Effects of the Restriction in Its First Stage.

The harvest of 1800 was almost a failure. In the summer of that year the exchanges became unfavorable, and gold, which might be legally exported (i. e., that obtained by melting foreign coin), rose to a premium. The mint law provided that bullion should be coined for any one who presented it. One ounce of gold was coined into £3 17s. 10½d. of the coinage, without charge to the individual who offered it. He therefore received again just what he gave, only in a manufactured form. The only loss or expense to him consisted in the interest lost while he was waiting. The market cash price for gold was, on account of this loss, £3 17s. 6d. per ounce. At the time mentioned, June, 1800, exportable gold rose to £4 5s. per ounce in notes, and in January, 1801, it was at,£4 6s.

The premium on gold which might be “sworn off” for exportation ranged generally during this period three or four shillings per ounce higher than non-exportable gold. Tables showing the gold premium differ, some of them quoting domestic and some of them exportable gold.

When the question of the Restriction came up at the Peace, in 1802, it was argued that resumption was impossible because the exchanges were adverse. Lord King and Mr. Fox argued that to resume was the way to make them favorable. Their doctrine was that the redundancy of the paper was the cause of the premium on gold and the adverse exchange, but they found no hearers. The bank-notes in February, 1802, were fifteen millions, the specie in bank seven millions.

In 1804, the exchanges with Dublin became ad verse to that place, and a parliamentary committee was appointed to investigate the cause.

They ascribed the outflow of gold from Ireland to England to the redundancy and depreciation of the Irish paper. The doctrines they laid down were the same which were afterwards embodied in the Bullion Report, but this Irish report never attracted much attention.