Page:The Real Cause of the High Price of Gold Bullion.djvu/43

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issue, which cannot profit and may be destructive; and certain infallible tests, by which the proportion bf the supply of currency to the wants of the market, may be known, adjusted, and balanced.

This system of circulation has been how in operation for 22 years, and has enabled us to meet, and overcome, every embarrassment and difficulty which continually endangered the community, with the most complicated aggravation of pressure within and without, nearly throughout the whole period; and the system has so faithfully discharged its office, that the Pound Bank Note, which was at first issued as equivalent to the Gold Sovereign, preserved its relative value so strictly that the Pound Bank Note, the Gold Sovereign, and Gold Bullion of equal weight to it, were almost at the same price in the market in 1815 and 1816, as when the System begun,—which affords a complete demonstration, that the variations in the price of Gold Bullion during the war, did not originate in any depreciation of the Bank Note; for if that had been the case, and depreciation had originated from the quantity of Bank Notes in the market, the depreciation would have increased as the quantity of Bank Notes increased, and when the quantity was the greatest, the depreciation would have been also the greatest, which is the reverse of the fact.

It is still, however, conceived by some, that the present system is vicious, by excluding Coin from common currency, and by the Bank Note not being immediately convertible into Coin, and by the excess of issues which it is said has taken place, and the consequent depreciation of Paper, notwithstanding demonstration to the contrary.

Let us then examine the process which is to be taken for reviving our former convertible system.