CHAP. XL.

GEORGE III. (CONTINUED.)-1797.

General state of the nation-Stoppage of cash payments at the Bank-Ministerial and parliamentary measures thereon-Consequences-Mutiny among the sailors-Agitation in Ireland-Motions respecting the same in the two houses-Motions for the dismissal of ministers rejected-Mr. Grey's motion for parliamentary reform-Proposal for inquiry into the state of the nation-Marriage of the princess royal-Session terminatesFrench expedition to the coast of Wales-State of the enemy's navy-Battle of Cape St. Vincent-Expedition against Teneriffe-Attack on Santa Cruz-Capture of Trinidad, and failure against Porto Rico-Admiral Duncan's victory off Camperdown-General thanksgiving-Military affairs in Italy-Buonaparte crosses the Tyrolese Alps, and advances near to ViennaArmistice of Leoben-Revolt of the Venetian states, and consequences-Dissensions in the government at Paris-Conduct of Napoleon-Re-establishment of the directory by the military -Circumstances leading to the treaty of Campo FormioPacific arrangements-State of Europe-Renewal of pacific negociations between England and France at Lille-Reasons for its failure-Napoleon returns to Paris-The directory wishes him to attempt the invasion of England-He sees the folly of such a plan, but resolves on an expedition to EgyptMeeting of the British parliament-King's speech-Retirement of opposition members from the house-Address to the kingIncreasing popularity of ministers-New financial schemeStrongly opposed by opposition-Mr. Nicholls's speech-Minister's scheme is carried-Voluntary contributions to the defence of the country-Death of the king of Prussia-Congress of Radstadt-Release of La Fayette by Austria.

THE sentiments of parliament on the state of public affairs, at this time, were far from being general throughout the country instead of acknowleging signs of national prosperity, a large portion of the people shrunk from the immense burdens of the war, and predicted ruin to the state: in fact, the present year was that of a great crisis. We were involved in a contest apparently interminable, except by our submission; since little hope appeared of saving the continent from French dominion at the same time, our national credit seemed tottering to its base; rebellion was ready to burst out in Ireland;

and our national defenders, the British seamen, disgusted by real and fancied wrongs, were preparing to turn their mutinous arms against their own country.

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The first measure of this session which solicits our attention, is the alteration of the currency, produced by an act authorising the suspension of cash payments at the Bank of England ;—an act of marvellous efficacy in its day; but which has been productive of consequences far more extensive and important than ever entered into the imagination of its supporters. As the rapid increase of national debt, and the failure of pacific negociations, had lately created alarm among fundholders, sellers became more numerous than buyers, and the prices of stock fell proportionally to apprehensions respecting national credit, were added fears for the grand national repository, the Bank of England; which had been drained of immense sums by government, whose remittances to foreign powers, being necessarily made in specie, had greatly diminished the circulating coin of the kingdom. As early as 1795, the directors had earnestly requested Mr. Pitt so to arrange his financial measures for the year, as not to depend on farther assistance from them; and at different times they repeated these remonstrances, stating the absolute necessity of diminishing the sum of their advances to government, the last having been granted with great reluctance, at his pressing solicitation: in 1796, however, they again yielded to the urgent demands of the public service: but when the minister, at the commencement of the present year, required still larger advances; stating that, beside the accommodation to the English treasury, a loan of £1,500,000 would be wanted for Ireland, the governor of the Bank was directed to inform Mr. Pitt that a compliance with his request would probably oblige the directors to shut up their doors.'

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Nor was the accommodation afforded to government the sole cause of alarm to the Bank: timid persons had felt inclined, ever since the beginning of the war, to hoard their cash; and the fears of invasion had lately induced many capitalists, farmers, and opulent tradesmen to withdraw their deposits from country bankers: the demand for specie which this occasioned soon reached the metropolis; so that on Monday, the twentieth of February, a great run commenced on the Bank, which went on increasing rapidly till the twentyfourth, when the demands for cash became so frequent and large, that a deputation of the directors hastened to submit their situation to the consideration of the chancellor of the exchequer, and ask him how far he thought they might venture

to go in paying coin without detriment to the public service. The nature of the case appeared so alarming to the cabinet, that a messenger was instantly despatched to Windsor for his majesty, who came to town, and held a council, the first time during his reign, for the transaction of business on a Sunday. The conclusion to which they came, was an order, prohibiting the Bank from issuing any more gold in payment of its notes, until the sense of parliament could be taken. With a view of allaying the public alarm which this measure was calculated to excite, a notice was appended to the order of the privy council, declaring that the general concerns of the Bank were in so prosperous a condition, as to preclude every doubt as to the security of its notes; that the directors meant to continue their usual discounts for the accommodation of the commercial in terest, paying the amount in bank notes, and the dividend warrants in the same manner.

A meeting of merchants and bankers was held the same day at the Mansion-House, when it was determined to support the credit of the Bank by receiving its notes in payment of any sum of money: the lords of council also agreed to a similar resolution. When this subject was announced to the two houses, the opponents and supporters of administration expressed very different opinions respecting it: the former construed the discontinuance of cash payments by the Bank into a state of insolvency and bankruptcy, as usually defined by commercial men; while ministers considered the case as one not to be measured by ordinary rules. The Bank had been stated by the directors to possess, in its corporate property, effects far exceeding all the demands to which it was liable; but from unfounded alarms, it was not allowed to retain the usual quantity of gold and silver: it could not therefore be called insolvent and bankrupt, when its effects would soon bring plenty of gold and silver into its coffers. The first step taken was to appoint two secret committees to ascertain the assets of the Bank beyond its debts; and their reports stated that these amounted to the sum of £3,826,890, exclusive of a permanent debt of £11,666,800 in the three per cent stock, due from government; also that the demands which occasioned this drain of cash had of late progressively increased, and that they were likely to go on so increasing, until they would deprive the Bank of its means of supplying that cash to government, which its pressing exigencies might require. On these reports, Mr. Pitt proposed and carried a bill, enabling the directors to issue notes in payment of demands, instead of cash, agreeably to the late order of council: a

clause also was introduced, which prevented any person from being subject to arrest, who offered Bank of England notes in discharge of a debt: this, however, did not strictly amount to a legal tender; as it was afterwards determined in the courts of law that a creditor might still demand cash in payment of a debt instead of notes. A bill was also introduced to legalise the issue of small notes by private persons; from which time the circulation of gold coin in a great measure ceased, and notes of one pound and upwards became the general medium of commercial intercourse.

With regard to the policy and expediency of this measure, judgment will be given, according as opinions vary with respect to the policy and expediency of the war. There can be no question respecting the necessity of such a bill, if the war was to be carried on; for the whole world could not have supplied us with cash for the vast expenditure in which that war was involving us. Leaving this question therefore in abeyance, let us briefly consider the effects which necessarily resulted from so celebrated a stroke of policy. The circulating medium being now easily multiplied, government was freed from all embarrassment; the benefit of a rising market was generally experienced; taxes could be increased without becoming burdensome; and the minister was enabled to raise any supplies which the most profuse expenditure might render necessary: he could create offices, augment salaries, grant pensions, form the most extravagant contracts, and buy seats in parliament by wholesale: he could send out the most disastrous expeditions, like that of Walcheren, without fears for the result; he could subsidise foreign potentates to any amount, and organise coalitions to any extent; nay, he could send the whole military force of England into Spain, and provision it from this country.

No one suffered materially from this change but those who were living on fixed incomes or the interest of money, and laborers, whose wages never rise in proportion to the depreciation of the currency: but as the bill took from the least productive classes what it gave to those who employed it in reproduction, the consequence was, that agriculture received a powerful impulse, immense tracts of waste land were brought into cultivation, and every new species of husbandry was introduced; for landowners joined with their tenants in improvements, when they found rents rising at the expiration of leases. Owing to this general influx of money, trade also florished to an unexampled extent; great national works were undertaken for the employment of capital; and prosperity every where

appeared in spite of long and expensive wars, which never were known to create prosperity before: besides, the popula tion, naturally accommodating itself to the large addition thus made to the productive capital and the demand for labor, became proportionally augmented.

The multitude were astonished at these phenomena; but a few discerning persons saw how delusive were the appearances of national prosperity, which, in fact, concealed a robbery committed on a large portion of the community: they foresaw the ruinous habits of profligacy and expenditure which would thence be introduced into all stages of society, and the general distress which would ensue at the end of the war, when the circulating medium must necessarily be contracted and the enormous debts, which war had occasioned, came to be paid in that contracted currency: they foresaw also the vast advantages which monied men would thereby gain over the ancient aristocracy of the country; as well as that irritation which all the suffering classes in the community would feel, and which would necessarily urge them to make violent changes in the constitution, with a hope of discovering a remedy for their distress. The first great change of our national currency, which benefited the debtor at the expense of the creditor, may be said to have created that magnificent but deceptive prosperity, which overthrew Napoleon: the second change, which took from the debtor what it gave to the creditor, and from the productive classes what it gave to the nonproductive, being too rapidly executed, and without any respect to an equitable ajustment, has altered, and may possibly overthrow the British constitution.

The alarm caused by the stoppage of cash payments at the Bank was not much abated before another cause of anxiety arose from the mutinous spirit which broke out among the sailors, on account of their inadequate pay, as well as the quantity and quality of their provisions. Signs of this discontent first appeared at Spithead, when lord Bridport received orders from government to sail with the channel fleet; for instead of obeying the signal to prepare for sea, the crew of the admiral's ship ran up the shrouds, and gave three cheers; which, being answered by the other vessels, manifested a complete combination. The mutineers appointed delegates, who, in a petition to admiral lord Howe, stated that as long as a redress of grievances was refused to them, they would not quit their station, unless the enemy was known to be at sea.' Through the meritorious exertions of that excellent officer, who

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