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public economy, by mild and slow operations. Only a decided, prompt, and radical measure can relieve a country sinking under an increasing depreciation. In 1804, the new notes lost 25 per cent. compared with the currency in which they were payable; the notes of the old bank were at a discount of 45. In October, 1813, the depreciation was such, that 1800 crowns in paper were offered for one crown of silver!

Bank of Russia.-Russia, too, has her paper money. On the 29th of December, 1768, the empress Catherine, at the commencement of the war against the Turks, established the Bank of Assignats, designing to issue notes of bills payable to bearer. In the manifesto, these notes were declared, in general terms, and very indistinctly,' to be payable in current money. This doubt, however, was soon dispelled. In the first months of their issue, it was ascertained that they would be discharged in copper only, in imitation of the bank of Stockholm. But this was as impossible as it was improper. The value of copper was too small and too variable, and the difficulty of its transportation rendered it impracticable for this purpose. Only gold or silver could be the standard. The notes, therefore, soon ceased to be notes of credit, and became merely a state paper money. This paper money, however, by its convenience, the moderation of the government in its issue, and the regulation, that it should be received instead of specie in all the government treasuries, bore a value above its nominal par with silver. In the first eighteen years, only 40,000,000 (equivalent then to nearly L. 5,000,000 sterling) were in circulation, and no note for less than twenty-five rubles, or about L. 5, at the exchange of that time. This limitation of quantity, with the real advantages of paper currency, made the assignats só agreeable to the public, that, until 1788, they preserved an agio, or premium, of five per cent. above copper money,

and silver had not more than three per cent. premium in its favour. In 1774, at the peace of that date, paper was on a par with silver,

In 1786, the empress created a loan bank, and increased the mass of assignats to 100,000,000, engaging to carry it no farther; but the wars with Turkey, Sweden, Poland, and Persia, occasioned the failure of this engagement in the year 1790. At her decease, in 1796, the assignats in circulation amounted to about 160,000,000 of roubles.

This increase was too great and too sudden, and necessarily led to depreciation. In 1788, paper was at discount; in 1795, it had sunk nearly one-third, and metallic currency had disappeared so much the more, because paper notes of 10, and of 5 roubles were issued, and all payments made in paper or copper.

The progress of the depreciation will be rendered more evident by the following statement, which we extract from another part of M. Storch's work.

Account of the number of paper assignats in circulation in Russia, from 1786 to 1814, inclusive, and of the variations in their value, as compared with silver.


Annual Emissions
of Paper Roubles
or Assignats.

Total Paper Rou-
bles in Circulation.

Mean value
of the Silver
Rouble in

Mean value of the Assignat in Silver.



Copecks. Copecks. 1786 40,000,000 40,000,000


98 1787 60,000,000 100,000,000 103

97 1788 100,000,000 108

926-5 1789 100,000,000 109

91 3-4 1790 11,000,000 111,000,000 115

87 1791 6,000,000 117,000,000 123

81 1-3 1792 3,000,000 120,000,000 126

79 1-3 1793 4,000,000 124,000,000 135

74 1794 21,550,000 145,550,000 141

71 1795 4,450,000 150,000,000 146

68 1-2 1796 7,703,640 157,703,640 142

70 1-2 1797 5,871,200 163,574,840


79 1-3 1798 31,356,765 194,931,605 137

73 1799 15,068,395 210,000,000 148

67 1-2 1800 2,689,335 212,689,335 153

65 1-2 1801 8,799,000 221,488,335 151

66 1-4 1802 8,976,090 230,464,425 140

71 2-5 1803 17,160,240 247,624,665 125

80 1804 13,033,885 260,658,550 126 79 1-3 1805 31,540,560 292,199,110 180

77 1806 27,040,850 319,239,960 137 73 1807 63,089,545 382,329,505 148

67 1-2 1808 95,059,075 477,368,580 186

53 3-4 1809 55,832,720 533,201,300 224

44 2-3 1810 43,798,700 577,000,000


33 1-3 1811 577,000,000 394

25 2-3 1812 577,000,000 379

26 3-5 1813 577,000,000 397

25 1-5 1814 377,000,000 397

25 1-5 Since the peace, the Russian government has made every possible exertion to lessen the quantity of paper money. From a report of the finance minister, M. Gourieff, dated 9th April last, it appears that about 118 millions of assignats have already been withdrawn from circulation, and it is estimated that in the next two years, an additional 100 millions will be cancelled. This has been partly effected by funding the assignats, and partly by exchanging them at certain rates for gold and silver roubles, of which there has been of late a very extensive coinage. In consequence of the diminution of their number, the relative value of the assignats has advanced considerably; and the paper prices of all commodities have proportionally declined.

Bank of England. It will be seen from this sketch, of the history of the principal continental banks, that their connection with their respective governments has been the radical defect of their constitution, and the real cause of the various disorders we have thus briefly detailed. The lending of large sums to government, is a transaction altogether incompatible with the real nature of banking, and which could not fail to prove fatal to any company who were obliged to pay their notes on demand. If previously to a loan being made to government, the currency was sufficiently abundant, and paper on a par with gold, it is obvious that the additional supply of paper thus thrown into the market, would sink its value, and there would be a run on the bank for gold for exportation. Thus circumstanced, unless the bank had immense surplus funds, which it could easily convert into cash, or bullion, it would stand an extreme risk of being obliged to stop payment, and would, at all events, suffer considerable embarrassment and difficulty.

If a considerable amount of paper had been borrowed by government from a bank on long credit, without supposing its issue to have been in excess, it might, nevertheless, expose the establishment to great hazard. In the case of either real or imaginary dangers, arising from political or other causes, a run is always made on the banks; and if their funds are locked up, or not available, the consequences must inevitably prove fatal.

Circumstances of this nature, caused the crisis of 1797, and the restriction act. The issues of the bank of England were not at that time superabundant, for there was no excess of the market above the mint price of gold. The run was entirely owing to political causes, and would soon have subsided, had the directors been able sufficiently to control their issues, or had their paper been only issued to private individuals, from whom, in the course of sixty days at farthest, they would have received payment. Their capital, however, and several millions of their notes, having been lent to government, they could not recover payment of either the one or the other. The beggarly importunity of the ministry had emptied their coffers, and multiplied their notes—increased their debts, and lessened their means of payment. It was then owing,' says Mr. Ricardo,' to the too intimate connection between the bank and government, that the restriction became necessary; it is to that cause, too, that we have owed its continuance.'

The late reports of the bank committee, afford the most convincing proof of the accuracy of this statement. From 1790 to 1797, when the restriction act passed, the amount of the advances made by the bank to government, and of the notes outstanding, on the 25th of each year, was: Bank Notes.

Advances. 1790 10,217,360

7,908,968 1791 11,699, 140


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Bank Notes.






11,718,730 The amount of the advances of the bank to government, on the, 20th of February, and 2d of August, each year, since 1814, and of the bank notes issued during the corresponding half years, is reported by the commons committee as follows: Bank Notes.

Advances. 1814. Jan. to June 25,511,012

Feb. 26. 1814 23,607,300 July to Dec. 28,291,832 Aug. 2. 34,937,800 1815. Jan. to June 27,155,824 Feb. 26. 1815 27,156,000

July to Dec. 26,618,210 Aug. 2. 24,079,100 1816. Jan. to June 26,468,280 Feb. 26. 1816 18,988,300

July to Dec. 26,681,398 Aug. 2. 26,012,600 1817. Jan. to June 27,339,768 Feb. 26. 1817 25,399,500

July to Dec. 39,210,035 Aug. 2. 27,330,718 1818. Jan. to June 27,954,558 Feb. 26. 1818 27,002,000 July to Dec. 26,487,859

Aug. 2.


Feb. 11. 1819 21,930,000 The circumstance of the public creditors, being obliged to receive payment of their dividends in bank of England paper, has, since the epoch of the restriction, rendered it nearly as compulsory as that of any of the continental states. That it has not been equally depreciated, is to be ascribed entirely to its being liable to have its concerns inquired into by parliament, and canvassed by the public. We trust, however, that this ruinous connection between the bank and government is now about to be dissolved; that in future, the directors will be compelled to regulate their issues by reference to a fixed standard, and not according to their varying whims and caprices; and that they will no longer have it in their power to play at fast and loose with all the property in the kingdom.

Like the bank of Venice, the bank of England owed its origin and its privileges to the distresses of government. It was founded in 1694. The original capital was only L. 1,200,000, mortgaged to government for an annual interest of L. 100,000. In a year or two afterwards, its capital was increased to L. 1,400,000. In 1700, the bank obtained from parliament an assurance, that, during the continuance of its charter, no similar charter should be granted to any banking company established in England; and in 1708, it was enacted, that no more than six persons should be capable of entering into any association or copartnership, for the purpose of carrying on the trade of bankers. This most impolitic regulation has not hitherto been repealed. The capital of the bank of England now amounts to L. 11,686,800, lent to government at an interest




of 3 per cent. and payable at the expiration of the charter. The bank notes in circulation, on the 26th of August, 1818, amounted to L.28,087,865, and on the 11th of February, 1819, to L. 23,028,820. In 1790, the bank had gold coin and bullion in its coffers of the value of L. 5,619,000; but on the 26th of Febuary, 1797, the epoch of the restriction, this supply was reduced so low as L. 1,272,000. We do not know that an account has been published of the amount of cash and bullion in the bank at any subsequent period.

View of some of the leading points of difference in the situation of Great Britain, in the years 1797, (when the bank restriction act was passed,) and 1819.

Jan. 1797. Jan. 1819.. Annual net revenue,

L. 18,737,760 L. 49,549,899 Interest of public debt,

11,844,407 29,068,137 Sinking fund,

2,338,984 14,726,039 Outstanding exchequer bills,

13,218,600 43,655,600 Unfunded debt,

5,248,932 1,677,125 Outstanding credits due to the bank of England,

39,096,900 Exports,

30,518,000 53,559,711 Imports,

23,186,000 36,900,681 Circulating gold coin,

30,000,000 Bank of England notes,

8,640,250 25,956,840 Country banks,


750 To which may be added an increase of population exceeding one million and a half.


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ART. IV.-British Finunces. A BSTRACT of the net produce of the revenue of Great Britain,

in the years and quarters ended 5th July 1817, 5th July 1818, and 5th July 1819; distinguishing the consolidated fund, the annual duties, and the war taxes, and also distinguishing the customs and excise.

Revenue distinguishing the consolidated fuod, the annual duties,

Years ended 5th July. and the war taxes.




5,367,836 7,898,556 7,347,081 Excise,

17,072,066 17,627,354 19,115,307 Stamps,

6,030,997 6,443,763 6,308,177 Post-office,

1,360,000 1,333,000 1,401,000 Assessed taxes,

5,933,664 6,169,009 6,184,410

1,187,413 1,163,621 1,172,184 Miscellaneous,

258,688 517,669 320,561 Unappropriated war duties, 1,417,755 22,235 216,447

Land taxes,

Total consolidated fund,

38,628,419 41,175,212 42,065,167

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