Money and Banking in Jean-Baptiste Say's Economic Thought by Jacoud Gilles;

Author:Jacoud, Gilles;
Language: eng
Format: epub
Publisher: Taylor & Francis Group
Published: 2013-08-15T00:00:00+00:00

Notes

(1) If anyone could suspect that the depreciations which have occurred at different times in England in the money in circulation, and which have plunged the country into painful trade crises, were caused by over-abundant issue of notes by the Bank of France and the provincial bankers, he will find numerous proofs in the writings of Mr Rob. Mushet, published in 1826, entitled: An Attempt to Explain from Facts the Effects of the Issues of the Bank of England, chapter VI.22 See also the 1822 Enquêtes23 parlementaires.24 But if companies and individuals are deprived of the faculty to freely multiply the additions to money, it does not follow that this faculty should be left to the government or its agents: it is no less dangerous in their hands.

(2) The privilege of the Bank of London finishes in 1833; that of the Bank of Dublin in 1838.

(3) Country banks in England are general partnership companies; they can have only six partners who are jointly liable to the amount of all their fortunes. Banks in Scotland can be set up as joint-stock companies in which each partner is liable to the amount of his shares. They undertake to refund their notes only as money orders on London at ten days from issue. In the issue of their notes, they barely exceed the wants of everyday circulation; for money orders on London are then demanded from them, for which they cannot have funds in London, without charges which soon exceed the profits which they can hope to make from these overabundant notes.

(4) At the time in question, in which the multiplication of paper money and banknotes was perhaps as much as 50 million sterling, there were also fractions of notes. These were composed of worn shillings and a sort of token which, as they did not contain the quantity of silver which should have been present in the amount they represented, were never melted down. These signs can be estimated at a nominal value of 5 to 6 million sterling, including copper coins, which in all countries are mere trust notes whose intrinsic value is well below their nominal value.

(5) Three lectures on the Transmission of Precious Metals from Country to Country, page 29.25

(6) I have already spoken about the Bank of England’s banknotes as paper money, because at that time they had a forced circulation; but in 1824 they were only trust notes which the bank was obliged to refund in gold, on presentation.

(7) We can see in a work by Mr Parnell, a Member of Parliament, published in 1827 and entitled Observations on Paper-Money, Over-trading …, p. 29,26 that between October 1825 and February 1826, 59 bankruptcies were declared amongst country banks, and that there were four times as many out of court compositions.

(8) One of the ways of preventing too great a multiplication of notes is to forbid them to be made under a certain amount; so that they can be used for the circulation of commodities which pass from

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