efiance of any precautions which ingenuity could invent,
yet their effects were often aggravated by a state of currency, and a
facility of speculation like those produced by the existing issues of
paper. The small notes especially carried the consequences of these
changes among those on whom they pressed most severely. These notes
were chiefly in the hands of the labouring classes, and a few of them
constituted a poor man's fortune; consequently when a panic took place
he hastened to save his little store by withdrawing it from the banker.
As the alarm spread, the more wealthy imitated this example, and a
sudden run brought with it the downfall of the bank. From this he argued
that if these notes were replaced by a metallic currency, the security
of the banks would be ensured, and the misfortunes which their failures
would otherwise produce limited. This measure, he said, was not a
novelty, but had been the regular policy of the country; for an act had
been passed in 1775 prohibiting the tissue of bank-notes, and in 1777
another act had prohibited their issue under the sum of five pounds. The
chancellor of the exchequer argued that any apprehensions of injury to
commerce from the proposed measure must be founded upon this--that the
prohibition of small notes would diminish the circulation by the amount
of these notes; that their absence could not be supplied by gold; and,
that, therefore, manufactures and trade would, to this extent, be left
without their necessary and legitimate purposes. He went on to show that
these apprehensions were visionary; that the withdrawal of the small
notes, while it gave security to the bank which issued, and to the party
who held them, would not operate injuriously on the currency, or on the
trade and manufactures of the country. There were two ways, he said, of
effecting this withdrawal: one by enacting that no small notes should be
stamped after a certain period; the other by allowing those already in
circulation to run a certain course till a fixed period, and prohibiting
any new ones to be created. In three years the first of these modes
might lead to unsatisfactory results; for if the power of stamping were
to remain unlimited during that period, so considerable a number might
be stamped as to subject the country, in its ultimate endeavours to
get rid of them, to all its present evils. It was intended therefore
to propose, that no new notes should be stamped, and that those in
circulat