Explanation of the Diagram. (2)

In the following diagram, some of the movements of the period of the Bank Restriction are presented in a manner more distinct than any statistics can attain. The Bank of England circulation advanced steadily during the Restriction, under the rule adopted by the directors (p. 265). So soon as the crisis of 1818 brought a reduction, and Peel's act of 1819 enforced resumption, the Bank was forced to act upon the principles of the Bullion Report, though it still rejected them in theory, and retain its notes as they came back. So soon as the reduction of the issues began, everything conspired to assist it, and it went on until August, 1822, although specie payments were nominally resumed in May, 1821. The line at the top of the diagram, between 1810 and 1819, represents the total circulation of Bank of England and country-bank notes for the only period for which we have any estimate of them (see pp. 255 and 284). It shows the nett reduction in 1816, though the Bank of England kept up and increased its notes, and the increase in bullion (lowest line in the diagram) meets it exactly in accordance with the doctrine enunciated by the bullionists. When the total notes increased again in 1817, the bullion declined. When the Bank of England contracted, in 1819 and 1820, the country banks were forced to do the same, and the bullion increased. In 1824, under new inflation, it declined. The sudden increase and decrease of Bank of England notes in 1825, was in obedience to the doctrine of the Report in regard to the method of dealing with a panic (pp. 250, 304).

On the price line, see p. 255. The articles whose prices are summed up each six months are: I cwt. ashes; I cwt. bristles; 1 cwt. coffee; I lb. cochineal; I cwt. copper; 100 lbs. cotton; I ton flax; I ton hemp; I cwt. hops; 10½ cwt. lead; I lb. indigo; I ton iron; 252 gals, oil; I cwt. butter; 304 lbs. mess beef; I cwt. rice; I cwt. saltpetre; I lb. raw silk; I lb. cinnamon; 100 lbs. pepper; I gal. rum; I cwt. sugar; I cwt. tallow; I barrel tar; I lb. tea; I load timber; I cwt. tin; loo lbs. tobacco; I lb. wool; 8 bu. wheat. I have varied somewhat from the units of quantity in Tooke's tables in order that the fluctuations of each article might have an equal effect on the aggregate.

The price of gold is taken from the table in Tooke's “Prices,” VoL II,