that they would accept bank of England notes.

Committees of both houses of parliament reported that the bank was in a
thoroughly stable condition, and, after much debating, during which Fox
asserted that Pitt deserved impeachment for defrauding the public
creditor, a bill was passed on May 3 prohibiting the bank from issuing
cash, except in sums below L1, until six months after the end of the
war. Cash payments were not resumed until 1819. A fair, though
constantly decreasing amount of gold remained in circulation for some
years, and was supplemented by the issue of one pound notes. The bank
was moderate in its issues, and, except in 1800, there was no
appreciable difference between the value of its paper and gold until
1808. The government was undoubtedly justified in saving the bank from
the effects of panic. Whether the suspension should have been continued
after the restoration of public confidence is another matter. It was
continued chiefly because it enabled the bank to make large advances to
government without incurring a drain of bullion. Currency was at once
expanded, and Pitt obtained a new loan of L14,500,000; it was raised
mainly in the 3 per cents., and created a debt of L175 for each L100
cash. Pitt therefore paid, including the provision for long annuity, at
the rate of L6 7s. per cent. The imperial loan of L1,620,000 was raised
on even more onerous terms.

[Sidenote: _BATTLE OF CAPE ST. VINCENT._]

In the midst of anxiety and financial depression England was cheered by
a great naval victory. France called on Spain to form a junction of
fleets. It was the old idea of 1779 when the two Bourbon powers were to
destroy the channel fleet and lay England open to invasion. The Spanish
fleet, twenty-seven ships of the line, under Admiral de Cordova, sailed
from Carthagena for Cadiz on February 1. Jervis was then cruising off
Cape St. Vincent, and before dawn on the 14th he received tidings that
the Spaniards were near. He had only fifteen ships of the line, but his
squadron was in splendid order, and among its commanders were Commodore
Nelson and Captains Collingwood, Troubridge, and Saumarez. The Spaniards
were eager to get to port, and ten of their ships were far ahead of the
rest on the leeward side. He made for the gap and attacked the main body
of seventeen ships, keeping the nine lee ships (one had got away) in
check meanwhile. After some cannonading and manoeuvring the Spaniards
attempted to join their