Persons travelling on the Continent, or going to our colonies in America, or the East Indies, would derive very considerable advantage from the plan of security notes. Instead of selling out stock to obtain bills or letters of credit, which cannot be done without loss of the interest of money, at least during the voyage, they night leave their funds well secured at home, and probably sell their notes at a considerable premium when they arrived, as remittances to England. For instance, in Jamaica, bills on England are generally at a premium of from ten to fifteen per cent., and are not made due till ninety days after sight, consequently, nearly five months must elapse before they are paid. A gentleman leaving London in April with 1000l. in notes, secured on stock, the dividend on which becomes due at Midsummer, instead of Bills or Letters of Credit, probably arrives in June, sells his notes, than which a more secure remittance cannot be obtained, at a high premium, they being payable at sight instead of three months after, and gets his dividend on his stock to Midsummer. The difference to bim between this mode and bills taken from London, would be from 40l. to 50l., besides having the opportunity of keeping his money at interest in the English stocks, if he should not have occasion to use his notes in Jamaica.

There can be no doubt but these notes would be bought up with avidity in all the British colonies, particularly if some regulation were made by which the purchaser would be entitled to the future interest accruing on the stock. It seems evident that such regulations would enable the colonists to realise, without risk, their property in England, which at present, for those in India particularly, is frequently difficult, expensive, and hazardous.

It was at first my intention to have gone much more into particulars, and not only to have detailed every circumstance which I conceived necessary for carrying such a plan into immediate and complete execution, but to have enumerated the many other momentous advantages which in my view would accrue to the nation and the public in general from its adoption: however, upon reconsideration I am of opinion that the Sketch I have given is sufficient to show the possibility of remedying the evil, and in some degree rendering that very considerable proportion of the capital of the kingdom, which has been borrowed for the use of the state, and consequently withdrawn froin Agriculture, Manufactures, and Commerce, still available for public accommodation, by renewing, through its means, the "grand wheel of circulation," which, from the rottenness of its materials, has been rapidly decaying, and has now hardly more than one cog left that can be depended upon.

Few persons commence business in any way without a great

proportion of borrowed capital; but the State, as I have before observed, has borrowed nearly all that is to be lent; and therefore, till something be done to release, or render it available to the enterprising, ingenious, and industrious, there will be the less chauce of our manufacturers being able, as formerly, to undersell in foreign markets, or our agriculturists to increase the produce of the land now under cultivation, or extend their exertions to the MANY MILLIONS of uncultivated acres capable of giving employment and subsistence to the immensely increased, and still increasing, population of the empire.

As the Author means to pursue the subject occasionally (if it be necessary) till this or some better plan, for the security and accommodation of the country, shall have been universally adopted, he will be thankful for any hints or information that he may be favored with; particularly, as to the present state of banking in the different towns; what places stand in most need of solid banking establishments; the causes and effects of the failures that have taken place; and indeed any communications that may serve for a History of the Provincial Banking System: which may be addressed free of postage.

It has been estimated, that since the commencement of the war with France, in 1798, country bankers, and other petty issuers of local notes, have failed for the amount of at least THIRTY MILLIONS STERLING, a sum nearly as great as the whole secure circulating medium of the country used to be, previously to that period. It should be recollected that "those bloodsuckers" had absorbed most of the gold currency that used to circulate in the country, by substituting their small notes, many years before gold became scarce in London, or the Bank of England suspended cash payments, and began to issue one and two pound notes. There are the strongest grounds for believing that these measures would never have become necessary on the part of the Bank, had not the small country notes been thus substituted for gold and silver, in almost all parts of the kingdom, excepting London and its immediate vicinity.

Had the Bank been, obliged to continue replacing the drain of the precious metals, occasioned by such bankers, it must soon have exhausted its coffers, and been ultimately reduced to as insolvent a state as most of them, by being obliged to purchase bullion at 20 or 25 per cent. above the Miut price, to supply coin which would have disappeared as soon as issued.

It seems impossible that a currency of gold and silver should be maintained in any country where specious adventurers may, through the folly or infatuation of the public, be suffered to substitute for it their insecure promissory notes. It would appear, therefore, that the Bank of England

cannot, with safety to itself, or benefit to the nation, resume payments in cash, till such a reformation takes place in the system of provincial banking, as will give that paper a palpable security.

That there are in the kingdom many solid private banking establishments, conducted by men of great opulence and probity, is very certain, and these persons could be put to no material inconvenience by giving their notes the evident and tangible security so desirable.

They cannot be making greater interest than may be obtained in the Public Funds, of the money which their notes represent, without employing it, hazardously in trade, usury, or speculation of some kind, and if they do this, it must be evidently at the risk of those who possess their paper. The measure proposed will, therefore, form a test of solvency and prudence, adding at he same time to the respectability and consequence of those who adopt it, and affording just grounds for suspecting the solidity of those who do not.

At His late Majesty's accession to the throne there was gold in circulation

From the year 1760 to 1773, there was coined

From 1773 to 1777

From 1777 to 1778

£. 25,000,000

10,000,000 20,447,002 33,831,236

£. 89,278,238

In place of the much greater part of this immense sum, in the precious metal, the country possesses nothing but the notes of private bankers, bearing no other evident security than their 'promise to pay.' The increase in the circulation of the Bank of England notes has borne no proportion to the abstraction of the gold currency, for of the 25 millions of those notes now out, only the 9 millions of 17. and 27. notes can be said to stand in the stead of the gold; consequently it is most evident, that it is the country paper that has so injuriously displaced the coin-injuriously, it must be acknowledged, as long as that medium possesses no other security than it has hitherto done, when it is considered that the failures have on an average amounted for many years past to upwards of a million a year.

Note (B.)

"To restrain private people, it may be said, from receiving in payment the promissory notes of a banker, for any sum, whether great or small, when they themselves are willing to receive them; or, to restrain a banker from issuing such notes, when all his neighbours are willing to accept of them, is a manifest violation of that natural liberty which it is the proper business of law not to infringe but to support. Such regulations may, no doubt, in some respect be considered a violation of natural liberty. But those exertions of the natural liberty of a few individuals, which might endanger the security of the whole society, are and ought to be restrained by the laws of all governments, of the most free, as well as of the most despotical. The obligation of building party-walls, in order to prevent the communication of fire, is a violation of natural liberty, exactly of the same kind with the regulations of the banking trade which are here proposed."

66 A paper money consisting in bank-notes, issued by people of undoubted credit, payable upon demand without any condition, and in fact always readily paid as soon as presented, is, in every respect, equal in value to gold and silver money."-A. SMITH'S Wealth of Nations, vol. i. p. 489.1

APPENDIX.

Abstract of a Bill to authorise Bankers, in England and Ireland, to issue and circulate Promissory Notes, secured upon a Deposit of Public Funds, or other Government Securities. 10th April,

1818.

The Preamble of the Intended Act stated, that, Whereas the Circulation of Promissory Notes, by Bankers in England and Ireland, the Payment whereof shall be secured on the Deposit of Property vested in certain Public Stocks or Funds, or other Government Securities, will be highly beneficial to the internal Trade and Commerce of the Kingdom:

And whereas by an Act passed in the Seventeenth year of the Reign of His present Majesty, intituled, "An Act for further restraining the Negotiation of Promissory Notes and Inland Bills of Exchange, under a limited Sum, within that part of Great Britain called England," the Negotiation of Promissory Notes and Inland Bills of Exchange in England, for Twenty Shillings and under Five Pounds, is restrained, in manner in the said Act provided:

And whereas by an Act made in the Thirty-seventh year of the Reign of His present Majesty, the said recited Act of the Seventeenth year, so far as the same relates to the making void, or to the restraining the publishing or uttering and negotiating of Promissory Notes, Drafts or Undertakings in writing, payable on demand to the Bearer thereof, for any Sum less than the Sum of Five Pounds in the whole, was suspended for the period in the said Act mentioned:

And whereas the period of such Suspension was by an Act passed in the Fifty-sixth year of His Majesty's Reign, continued until two years after the expiration of the Restriction upon Payments in Cash by the Bank of England;

That after a time to be fixed, the Restriction of 17 G. 3, c. 30, shall be repealed, as to all Notes under 57. issued under the Authority of this Act, in manner and under the Regulations hereinafter mentioned, by Bankers duly licensed or registered according to Law.

That Bankers desirous of issuing Notes secured on their Property, vested in certain Public Funds, may apply at the Bank of England or Ireland, or South Sea House in London, to transfer such Funds to the Commissioners for the Reduction of the National Debt; and thereupon, and upon such Banker or Bankers transferring such Stocks, Funds or Annuities, or any part thereof, in the Books of the Governor and Company of the Bank of England, or Bank of Ireland, or South Sea House, respectively, into the names of the said Commissioners for the Reduction of the National Debt, in a special Account to be opened at the said Banks and South Sea House respectively, for the purposes of this Act, it shall and may be lawful for the Governor or Deputy Governor of the Bank of England or Ireland, or South Sea Company, for the time being, respectively, and they are hereby respectively authorised and required, to grant a Certificate to the Banker or Bankers, or other Person or Persons making such Transfer, directed to the said Commissioners for the Reduction of the National Debt (and which Certificate shall be also according to a Form which shall be established by the said Governor and Company of the Bank of England, Ireland, and South Sea Company, respectively, and shall be the same in all cases,) and such Certifi cate shall state, that the Person or Persons therein mentioned, hath or have transferred the Stocks, Funds or Annuities, therein described, to the said Commissioners for the Reduction of the National Debt, for the purposes of this Act.

That the Commissioners for the Reduction of the National Debt shall establish Offices or appoint Agents in London and Dublin for the purposes of this Act, and keep proper Books, &c. there for the purposes of This Act, and relating respectively to the several Stocks, Funds or Annuities, or other Government Securities, to be transferred or deposited for the purposes of this Act.

That on production of Certificates of Transfer of Stock at such Offices, the Sums so transferred shall be placed to the account of the Proprietors in the Books of the Commissioners.

That after a date to be fixed, Bankers may deposit Exchequer or Treasury Bills with the Commissioners for the Reduction of the National Debt, for the purpose of issuing Notes on the Security thereof, and that the said Commissioners shall, upon such Deposit, or Assignment, write or cause to be written into the Books of the said Commissioners for the Reduction of the National Debt, to be kept at such Offices for that purpose, the Principal Sums specified and contained in all and every such Exchequer or Treasury Bill or Bills so deposited or assigned, in the name or names, or to the account of the Party or Parties depositing or assigning the same; and every Deposit and Assignment of such Bills shall be made in