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ultimately be procured,) and the income thence arising, may be safely relied on as a financial resource.
Besides, if money must be borrowed to pay the duties previous to the goods being taken out for consumption, if we wish to be a great trading nation, and the Magazine of Europe, it is much better that the money should be borrowed by the public than by the merchant. Government can obtain it more readily, can get it on easier terms, and might be authorised by an act of parliament, to issue exchequer bills on the credit of the merchants' bonds, to the extent of one-third or one-half of their amount, on which principle the sum required at this time may be raised. The plan now proposed is, in fact, a forced loan, from a portion of the community; and whilst it has all the disadvantages of that exploded mode of borrowing money, must to a considerable extent be much sooner repaid, in the shape of drawbacks.
It is likewise maintained, that the public suffers by the goods being kept back from the market. But the idea of compelling the farmer or the merchant to sell to disadvantage, is so contrary to all sound principles of political economy, that I can hardly imagine it will be seriously contended for at this time. No prosperous or extensive commerce would be carried ou if such ideas were to be acted upon. They ought to have been consigned to oblivion long ago, with all the absurdities that were formerly so current, regarding forestalling, regrating, &c. The income tax, the expense of warehousing, and the various injuries to which goods are liable when long warehoused, are sufficient inducements to the merchant to effect a sale, whenever it can be done with any comparative advantage.
It has been said, that the goods may be sent to Jersey and Guernsey, as if it were any disadvantage, or even an eye-sore, to have them lodged in British warehouses. But such a measure, it would be extremely impolitic to encourage. At such a distance, the merchant cannot have the necessary inspection of his goods ;the warehouses are not likely to be so well constructed ;-the persons in whose custody they are placed, may not be so honest, nor equally amenable to the laws ;-it may not be so easy to find vessels to send off the goods; nor such a safe harbor as the Thames to load in, more especially during the more inclement seasons of the year;—it may not be so practicable to make a regular insurance, nor in time of war to have the goods placed under such safe convoy ;--and if many millions' worth of goods were deposited in those islands, within sight of the French coast, what an inducement would it not be, at the commencement of a new war, to fit out a great armament, to secure so immense a booty ? To encourage such an idea, therefore, would be infatuation in the extreme.
Besides, the warehousing in British ports, was always considered to be a permanent system, in consequence of which, docks and warehouses of great extent, have been constructed in the river Thames, and in other parts of the kingdom, which will be rendered useless; and property, at present of immense value, would be annihilated, if the bonding system were either entirely to be given up, or even materially restricted.
The difficulties you have experienced in carrying on this negociation with government, induces me to think, that the establishment of“ a chamber of commerce ” in London, similar to those of Edinburgh and Glasgow, would be of great advantage to the trading concerns of the metropolis. Such a body would collect useful information; would watch over the interests of commerce ;-would point out to government the means of its extension;" and would be able to speak with more weight than a number of unconnected individuals, who accidentally assemble on a particular occasion, regarding any point respecting which they may happen to be personally interested at the moment: that very circumstance diminishes their weight in any negociation which they may enter into with Ministers.
The establishment of a commercial chamber is the more necessary at this time, as the commerce of the country, as well as its agriculture and its finances, have got into what may be called“ an artificial state.” They all require unceasing attention, to prevent those injuries to which they are respectively liable, and which nothing can prevent, but a perseverance in those systems which experience has now sanctioned, and improving on them if required. In some cases, measures were adopted in which wisdom and energy were combined : the necessity of such cases may again recur; and thence it is desirable that public bodies should be constituted, from whom government can procure information whenever they may have occasion to call for it.
If these suggestions should furnish you with any hints, by which an amicable arrangement could be made with his majesty's government, who can have no wish either to injure or oppress the mercantile interest, it would be a circumstance in the highest degree satisfactory to,
JOHN SINCLAIR. 8th November, 1814.
· For instance, if there were no transit duties on the Elbe, the Weser, the Oder, and the Vistula, the consumption of British manufactures would be greatly increased. This our government might easily arrange at this time; but unless this suggestion is enforced by a body of weight, it may not be attended to.
Bank Stock in particular.
For many years past I bave been led to pay particular attention to the finances of this country.
It was in the year 1783 that I was first elected a member of the British parliament. Those alone who were then living, can form an idea of the miserable state of our public credit at that eventful crisis. Lord Stair, Dr. Price, and a number of other authors of celebrity at the time, predicted that the nation was bankrupt; and a number of despairing politicians, in both houses, maintained the same doctrine.
Having previously engaged in financial inquiries, I was thence led to pay particular attention to the subject, and resolved to ascertain how far their apprehensions were well founded. I accordingly examined all the accounts that were presented to parliament, and had the satisfaction of finding, that the old branches of the revenue were annually increasing, and other proofs of the solidity of our financial resources. I was thence induced to publish in 1786, “Hints on the Finances of the British Empire,” which was considered to be an ample refutation of the groundless apprehensions entertained by our gloomy financial prophets at that time; and in particular, had so favorable an effect on the continent, that Sir Joseph Yorke, then our Ambassador at the Hague, who, from bis situation, had a better opportunity of appreciating its effects than any other individual, spoke of the beneficial consequences which had resulted froin it, in the most fattering terms.
When Mr. Pitt became minister of this country, he was led to pay particular attention to any information connected with the finance of the country, which came from the author of that work, and frequently requested my opinion on those subjects. By mere accident, I met with a letter from him the other day, dated Putney-Heath, November 2, 1784, in which there is the following paragraph : -"I wish much to know your present speculations on our finances. Our prospects of it improve.” &c. &c. The respect be entertained for those suggestions induced him, some years afterwards, to adopt the plan of issuing exchequer bills for the relief of the commercial interest, which was productive of such public advantage.
It was in the year 1798, that I undertook the “ History of the Public Revenue of the British Empire,” which is now completed in three volumes octavo, and which I believe is considered to be the first work, in which the practical principles of finance were attempted to be explained, and where the progressive improvement of
a revenue was traced from a slender beginning, until it had reached maturity.
The author of such a work was naturally attentive to the progress of our financial system, and not a little alarmed to find, that a committee of the house of commons, to whom the bullion question was referred, were to present a report to parliament, likely to overturn the paper circulation of the country. However hazardous the establishment of the new system (that of paper not convertible into coin) might be at the commencement, yei it had become so involved in all our concerns, that it was impossible to think of any alteration without alarm ; indeed there was too much reason to apprehend, that another change, at that critical moment, might have been productive of the most serious consequences. I was thence indaced to write a letter to the committee, as soon as the nature of their proposed report was known, stating to them what appeared to me the danger of their proceedings; and, as soon as the report was published, came up to London, at un unusual period of the year, partly with a view of entering my public protest against the doctrines which it maintained. Fortunately, numbers of able men, both in and out of parliament, pursued the same course, and their efforts were crowned with victory; but it was satisfactory to be the first who was awakened to the danger, and sounded the alarm. The effect of these united exertions, in supporting the credit of the stock's in general, but in particular of bank stock, was very great. In l'ebruary 1811, when the bullion committee was appointed, the price of bank stock was 2764. It fell, owing to the alarm created by that report, to 229, in October 1811, and was as low as 212, in October 1812. It has since risen to 247, but from the unceasing clamor regarding the restriction, it has never reached its former price, which otherwise it probably would have done, and which, by prudent measures, may still be restored.
I now feel a great regret, that the public credit of the country, or, in other words, the price of stocks, is not so high as there was reason to expect would have been the case at this time. That circumstance is a greater national calamity than is generally known, When the price of stocks is high, the circulating medium abounds; it is attainable by the farmer, the manufacturer, and the merchant ;--the interest of money is low, by which many branches of industry may be carried on, which could not otherwise be prosecuted to advantage ;-the taxes are easily paid, and become more productive ;- from the abundance and rapidity of circulation, every individual feels himself more comfortable ;-industry increases, and meets with its due reward ;-every species of improvement is carried on with energy,—and the prosperity of the country advances with rapid strides.
Impressed with these ideas, I must necessarily feel the greatest anxiety to see the public credit of this country soon elevated to the highest pitch that the circumstances of the case will admit of. On such occasions, I have always seen the union oftheory and practice the best means of ascertaining the truth. I am thence led to apply to those who are the most likely to be conversant in such inquiries, to favor me with answers to the subjoined queries, They may be assured, that their object is, to promote the publie advantage, and that by furnishing the useful information which it is in their power to give, they will not only derive much satisfaction by promoting the public good, but, sooner or later, their own personal interests will be essentially benefitted. Requesting your particular attention to this application,
obedient servant, Hum Common, near Richmond,
JOHN SINCLAIR, 20th November, 1814.
1. To what causes do you attribute the lower price of the stocks, since the
restoration of peace was confirmed ? 2. Are there any means by which the price of stocks in general, and that of
bank stock'in particular, might be improved ? 3. Has the restriction on the conversion of bank notes into coin been at
tended with any public inconvenience ? 4. Would not the abolishing of this restriction at - present be productive of
much public injury? 5. Do you think that the application of a sinking fund has kept up the price
of the stocks; and on what principles has it produced that effect? 6. Would a diminution of the sinking fund, or borrowing from it, instead of
making a new loạn, increase or lower the price of the stocks? 7. Has not the frequent failures of bankers, both in London and in the coun
try, often materially affected public credit; and would not the placing them under a proper system of licence, without injuring respectablz
houses, promote the public advantage ?* 8. Has the competition for loans, on the whole, been of any service in pro
curing better bargains for the public, and keeping up the price of stocks,
during the late war? 9. Whence does the money arise to furnish new loans ? Is it from savings at
home ;-from remittances abroad;-by diverting capital from other branches; or from what other source?
* In the History of the Revenuc, the licensing of bankers is strongly recommended, and would have prevented much mischief,