THE SUSPENSION OF CASH PAYMENTS 699 
system which Pitt introduced, in his anxiety to reduce the A-D. 1776 
debt of the country, should have operated so as to add to the 
burden of national obligations, and should by the mistaken 
expectations it engendered have served as an incentive to 
reckless borrowing. 
259. It has been pointed out above that the suspension Aster the 
of cash payments enabled the Bank of England to give of rash 
increased accommodation to the public, and thus to restore P¢¥mente 
commercial credit’; but the measure which effected this 
desirable result entirely changed the character of the paper 
currency of the country. The value of the bank-notes was 
no longer based on that of the precious metals; they had 
really become inconvertible; it was only by the exercise of 
great judgment in restricting the issues of paper, that the 
Directors could hope to maintain the notes at par. As a 
matter of fact, they failed sufficiently to limit the quantities 
which were put in circulation, with the result that the country 
began to suffer from the evils of a depreciated currency. The 
ulterior and indirect effects of the pressure, which Pitt put on 
the Bank in 1797, were seriously felt during the first quarter 
of the nineteenth century; prices were inflated, and the 
exchanges with foreign countries tended to be unfavourable. 
It may be impossible to gauge the precise amount of mischief 
which was due to this cause in particular, we can only note it there was 
as a serious aggravation, and as one which affected all classes, 5, oak 
rich and poor. Depreciation of the circulating medium ren- Toe 
dered the purchasing power of money less at a time when ation ih th 
wages generally were low, and were falling. The evils are 
well stated by the Committee which was appointed to in- 
vestigate the subject. 
“Your Committee conceive that it would be superfluous 
to point out, in detail, the disadvantages which must result 
bo the country, from any such general excess of currency as sy the 
lowers its relative value. The effect of such an augmentation gn’ 
of prices upon all money transactions for time; the unavoid- 
able injury suffered by annuitants, and by creditors of every 
description, both private and public; the unintended ad- 
vantage gained by Government and all other debtors; are 
1 See above, p. 694.