The first presumes, that the Bank Note will be always convertible into Coin, at the option of the holder, though it is evident that only one half of the circulating medium is actually represented by gold. The last presumes, that the Paper Currency, as long as it circulates, will keep that value in the market it was originally issued to represent, though not actually convertible, at pleasure, into its archetype; and that, should the Currency, by any fatality, cease, all the outstanding Notes will be ultimately paid, in real value, by the property and funds of the Bank, and the funds of Government, which are pledged for their amount.
The danger, which was supposed to attend the former system, was from the disproportion which might arise between its component parts, by which the advantages held out from its power of augmenting the amount of currency, was compromised and lost,—whilst the advantage of the present system is, that being unattackable by distress within or danger without, it can be adjusted to all the ordinary demands of peace, and all the extraordinary demands of war; and the only danger attributable to it, is depreciation by excess of issues.
We examined the controul on the former system, and found it vicious: let us examine the controul on the present system, and see whether it be either vicious or inadequate.
1. The Bank, which issues the currency, cannot, by any possibility, force any of its Paper upon the market.
2. It never makes an issue but upon a previous demand: and the Directors have the eyes of the Nation and Parliament upon them, always watching their conduct, as well as their own interests to guard them from indiscretion.
3. It charges an advance of 5 per cent. upon all