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MONTHLY RETROSPECT of PUBLIC AFFAIRS; OK, The Christian s Survey of the Political World.
Note: This text has been automatically extracted via Optical Character Recognition (OCR) software. The text has not been manually corrected and should not be relied on to be an accurate representation of the item.
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Note: This text has been automatically extracted via Optical Character Recognition (OCR) software. The text has not been manually corrected and should not be relied on to be an accurate representation of the item.
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( 597 )
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A RETURN to peace , the state for which rational being's are formed , and which it is a main object of the gospel to produce , changes greatly the appearance of the political world . The mind of the politician is relieved from the disgusting * occurrences occasioned by war ; but at the same time , the evils that it has produced will engage greatly his attention . It mast necessarily
have introduced a great change in the moral system ; and they who have been engaged in the havock o > f war , cannot easily bring * themselves to tlie useful occupations of peace , Each country has its peculiar difficulties to encounter , and in our own , one of a very alarming nature has presented itself , which may require all the skill and prudence of the legislature to get the better of .
It is now many years since the pernicious system was introduced by Mr Pitt , of substituting- a paper for a metallic currency . This was done by prohibiting * a banking company from paying its own notes in specie , and making those notes the current payment for all other notes of the different banking companies in the kingdom . The
^ consequence was , that gold disappeared , silver was raised in nominal value , and tokens were issued by the bank to represent the silver coinage of the country . The plan was very simple ; the bank originally issued notes , promising- to pay on
demand the sum in sterling * money , mentioned in the note , and at the origin of this company , from the natural fear of havinga run upon it , care was taken to insure a supply of cash by a small premium to persons to produce it on due notice .
On a sudden appeared the fatal order in council , under the auspices of Mr . Pitt , and of course not without due representation from and consultation with the bank , that it should no longer be answerable as usual for its notes ; and instead of
payingthe holder of a note of a hundred pounds on demand , all that it would do was to break this note for him , and to give him in exchange other notes , with the same promise to pay on demand the smaller sums , which together made up the original note tendered for payment .
The natural result of this measure was a prodigious rise in the nominal value of bank stock , and a very great increase in its half-yearly dividends to its proprietors . In fact , the latter was a uecessary conse - quence of the former , provided the country was satisfied with the new arrangement . The bank was now enabled to extend its discounts almost without limit , and the vvhole commercial vvorld lay at its mercy .
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It might be presumed , that the bank had nothing to do but to coin bank paper upon any purpose in which money was wanted ; but it is said that this was never done , and a note was never issued but in exchange for the paper of a merchant , whose credit was established , or upon other deemed good security .
Thus , if a merchant stood in need of ten thousand pounds for a present -payment , and bad good bills of two uionths'date , these were presented to the bank , which advanced the ten thousand pounds , on receiving bills , which at the end of that time brought home to the bank ten thousand
pounds in its bills , and also the amount of interest for the sum advanced for that time . Thus in every six months was a return made to the bank of notes above those advanced , which being divided among the proprietors , paid off their dividends in whole or in part , or , being withheld , made
a fund for new advances . This , of course , was a very gainful traffic . Besides this , it advanced to government its bills , for which it received in return exchequer bills , carrying an interest ; and , besides , it had in circulation an immense quantity of notes
on which , not being obliged to keep gold in reserve to answer the demand , the gain was very great bnth as capital , for which no interest was paid , and also as a gainful capital by the destruction of many of these notes by fire or other accidents .
It is no wonder then , that the gains of the bank were greater , probably , than those ever made by a similar institution . Its concerns became more and more implicated with those of government , which at last was in the situation of an heir borrowing * money of his steward . It is ready to pay
in cash the moment its demands on government are settled , but when that time will coine remains very problematical . Such a change in the affairs of a country could not be without some necessary results . A government may do what it
pleases in its own realm , but its laws do not bind other countries ; and it was soon found that a bank pound was very different from a sterling * pound , or to use the vulgar language of the times , the guinea was raised in value . Tfiis was a
misnomer ; the guinea was not altered , but the things given in exchange , for it were altered ; and when a pound note and six shillings was the usual value of a guinea , it was only saying- that the bank note did not stand , as it did , before , for twenty twenty-one parts of a guinea , but for a much less sum . Hence naturally arose a change in the value of all commodities ,
Monthly Retrospect Of Public Affairs; Ok, The Christian S Survey Of The Political World.
MONTHLY RETROSPECT of PUBLIC AFFAIRS ; OK , The Christian s Survey of the Political World .
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Citation
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Monthly Repository (1806-1838) and Unitarian Chronicle (1832-1833), Sept. 2, 1818, page 597, in the Nineteenth-Century Serials Edition (2008; 2018) ncse.ac.uk/periodicals/mruc/issues/vm2-ncseproduct2480/page/61/
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