CORRESPONDENCE AND REMINISCENCES,

REGARDING FINANCE, CURRENCY, AND COMMERCE.

THESE three branches of politics are most intimately connected. The financial resources of a country greatly depend upon its commerce; and commerce can never be permanently prosperous without a judicious system of currency and finance. These subjects, on which so many volumes have been written, are evidently too vast and important to be treated of in the section of a work. Some hints, however, regarding them, and letters in which they are discussed, may be submitted to the reader's consideration.

1.-FINANCE.

Towards the close of the American war, Lord Stair, Dr Price, and a number of other persons of note in the political world, maintained, that the finances of this country were ruined; and that the nation must soon become bankrupt. To remove such gloomy apprehensions, I published, in 1783, "Hints on the State of our Finances," in which the alarming

doctrines inculcated on that subject, were so successfully refuted, as to produce the most beneficial consequences both at home and abroad.

I was afterwards led to engage in a still greater undertaking of a financial nature, namely, "The History of the Public Revenue of the British Empire," in 3 vols. 8vo. This work met with a very favourable reception at home, a third edition being printed in 1803-4; and abroad, the opinion entertained of it was in the highest degree flattering, as appears from the following extracts from a work, entitled, "Essai sur le Credit Commercial, consideré comme Moyen de Circulation. Marniere. A Hambourg, et à Paris, An. ix. (1801).”

Par J.

In the preface the following paragraphs occur: "L'Histoire de Revenu Public, et du Credit de la Grande Bretagne, par Sir John Sinclair, presente le vaste tableau, de toutes les operations de finances, que le Gouvernement Anglois a faites depuis un siécle, dans le genre des emprunts, et dans celui des impositions; et l'auteur en demontre les avantages, ou les inconveniens, sans se laisser jamais égarer par des idées systematiques, ou des opinions de parti."”

"La traduction de cet ouvrage manquoit à la France: il ne suffisoit même pas de le traduire; il étoit nécessaire, pour le rendre aussi utile, qu'il doit être de le continuer jusqu'à ce jour; et Sir John Sinclair, se bornant à presenter des exemples et des leçons de pratique, il falloit encore rapprocher, sous un même coup d'œil, les resultats des diverses operations, dont il donne le detail, et les comparer aux ressources qu'ont employées d'autres nations, pour établir, sur des bases certaines, les principes de la science des finances, et ne fonder jamais la théorie, que sur l'expérience."

The following paragraphs are extracted from the essay it

self:

"L'Histoire des Finances de la Grande Bretagne, par Sir John Sinclair, m'a presenté la réunion de tous ces avantages:

elle en offre un plus rare encore chez cette nation. La plupart des Anglois, qui ont écrit sur la politique, dirigés par l'esprit de parti, ont mis l'exaggeration de faits et le sophisme, à la place de l'exactitude et du raisonnement, et ont souvent propagé des erreurs dangereuses, en lieu d'enseigner des verités utiles. John Sinclair ne merite presque jamais ce reproche: il est ennemi du principal ministre ; et cependant, il le critique rarement, et ne le critique qu'avec sagesse."

"Son ouvrage forme, sans contredit, le plus grande récueil des faits interessans, sur les finances, qui existe en Europe."

"L'Histoire du Revenu Public de la Grande Bretagne, par John Sinclair, est trop connue pour que je m'arrête à en faire l'éloge; je me contenterai de dire, qu'elle donne le detail de toutes les operations de finances, que la nation de l'Europe, qui a sçu procuré à l'état le plus grand revenu, et le plus grand credit, a faites depuis un siécle, et que l'auteur en montre les avantages ou les inconveniens par des observations, dont la sagesse et la sagacité justifient sa grande reputation."

Upon sending M. Marniere's work to Robert Walsh, Esq. a most intelligent native of America, who happened to be in Edinburgh in December 1808, he wrote me a letter, on the 18th of that month, of which the following is an extract:

"I thank you sincerely for the brochure you sent me, (a copy of M. Marniere's tract). The language of the translator, on the subject of his original, is but an echo to the voice of Europe. I have heard more forceful encomiums pronounced by the Abbé Morellet."

In the History of the Revenue, I have drawn up a review, of Mr Pitt's financial administration *, in which it is remark

It is printed in the History of the Revenue, 3d edit. vol. ii. p. 126.

ed, that, whether we consider the immense sums levied by the various taxes,-the greatness of the public expenditure, -the magnitude of the loans borrowed,—or the variety of new measures which were brought forward, it is an era, which certainly contains more interesting, and extraordinary particulars, connected with questions of revenue, than ever occurred in the annals of any other country, more especially during so short a period; and though, in many respects, the measures which the Minister proposed might be questioned, yet it was impossible not to admire the splendid talents that produced them, and the superior powers of eloquence, and dexterity in debate, with which they were defended. Mr Pitt was thus enabled to overcome difficulties, from which most other men would have shrunk.

On two of those subjects, namely, "The income-tax,” and "The redemption of the land-tax," I took an active part in the debates *. But the utmost exertions of the nation to raise a revenue, adequate to the necessities of the times, would have been in vain, had not the bank restriction taken place, and the country been thus fortunately emancipated from the oppression of a metallic currency. The superior value of that great truth in politics was then ascertained, "That though the introduction of the precious metals, for the purposes of money, ought to be considered as one of the most important steps towards the improvement of commerce, and the arts of civilised life, (and, it should have been added, to the procuring of an immense revenue), that had ever been found out, yet it was no less true, that with the advancement of knowledge and science, we discover, that it would be another improvement, to banish those metals again from the employment to which, during a less enlightened period, they had been so advantageously directed †, and to substitute paper in their room.”

The speeches delivered on these occasions are printed in the History of the Revenue, vol. ii. p. 232 and 266. '

↑ Ricardo's Proposals for an Economical and Secure Currency, p. 24.

2. THE CURRENCY.

The establishment of a paper circulation in England was certainly one of the most important events recorded in history. When that event took place, in 1797, the crisis of our public affairs was in the highest degree gloomy and appalling. The gigantic confederacy against France had crumbled away. A rebellion, organized with unprecedented art, was bursting out all over Ireland. The pride and safeguard of Great Britain, her Navy, was in a state of mutiny. The metropolis of the empire was blockaded by her own fleets at sea, while the seeds of sedition were industriously sown on shore. The price of the funds, that great barometer of public credit, had fallen below all precedent, and, amidst this multiplicity of aggravated perils, the unrivalled credit of the Bank of England was so shaken, that it was compelled to implore protection.

In this disastrous dilemma, necessity constrained us to try an experiment, which, previous to this extraordinary epoch, would have been deemed the very climax of folly; namely, to employ paper money as an universal medium of circulation, independent of the precious metals. There was nothing to aid, and, on the contrary, there were many things likely to frustrate the successful introduction of such a currency. But no sooner had specie ceased being paid at the Bank of England, than the nation, instead of falling into utter ruin, as had been confidently predicted, rose triumphantly over all its difficulties; and such a degree of energy and strength was given to our productive powers, as enabled us to subsidize all the nations of Europe at one period, and to resist and conquer them at another. The continuance of that system, with the improvements of which it was susceptible, were alone required, to render us the greatest and happiest country that ever existed.

But we are told that the subject was thoroughly investigated by respectable and intelligent Committees of both Houses,