Exchanges are affected by the increase of Bank of England paper"

"Do you think a considerable reduction of the amount of Bank of England paper would have the effect of restoring the Exchange in favour of this country, and of preventing a very considerable depression?

"That is my opinion

66

As you

consider there would be no great fluctuation in the price of gold, supposing the circulation of this country to consist of coin, or paper convertible into coin, to what do you attribute the present fluctuations ?"

"The quantity of paper in the market is greater than the market can bear. If it is thought desirable to reduce the price of gold to £3 178. 104d., I conceive that that can only be done by a reduction of the paper

"You have stated that action and re-action will bring Exchanges round, and bring gold to its level; if that is the case, in what way can you account for the circumstance that the coin has, from the beginning of his present Majesty's reign, constantly found its way out of the country, and not found any re-action to bring it back again?"

"If the Market Price of gold is higher than the Mint Price, it is impossible to keep it in the country"

"Would you not think one of the circumstances that would render the Exchanges unfavourable to this country, and raise the price of gold above the Mint Price, to be an unfavourable state of things in this country, or, in other words, a balance of payments against the country?"

"No I do not; because I should call gold the general leveller between all commercial nations, and that it invariably brings back the Exchanges to their proper level, taking gold against gold, as the standard of value

"If the Bank of England paid in specie upon demand, do you believe there ever could exist, for any length of time, a material difference between the Mint and the Market Price of gold?"

120. Mr. Thomas Tooke. Lords' Committee, p. 168"By what means do you think that the Exchanges could be restored, and the price of gold reduced?"

"By keeping down the Bank issues of their notes to their present amount, and judging, by the course of Exchange and of the bullion market, how far any further reduction might be necessary to acomplish that object "

"What do you mean by our circulation being at a level with that of other countries?

"When the price of bullion and the Exchanges combined are at, or within a trifle of, par "

"Do you consider a favourable course of Exchange as an indication that there is not an excess of paper issues?"

"If that state of Exchange is of any considerable duration, it affords a presumption that the issue has not been excessive during that period, but the only undeniable test is the price of gold being that into which the paper is convertible"

"It appearing by accounts before the Committee, that from the 13th April, 1804, to the 17th November, 1805, being eighteen months, that the Market Price of gold was uniformly £4, and that during the same period of eighteen months the course of Exchange was uniformly in our favour, are you of opinion that during that time there was an excess of paper issued ?"

"Upon the whole I should answer in the affirmative as I have before said that I consider the price of gold to be the only unerring test, and that the Exchanges, even for moderately long intervals, afford only a presumption

"State the ground upon which you consider the price of bullion as a surer test of the question of the excessive issue of paper, than the course of Exchanges?'

"Because, if the coin be perfect, and the paper strictly convertible into that coin, there cannot be any inducement to any individual (the Bank issuing the paper excepted) to give more than £3 178. 10d. per oz. for gold of the same standard, while the Exchange may be influenced by several circumstances, within the limits in time in which, and of expense at which, the coin could be brought from one country to the other. The Exchange may therefore fluctuate, while the price of gold remains stationary"

"Do you mean by an excess of paper issued, not an excess