THE SUSPENSION OF CASH PAYMENTS 701 
paper-money circulated freely, showed that it retained its A-D. 7776 
value; after all, this only meant that so long as the credit of 
the Bank was good, its paper-issues were valuable; but it did 
not prove, as the Directors thought, that the paper retained 
its original value. They and their supporters were ready to 
argue that, in so far as there was a marked divergence be- 
tween the value of gold and the value of a note, this was 
due, not to a depreciation of the paper, but to an appreciation 
of gold, brought about by an unusual continental demand, 
owing to the requirements of the French armies and an in- 
creased disposition to hoard®. Experience was being gradually 
collected however; and as it accumulated, the fact became 
clearer that an over-issue of notes was the real cause of the 
trouble. There had been an enquiry, in 1804, into the reasons 
for the extraordinary difference between gold prices and 
paper prices in Dublin, and for the unfavourable state of the 
exchanges between Dublin and London?, and good grounds 
had been shown for believing that the phenomena were due 
to the greatly increased circulation of notes by the Bank of 
Ireland®. The monetary conditions, into which the Bullion 
Committee was appointed to enquire in 1810, were similar in Duned 
every respect, and that enquiry resulted in an admirable re- state of the 
port in which the Committee showed that a real depreciation to the 
of notes had occurred®. It insisted that the Directors should Loli 
1 Report from the Select Committee on the High Price of Gold Bullion, 1810, 
or. 2. 
3 Report of the Committee on the Circulating Paper, the Specie, and the 
Current Coin of Ireland, 1804 (reprinted in 1810). Accounts and Papers, 
1810, mx. 885. 
8 McLeod, Theory and Practice, mm. 18. There was a difference of twelve per 
cent. in the exchanges at Belfast, where Irish bank-notes did not circulate, and at 
Dublin, where they did. 
4 “Upon a review of all the facts and reasonings which have been submitted 
to the consideration of Your Committee in the course of their Enquiry, they have 
formed an Opinion, which they submit to the House :—That there is at present an 
excess in the paper circulation of this Country, of which the most unequivocal 
symptom is the very high price of Bullion, and next to that, the low state of the 
Continental Exchanges; that this excess is to be ascribed to the want of a suffi- 
cient check and contrdl in the issues of paper from the Bank of England; and 
originally, to the suspension of cash payments, which removed the natural and 
true control. For upon a general view of the subject, Your Committee are of 
opinion, that no safe, certain, and constantly adequate provision against an excess 
of paper currency, either occasional or permanent, can be found, except in the 
convertibility of all such paper into specie. Your Committee cannot, therefore,