quences which they apprehended from a Loan of Three Millions; but without going to that extent, it afforded him an answer to the charge made against him, because the consequences attending the Remittances were totally different from thofe which it was fuppofed would attend the measure to which the Public objected.

He now came to the confideration of a queftion, infinitely more important in a national point of view; viz. how far the advances made by the Bank to Government, or the remittances made to Auftria, were the immediate caufes of those difficulties of the Bank which led to the Order of Council. As to the advances made to Government, the Honourable Gentleman had not stated how they would tend to drain the Bank of cash; but he fuppofed the Honourable Gentleman meant that it would have that effect by increafing the number of notes. In order to afcertain that point, it would be neceflary to afcertain how far the number of notes bore a proportion to the quantity of advances made to Government; he did not believe they did; and he would state one convincing circumftance to corroborate his affertion. In the year 1783, the amount of the advances made by the Bank to Government; varied very little from those made at prefent, and yet the number of Bank Notes were not any thing near what they were now. Nothing could be more decifive than this fact; because here were two periods in which the amount of the advances were the fame, and the quantity of the notes effentially different. He did not mean from this to infer, that the number of notes bore no reference to the amount of the advances, but that the one did not increafe in proportion to the other. Another point of view in which this was confidered was, that it obliged the Bank to diminish their discounts, and confequently tended to increafe the commercial diftrefs. He was fully able to difcufs this points, but it did not form the queftion then in difpute between them. The Report of the Committee did not ftate the amount of the Cafh and Bullion in the Bank; but he had ftrong reafons to fuppofe, that the advances had not, in any degree, affected the ftate of Cafh; so that, in every point of view, this argument fell to the ground.

He came now to a very important point, viz. the opinion of Mr. Giles, that if the advances had been re-paid to the Bank, the Bank would have been fafe. Upon this fubject he entreated the most serious attention of the Houfe. What was meant by their faying that the Bank would be fafe? Was it meant that they would be in a state of folvency, that they would wind up their affairs, and put an end to their functions? Surely it could not be meant in that fenfe; but whether it would be safe as the Bank, fafe as a great commercial body, fafe for all the purpofes

for

for which it was established. Was it meant that if the advances had been repaid, the Notes in which it was re-paid would be canciled, and no others iffued? But it must occur to every man that fuch a number of notes could not be withdrawn from circulation without the moft destructive confequences to the commercial intereft of the country, and producing a fcene of distress that must ultimately involve the Bank in ruin. Such an event would prove a molt fovere fhock to the circulating medium of the country. The Honourable Gentlemen had endeavoured to throw ridicule on the words "circulating medium;" if they meant to extend their ridicule to the reality expreffed by that term, they would bring us back again to the inconveniences of favage life; we must have recourse to barter. One of the strongeft diftinctions between a ftate of barbarifm and civilized fociety, was a well-regulated paper circulation founded upon a proportionate quantity of cath. But whether they called it a circulating medium, or a means of circulation, ftill it was clear that a certain quantity of circulation was neceffary, in proportion to the commerce of a country. If then a fudden fhock was given to that circulation by withdrawing a confiderable part of it, the confequence muft be, that commerce must be seriously affected, or elfe that circulation must be fupplied by other means. If, then, the circulation of paper was diminished, there must be a call for cafh. The void occafioned by fo fudden a fhock, must be fupplied in fome way or other : and if paper was withdrawn, the demand for cafh muft increase in proportion. This led him to another point, viz. how far a great circulation of paper had a tendency to caufe a drain of cash. No man who had at all confidered the nature of a paper circulation, would be ignorant that it was founded upon the existence of a proportionate quantity of cafh; but then the quantity of cash must not neceffarily be equal to the amount of the paper circulated upon it. It was known that a banker never kept fuch a quantity of cash in his house as would anfwer every poffible demand upon him, becaufe if he did, there would be an end of Banking. Men acquainted with the nature of the bufinefs, could eafily calculate the proper proportions between the quantity of cafh and of paper. There was no doubt but that, if a Banker was reduced to diftrefs from a number of notes coming in upon him, it would not be a wife expedient for him to increase the quantity of his notes. But if a Houfe was in complete poffeffion of public confidence, and there was a great demand for their notes, he was rather inclined to think that under such circumftances a farther emiffion of notes might be proper, and by filling up the void, prevent farther mischief,

Upon

Upon this point, experience at leaft was on his fide. There were periods at which the Cafh of the Bank was reduced lower than at the time when the Order of Council was iffued, and periods too, when no Foreign drain exifted, and yet at those times the Bank tried the experiment of increafing their Paper Circulation, and fucceeded. He came now to the question, of how far the Remittances to the Emperor had had the effect of producing the confequences which led to the Order of Council. In confidering this part of the fubject it would be a fufficient answer to fay, that there were a variety of caufes which might tend to the fame effect: because it was contended, on the other fide, that those Remittances were the immediate and exclufive caufe.

If he had fhewn that an increafed Capital, arifing from increafed Commerce, required an enlarged circulation---if he had fhewn that at the very time the Commerce was fo increasing, that the number of Country Bank Notes were diminished, and that there were drains upon the Bank from other caufes, it would, he hoped, at leaft induce the Houfe to paufe before they gave their fanction to the Refolution moved by the Honourable Gentleman. It was an opinion generally entertained by thofe who confidered the fubject fuperficially, that Foreign Remittances drew a great quantity of Cafh out of the kingdom. There were many fpeculative opinions entertained upon the subject of the Balance of Trade; but it was a point upon which he had great diftrust of all extremes of theory. The Honourable Gentleman had relied upon the authority of Adam Smith, an authority to which he was inclined in general to pay as much deference as any man; but upon this point he could not accede to his reafoning, for it feemed to have lefs of the folidity that belonged to fome of his pofitions, than of the ingenuity that belonged to all of them.

The Chancellor of the Exchequer then, in a most ingenious and able manner, difcuffed and refuted the argument of Dr. A. Smith, that an increase of exportation in time of war was not always to be confidered as a proof of real commercial profperity. There was one fhort line of reafoning, upon which the Honourable Gentleman feemed to rely with great confidence, viz. that' the Bank forefaw the confequences likely to enfue from the Remittances, and that their predictions had been verified. The Honourable Gentleman in the courfe of his Speech had pointed out the impropriety of taking any two circumftances, and making them, as it fuited the argument, alternately the caufe and effect.

He begged to take the benefit of the Honourable Gentleman's argument, and that when certain events happened which had been before predicted, they would inquire whether the events

happened

happened from the caufes which were pointed out in the prediction; and upon this part of the fubject it was neceffary to bear in recollection, that while thofe remittances were going on, the exchange turned in our favour; and that even the fending of 500,000l. which was voted at the commencement of the Seffion, and which was confequently publicly known, did not turn the exchange against us. It then became neceflary to fearch for other caufes of this drain, at home. When the Honourable Gentleman contended that this drain upon the Bank arose from fending money abroad, he was, to a certain extent, contradicted by the evidence before the Committee. It appeared that in January the Bank complained that there was a drain upon them; but did they attribute that to the fending money abroad? No; on the contrary they said it arofe from fending money to Ireland and to different parts of this country. But it would not be denied that the increafe of our commerce, of our agriculture, of our manufactures, muft require a confiderable increase of capital to fupport it.

There were other causes, but he would not detain the House by detailing them at prefent at more length. These were the grounds upon which he refted his defence; and to the judgment and impartiality of the Houfe he would cheerfully fubmit his conduct in this tranfaction.

Mr. Fox faid, that after the clear, perfpicuous, and eloquent fpeech of his Honourable Friend; after the unaniwered and unanfwerable arguments which he had urged, it would be improper to detain the Houfe long upon the fubject which was now before it. He fhould not therefore, he hoped, detain it long, while he made fome obfervations on what had fallen from the Right Honourable Gentleman, in á fpeech of great length, and confiderable labour. That labour had been much employed on doubtful points of theory, on which it was natural to expect fome difference of opinion; in points, many of which were against himself, and which he had in no inftance answered; in others, in which he had grounded his defence on an entire mifreprefentation of the evidence to which he had referred; and in many, in which he had made ufe of the moft forced and unnatural conftructions.

The Minister was accused of having been, in a confiderable degree, the caufe of the failure of the Bank, and that in a way to which he had not fairly adverted in the courfe of his fpeech. What was the misfortune chiefly complained of upon that head? That of the deftruction of public credit. What was the mode by which that deftruction was effected? It was by the notorious want of public faith in the conduct of the Minifter. That was

No. 37.

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the

the accufation of his Honourable Friend who brought this fubject forward. That was the accufation which the Minister had to anfwer. He defended himself by elaborate arguments, tending to fhew that his want of faith, or rather that the issues which he occafioned from the Bank, were not the exclufive caufe of failure there. That was never ftated to be fo. It was never pretended that other caufes would not have had a fhare in producing the effect. There were caufes which we could not prevent that might have contributed to the evil; but the Minister was not accufed on their account, he was accufed of only what he could have prevented, and what it was his duty to prevent.--There was no doubt but that the alarm of invafion had a confiderable fhare in caufing the drain upon the Bank. That alarm, perhaps, the Minifter could not prevent altogether, although, perhaps, it was an alarm which he might have diminished; but the charge against him was of another nature, a charge which, indeed, he had not anfwered. There was one part of the Minifter's argument which would be very convenient to him if the House gave it full credit. It was this, that if it could not be proved how much could be afcribed to each cause, it was unfair to blame him for that which had happened to public credit. In order to answer this he would obferve, it was fufficient to fay that much of the evil was owing to the conduct of the Minister, however other events might alfo have contributed a fhare in augmenting it. That fuch conduct had had that effect was evident from experience. We had known other alarms of an invafion, and yet the effect was not the fame upon the Bank as had been in the prefent cafe. But even fuppofing the conduct of the Minifter had not produced the evils which it actually did produce, yet still he would fay that his conduct was criminal upon the face of it, because it had a direct and obvious tendency to produce evil.

The charge against the Minifter was two-fold. First that he had caufed the Bank to make unfeasonable advances, and to an enormous amount, upon Treasury Bills. Upon this the Minifter defended himself by ftating that the Act of Parliament upon the authority of which this practice had taken place, was not a clandeftine Act of Parliament. We all know, that ftrictly speaking, there could be no fuch thing as a clandeftine law; that every body was bound to know it; that it was the duty of the Members of that Houfe to attend to and watch the progress of every Bill in that Houfe; but yet, speaking the language of practical common fenfe, it was well known that there were many things patted as bufinefs of courfe in that Houfe, to which the mass of the Houle were inattentive; nor could the Minifter blame them for being fo, fince he himself had stated, that in the multiplicity

of