at the very time when the means of discharging them have been rendered most difficult; the rapid diminution in the private bills put in circulation from the experienced impossibility of getting them discounted. The contraction of the currency on the part of the Bank of England, from July 1846, when it was £21,000,000, to September 1847, when it was only £17,840,000, was no less than £3,160,000. Including the simultaneous and consequent contraction by the country banks in Great Britain and Ireland, the diminution of the paper currency was above £5,000,000. But this, considerable as it is, was but a small part of the evil. The bills in circulation in Great Britain in 1839 were estimated by Mr Leathem, a most experienced Yorkshire banker, at £130,000,000. In 1845, it may safely be assumed that they had reached £160,000,000 or £170,000,000. Without a doubt this immense sum was reduced by at least a fourth, probably a half, from the contraction of the currency consequent on the Bank Act of 1844. It is this prodigious contraction, the necessary consequence of the banks having been rendered unable or unwilling to discount bills, which is the real cause of the present universal distress and general stoppage of all undertakings. And it was the more ruinous from the circumstance, that it occurred at the very time when, from the vast encouragement given by government to domestic railways by the bills they passed, and to foreign trade from the abolition by them of the main duties protective of industry, the nation was landed in transactions of unheard-of magnitude, and producing an unparalleled strain upon its metallic resources.

This last is a consideration of such paramount importance, that it is of itself adequate to explain the whole phenomena which have occurred; and yet, strange to say, it has hitherto met with very little attention either in or out of Parliament. The point to which we allude, and to which we crave, in an especial manner, the attention of the nation, is the progressive and now alarming disproportion between the money value of our imports and our exports which has grown up ever since Sir Robert Peel's tariff was introduced in 1842, and which has now, from the action of the free trade in corn, risen to such a height as to be absolutely frightful. The declared or money values of our total exports and

official value of our imports since Sir Robert Peel's tariff was passed in 1842, have stood as follows:

To give only one example of the way in which, under the system of free importation, the balance of trade has been turned against this country, we subjoin the official returns of the progress of our trade with America since Sir Robert Peel's tariff was introduced in 1842, and for five years previously. From that it appears that the trade with that country, which in 1830 was £8,000,000 on each side, has now so immensely changed, especially since the tariff of 1842, that, while our exports to it in 1845 were £10,000,000, our imports from it were £22,000,000 ! How was the balance of £12,000,000 paid? The answer is, in money; and that money it was which enabled them to conquer the Mexicans.

Sir Robert Peel says that the Americans have tried the system of paper money, and they have had enough of it. We thank the Right Honourable Baronet for having reminded us of this example of the effects of a contracted. currency. It appears that in 1836 the imports of English manufactures into the United States, official value, were £15,116,300. In the next year they were only £5,693,094 official value; and the declared or real value in that year was only £4,695,225; and the declared value of the imports from Great Britain in 1842 was only £3,528,807.* What occasioned this extraordinary defalcation we shall inform the Right Honourable Baronet. In spring 1837, the metallic system was introduced by General Jackson, then President of the United States, (by his refusal to take anything but specie in payment of government claims,) the country being at the time engaged in vast railway and other undertakings, with the concurrence and by the authority of government. Thence the prodigious falling off in the imports from this country, under which our own manufacturers * Parliamentary Paper, 30th July 1843.

suffered so severely, and from which they have scarcely yet recovered. Thence the destruction of three-fourths of the mercantile capital of the United States. May heaven avert a similar catastrophe, resulting from the same policy, in this country!

The causes, then, to which the present dreadful crisis is owing, are as plain as if the proofs of them were to be found in Holy Writ. We shall simply record what Sir Robert Peel and the bullion party have done for the last five years, and then ask whether under such a system it was possible a catastrophe could be averted.

In the first place, they introduced the tariff of 1842, which so materially diminished the duties on importation. in this country, and gave so great an impulse to the introduction of foreign articles of all sorts into the consumption of the people, as raised our imports in 1845 to £85,000,000, while our exports were only £60,000,000, exhibiting a balance of £25,000,000 against the country, which of course required to be paid in the precious metals.

Secondly, having established this great drain of nearly thirty millions annually on the metallic resources of the country, Sir Robert Peel next proceeded to pass the Bank Charter Acts, for England of 1844, and for Scotland and Ireland of 1845, which limited the bank notes of the empire, issuable on securities, to £32,000,000,* and enacted that for every note issued beyond that amount, a sovereign should be in the bank's strong-room to represent it.

Thirdly, having imposed these firm restrictions on the increase of the paper circulation, and left no room for an augmentation to meet the growing wants of the community but by an addition to the stores of bullion in the country, and compelled a proportional contraction of the currency when the bullion was withdrawn, the Right Honourable Baronet and his Administration next passed railway bills to the amount of above £150,000,000 sterling, the works to be executed in the next three years, and gave every facility to the

undertaking of such projects, by lowering the deposits required from ten to five per cent on the estimated cost of the undertakings.

Fourthly, when the strain on the metallic resources of the country was beginning to be felt, from the immense balance of thirty millions in our commerce against us, and the calls on railway shares were becoming considerable, the Right Honourable Baronet next, as a permanent system, not an extraordinary remedy to meet a temporary disaster, introduced a free trade in grain, which was immediately applied by his successors to sugar. He thus sent thirty-three millions, in gold and silver, abroad in fifteen months. The consequence has been that the imports of the empire have become nearly double its exports in money value; that a balance of above £30,000,000 has this year been sent abroad in payment of articles of import; that the sums paid for grain alone in the three months immediately following the finest harvest on record, have exceeded £14,000,000 ; that nearly all the railways in the country have been stopped from the necessary contraction which, under the existing law, this export of specie occasioned to the currency; that distress of dreadful magnitude pervades the mercantile and manufacturing classes; and that our exports have fallen off at the rate of a million a-month, and our revenue above six millions a-year.

Such are the principles and results of that splendid combination effected by modern wisdom-FREE TRADE AND A FETTERED CURRENCY. And as these results flow naturally and necessarily from the principles put in practice, it is evident that they may be expected in a less or greater degree to be permanent, so long as these principles regulate the policy of government.

Suppose a general at the head of one hundred thousand men were to double, by orders issued or licenses granted from headquarters, the distance to be marched, and the work done by the men, and at the same time to establish a system which sent half the commissariat stores out of the camp,what could be expected from such a policy but starvation, discontent, and ultimate mutiny among the soldiers? Or suppose a master-manufacturer, as a great improvement ou the machinery of his mill, were to introduce a system which

abstracted the oil in proportion to the quickened movement of the wheels, or diminished the moving power in proportion to the increase of the work to be done,-what could be expected from such a change, but that the machine would stop when it had most work to do? And yet is not a currency, and a sufficient currency, as necessary to an industrious nation as food to the soldier, or coals to the steam-engine, or oil to the wheels? Can we be surprised that such a system, when applied to a nation, terminated in disappointment and ruin? But one result of inestimable value has followed from its adoption; it is in periods of suffering that truth is learned, because the consequences of error are experienced. It is now seen what the true principles on the subject are, because the effects of the opposite principles have been demonstrated. With truth may it be said, that Sir R. Peel is the philosopher who HAS INSTRUCTED US IN THE CURRENCY."

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It is the same thing, it is often said, whether we send specie or manufactures abroad in return for imports of our own creation; for specie is not the growth of this country, and it could only have been brought here in return for some produce of ours previously exported. The common sense of mankind, founded on experienced suffering arising from the abstraction of specie, has ever repudiated this doctrine of the schools; and present experience has amply demonstrated that, how specious soever it may appear, there is some fallacy in it. Nor is it difficult to see what that fallacy is. If we send manufactures abroad in exchange for specie, we make a fair exchange; for it is not the growth of this country. But if, having got the specie, we send IT abroad again, instead of manufactures, to buy food,-we have only one export of British produce to set off against two imports of foreign. For instance, if we send £5,000,000 worth of manufactures to South America to buy that amount of specie, it is a fair exchange, and there is no unfavourable balance established against us. But if, having got the £5,000,000 worth of specie, we again send it to North America for grain, which is imported into this country, instead of sending £5,000,000 worth of manufactures, we have, on the whole, only exported £5,000,000 worth of manufactures for £10,000,000 worth of produce, bullion