treat them with the management of
a preparatory and gradual introduction to an unpleasing report: that it
is the _only substantial_ information he shall have to convey in that
letter." In confidence, therefore, of their fortitude, he tells them
without ceremony, "that there will be a necessity of making a large
reduction, or possibly a _total suspension_, of their investment;--that
they had already been reduced to borrow near 700,000_l._ This resource,"
says he, "cannot last; it must cease at a certain period, and that
perhaps not far _distant_."

He was not mistaken in his prognostic. Loans now becoming the regular
resource for retrieving the investment, whose ruin was inevitable, the
Council enable the Board of Trade, in April, 1781, to grant certificates
for government bonds at eight per cent interest for about 650,000_l._
The investment was fixed at 900,000_l._

But now another alarming system appeared. These new bonds overloaded
the market. Those which had been formerly issued were at a discount; the
Board of Trade was obliged to advance, therefore, a fourth more than
usual to the contractors. This seemed to satisfy that description of
dealers. But as those who bought on agency were limited to no terms of
mutual advantage, and the bonds on the new issue falling from three to
eight, nine, and ten per cent discount, the agents were unable to
furnish at the usual prices. Accordingly a discount was settled on such
terms as could be made: the lowest discount, and that at two places
only, was at four per cent; which, with the interest on the bonds, made
(besides the earlier advance) at the least twelve per cent additional
charge upon all goods. It was evident, that, as the investment, instead
of being supported by the revenues, was sunk by the fall of their
credit, so the net revenues were diminished by the daily accumulation of
an interest accruing on account of the investment. What was done to
alleviate one complaint thus aggravating the other, and at length
proving pernicious to both, this trade on bonds likewise came to its
period.

Your Committee has reason to think that the bonds have since that time
sunk to a discount much greater even than what is now stated. The Board
of Trade justly denominates their resource for that year "the sinking
credit of a paper currency, laboring, from the uncommon scarcity of
specie, under disadvantages scarcely surmountable." From this they value
themselves "on having effected an