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BRITISH FINANCIAL EXPERIENCE
1790-1830
NORMAN J. SILBERLING
brought down to 1837 i n the History ofPrices,1with the
assistance of Mr. M. L. Merac, who likewise derived
practically all of hisfiguresfrom the Price Current. The
table of prices as given in this volume includes the high
and low quotations at four periods within each year:
(1) about the middle of January, (2) the last days of
March and first days of April, (3) about the middle of
July, and (4) about the middle of November. There
are many gaps in the data, especially in the quotations
for the first and last periods during the earlier years.
This series was continued in the subsequent volumes of
the History of Prices. In the early sixties, Professor
Jevons conceived the plan of casting these materials
into the form of an index number, in order that the
general trend of prices might be ascertained. His results first appeared in the Journal of the Royal Statistical
Society for June, 1865.2 Jevons utilized practically all of
Tooke's quotations, as given in the History of Prices,
and supplemented these by a very few others from different sources. No attempt was made to average the
four sets of quotations for each article each year, and
Jevons used merely those for the second quarter, for
which the figures were on the whole most complete.
This fact is of importance in the proper use and understanding of his results. Taking the prices of 1782 as
a base, Jevons constructed a series of index numbers,
using the geometric mean of the individual ratios to
obtain the final indices. No weights were given to the
COMMODITY PRICES
various commodities except by the inclusion in some
Statistics of price movements form a natural starting instances of several varieties of the same article, as in
point for an inquiry of this sort. For the well-known the case of cotton, coffee, and sugar. Jevons also obindex numbers of W. Stanley Jevons, for the years from tained index numbers for various groups of commodities
1782 until 1865, we are primarily indebted to Mr. such as " corn " (six cereals), metals, fibres, oriental
Thomas Tooke, an English merchant in the Russian and tropical produce. The commodities entering into
trade whose career extended through and beyond the his general index number, and the composition of the
war period. Tooke, an earnest student of currency and special groups for the limited period 1782-1830 are
prices, published in 1823 a work entitled Thoughts and enumerated in Table 1. An examination of this list
T
HE monetary and financial events which attended
the military operations carried on by Great Britain
and her continental allies against the armies of France,
between 1793 and 1815, have acquired at this time a
special interest. The wars of the Napoleonic era present, in their political and economic aspects, numerous
points of similarity to, as well as interesting points of
contrast with, the great war of the past five years. An
examination of some of the financial experiences of
England during and immediately following this earlier
period may be useful, not only in setting forth historical
parallels and contrasts, but in furnishing valuable
lessons for our own time.
It is proposed to consider in this paper, certain aspects of the financial history of England for a period
beginning just before the war and extending to the year
1830, thus including the interval of recovery and return
to normal conditions. The object of this study is
primarily to bring together statistical data concerning
currency, prices, the rate of interest, etc., which are
available without elaborate research and special calculation. It is not intended to enter at any length into
a causal inquiry or reasoned interpretation of the events
disclosed, but rather to present the materials in clear
and usable form, enabling comparison to be made between the various sets of data and laying a basis for
further investigation.
Details on the High and Low Prices of the Last Thirty
Years, later expanded into the first two volumes of his
more widely familiar History of Prices. In his Thoughts
and Details Tooke included a table, extending from 1782
to 1822, of the prices of seventy-eight raw materials and
foodstuffs (including different varieties) which were furnished by a friend, Mr. A. Hinrichs. The principal
source was Prince's Price Current established in 1782,
the leading publication of its kind in that day. Only
about forty of these quotations were later copied and
1
Vol. 2, Appendix, 1838.
Reprinted in his Investigations in Currency and Finance, 1884,
pp. 119 f. In the reference above to the Journal of the Royal Statistical
Society I have used the present name of the publication. Previous to
1887 it was called the Statistical Journal.
2
[282]
TABLE 1. —COMMODITIES REPRESENTED IN
JEVONS' INDEX NUMBERS FROM
1782 TO 1830
CORN
Wheat, Gazette average
Barley,
"
Oats,
Rye,
Beans,
«
Peas,
"
"
from 1792.
MEAT
Mutton, St. Thomas' Hospital average.
Beef, St. Thomas' Hospital average.
Irish mess beef, St. Thomas' Hospital average.
BRITISH FINANCIAL EXPERIENCE, 1790-1830
283
base year, 1782; and for eight commodities, later than
Cotton, Upland, 1793 Tooke until 1801; after 1801 1790, the year from which I shall hereafter compare
"
Pernam, 1788
from Journal of the Royal Statis- Jevons' series with various other series.1 All the articles
"
Surat,
1790
tical Society, December 1862.
in Jevons' list are foods and raw materials, but they
"
Surinam, 1782-1844; Demerara after 1820.
include a fair proportion of the important articles of
Wool, Southdown, average 1784-1845, McCulloch's Dicthis nature for the period concerned. Table 2 contains
tionary.
FIBRES
Silk, China, raw.
Flax, St. Petersburg.
TIMBER
Memel fir, in bond.
Quebec yellow pine, 1784-1806,
McCulloch's Dictionary.
1820-39,
1813-21,
OILS
Gallipoli, in bond.
Fish.
Hay, Gentlemen's Magazine^ 1798.
Clover, Gentlemen's Magazine, 1803.
Straw, Gentlemen's Magazine, 1798.
METALS
Copper, tough cakes.
Lead, British pigs.
Tin, English bars.
Pig.
Iron Wrought, Russia.
Bars, Welsh.
Logwood, Jamaica.
Indigo superior and inferior, East India.
Cochineal, Spanish.
TROPICAL FOODS, ETC.*
Sugar, Muscovados, Tooke 1782-1805, Gazette average after
1800.
Havannah, for exportation, after 1801.
Tea ^° n g 0 U -
hyson
Coffee, superior British plantation.
" inferior British plantation.
" St. Domingo, for exportation, after 1807.
Rum, Jamaica,
Rice, Carolina.
Pepper, East India black.
Cinnamon, first quality, in bond.
Tobacco, Virginia, in bond.
MISCELLANEOUS
Butter, Waterford, etc.
Tallow, St. Petersburg.
Ashes, barilla, Carthagena in bond.
u
pearl; Danzig or Russia.
Hemp, St. Petersburg, clean.
Tar, Stockholm.
* Another group of " oriental produce " for which a separate
series was calculated includes sugar, tea, pepper, cinnamon, indigo,
China silk, and Surat cotton.
discloses an aggregate of fifty-two items — counting
different varieties of the same article — and of about
forty distinct commodities. For several articles the
first quotations obtained were for years later than the
The years in which the quotations begin are as follows: 1792,
1793, 1798, 1801, 1803, 1806, and 1808.
1782
1785
1786
1787
1788
1789
I79O
1791
I79 2
1793
1794
1795
1796
DYES
1
Year (usually the
second quarter)
1783
1784
FODDER
"
TABLE 2. —JEVONS' INDEX NUMBERS OF PRICES
FOR FORTY COMMODITIES AND FOR CEREALS,
METALS, AND ORIENTAL PRODUCE, 1782-1830.*
1797
1798
1799
l8oo
I8OI
I8O2
1803
1804
I805
1806
1807
1808
1809
l8lO
l8ll
I8l2
1813
1814
I8I5
I8l6
1817
I8l8
1819
I82O
I82I
l822
1823
1824
1825
1826
1827
1828
1829
183O
Forty
commodities
IOO
93
90
Cereals
IOO
I27
Il6
IO4
85
87
87
85
87
89
93
99
98
117
IO5
IO2
125
I
no
112
118
116
I
S9
130
141
153
119
128
122
136
*33
132
149
161
164
147
148
149
153
132
109
120
135
117
106
94
88
89
88
103
90
90
81
79
81
99
5
I0
117
112
no
129
140
168
53
252
253
140
127
138
182
163
173
201
211
203
182
272
256
165
137
148
198
209
186
152
116
92
125
147
i57
152
155
136
135
138
Metals
IOO
Oriental
produce
IOO
IOO
IOI
9O
89
95
93
96
94
93
82
9i
9i
93
92
IOO
108
85
113
in
108
117
123
122
127
*35
152
148
148
151
166
i74
156
160
164
165
161
i45
144
151
138
115
no
122
119
109
101
IOO
107
108
123
III
103
95
89
81
80
89
107
96
84
96
85
107
IOO
80
87
80
76
73
81
81
75
86
88
96
81
81
88
121
98
82
83
93
78
67
68
67
65
61
80
56
58
53
5i
52
* Based on currency prices relative to those in 1782. Jevons' data
for various groups of articles are given for the years 1801-20 inclusive,
in terms of gold; these figures were therefore reconverted to paper by
the index of the price of gold which Jevons used.
THE REVIEW OF ECONOMIC STATISTICS
284
CHART 1. —JEVONS' INDEX NUMBERS OF PRICES FOR FORTY COMMODITIES, FOR CORN, FOR METALS,
AND FOR ORIENTAL PRODUCE, 1782-1830
(DATA GIVEN IN TABLE 2)
(a) FORTY COMMODITIES.
(b) CORN (CEREALS).
UNITS OP ONE PER CENT.
"
«
the index numbers derived for all articles, and for those
of three important special groups, namely, " corn,"
metals, and oriental produce. These data are plotted
in Chart 1.
Before interpreting the Jevons indices, it will be well
to consider another series which appeal's hitherto to
have escaped the attention of economists and statisticians. In 1848 Mr. John Taylor, a London publisher
interested in monetary questions, presented before the
Commons' Secret Committee on Commercial Distress
a table containing the average index numbers for ninety
commodities for seven-year periods, from 1784-90 (the
base period) down to 1833-37 (the last being only a fiveyear period). These were presented both for each commodity separately, and averaged for the entire list.1
This list embraces all of the articles used by Jevons2
1
(C) METALS.
«
"
(d) ORIENTAL PRODUCE.
* SERIOUSLY DEFICIENT HARVESTS.
See Parliamentary Papers, 1847-48, 8, Pt. 1, p. 434. The original table bears the heading: " Table of the comparative prices of
ninety of the principal articles of commerce, expressed in centesimal
proportions," and is given in full in the appendix to the present
2
paper.
Irrespective of minor diversities in variety or grade.
UNITS OF ONE P E R CENT.
"
«
"
«
with the exception of beans, peas, mutton, Georgia
cotton, fodder, and wrought iron; and in addition it
contains those listed in Table 3.
TABLE 3. —COMMODITIES REPRESENTED IN
TAYLOR'S INDEX NUMBERS, BUT
NOT USED BY JEVONS
Raisins, Malaga.
Alum, British.
"
Smyrna, red.
Ashes, pot.
Rum, Leeward Islands.
Bark, oak, British.
Seeds, Caraway, foreign.
Brandy, cognac.
tt
Clover, red, foreign.
Candles.
" Clover, white, foreign.
Coal, Newcastle.
tt
" Rape, British.
Sunderland.
" Linseed, foreign.
Coffee, Mocha.
Silk, raw, Bengal and Brutia.
Copper, sheets.
Cotton, Berbice and Smyrna. Silk, thrown, Piedmont.
Spirits, British malt.
Cotton yarn, Turkish.
Sugar, Refined, powder-loaves.
«
« British.
" Refined, lumps.
Currants.
Sugar, Raw (brown), Jamaica.
Figs.
" Raw (fine), Jamaica.
Flour, British.
BRITISH FINANCIAL EXPERIENCE, 1790-1830
Hemp, Riga, Rhine.
Hops, pockets.
Leather, butts, superior.
Malt.
Nutmegs.
Oils, Rape seed, British.
" Linseed, British.
" Vitriol.
Opium, Turkish.
Pimento.
Pork, mess.
Quicksilver.
Tallow, London, melted.
Tar, Archangel.
Tea, Bohea.
Timber, Riga fir.
Tobacco, Maryland, fine yellow.
Wax, Bees', British.
" Bees', Foreign.
Wines, Port.
" Sherry.
Wood, Mahogany, Jamaica.
Wool, Spanish Leonesa, best.
"
Long Kent.
285
CHART 2. — INDEX NUMBERS OF PRICES AND
WAGES, 1784-1837, BY PERIODS CENTERED
(DATA GIVEN IN TABLES 4 AND 5)
(a) TAYLOR'S INDEX NUMBERS OF PRICES.
(b) JEVONS' INDEX NUMBERS OF PRICES.
(c) WOODS' INDEX NUMBERS OF WAGES.
Taylor stated that the figures were taken from a work
entitled Tables of Taxation, Currency, and Prices
(1837), of which the author, though unnamed, was quite
possibly himself. The prices used were exclusive of
duty. The sources and exact method of deriving the
individual (average) price ratios are not stated. The
final index numbers are a simple arithmetic average of
the several items for each period. In Table 4 the reTABLE 4. —TAYLOR'S AND JEVONS'* INDEX
NUMBERS OF PRICES BY PERIODS
(AVERAGE FOR 1784-90 = 100)
PERIOD
1784-90
1791-97.....
I798-1804
1805-II
I8I2-I8
Taylor's index
Jevons' index
100
100
120
1l8
150
143
166
174
177
1826-32. . ,
125
104
153
110
94
1833-37
104
92
1819-25
* Computed by averaging annual figures of each period and reducing to base period 1784-90 as 100.
suits for all commodities for the eight periods are given,
and in Chart 2 they are plotted and placed in comparison with Jevons' figures, averaged similarly, and
reduced to the same base (an operation sufficiently accurate for the present purpose).
The two price series are in substantial agreement
except that (1) the Taylor figures run consistently
higher; and (2) the Jevons index reaches a maximum
in the period from 1805-11, dropping from 166 to 153 in
the following period, while the Taylor index rises from
174 in the period from 1805-11 to a maximum of 177 in
the period 1812-18. These differences between the two
series are due almost altogether to differences in the
two basic commodity lists.1 If only those items of the
Taylor lists are taken for which there are corresponding
items in the Jevons lists, the indices resulting from the
paired items are thoroughly consistent. Furthermore
1
Jevons' use of the geometric mean would tend to make his index
only slightly lower.
2
Mr. Silberling left for London in July. As we go to press we have
received a letter from him stating that he has secured additional data
concerning prices. He has found a new index based on the prices of
90 articles covering the period 1790-1830. Separate indices for
domestic produce (34 articles) and imported produce (56 articles) are
if the Jevons list is made to include the additional items
in Taylor's, the effect is to raise the Jevons index noticeably and to delay the final drop in the index until after
1814. It may fairly be argued that the longer list employed by Taylor gives a more reliable index of the
general price level. Jevons' mean is too much affected
by the relatively large number of oriental products
whose prices show exceptional decline. Certainly
Jevons' index cannot be accepted unreservedly in the
light of the Taylor series.2
The course of commodity prices during the Napoleonic period and until 1830 is reasonably clear. From
1793 to 1814 was a period of increasing prices, in spite
of the apparent drop from 1810-14 in Jevons' index.
By 1801 prices had risen about 50 per cent above the
pre-war level.3 The upward movement appears then to
have halted for two or three years. Early in 1802 the
first phase of the war with France was closed by the
Peace of Amiens. Hostilities were resumed, however,
in 1803, and continued with varying scope and intensity
computed. The high point of prices, as shown by these data, was
reached in 1813-14 and not in 1810 as the Jevons series indicates.
These data strengthen the conclusion that the Taylor series rather
than the Jevons series correctly describes the general price movement.
—Editor.
3
Of course, these war prices were paper money prices, for the Bank
of England had suspended specie payments February 26, 1797.
THE REVIEW OF ECONOMIC STATISTICS
286
until 1815. The price level, temporarily declining from
1801 to 1804, rose rapidly again from 1805 to 1810.
From 1810 to 1814 there was probably no material
change, the general level remaining about 70 per cent
above the average of the decade before the war.1
The return to the old level was rapid, occupying only
seven or eight years, and beginning shortly before the
declaration of peace. The fall of prices in 1815 and 1816
was pronounced. The following two years witnessed a
tendency toward somewhat higher prices. Resumption
of specie payments was begun by the Bank of England
in 1819, and fully accomplished in 1821. By the latter
year prices were generally at about the pre-war level.
The higher prices of 1825-26 are rather the outward
phases of deficient harvests and speculative enterprise
than of the price cycle of the war. In accounting for the
quick drop of prices in England after 1814 it should be
remembered that conditions were unlike the present in
at least three important particulars:
periods chosen by Taylor to enable a comparison to be
made, particularly if the averages are taken of 1805 and
1810, and of 1820 and 1824. I have also reduced these
figures to 1790 as a base year. Table 5 contains the
original figures and my revision of them.
1. A return to pre-war prices was a question of bringing an inconvertible paper circulation to a sound
specie basis. Questions of convertibility do not
complicate the present situation. The existing
monetary inflation persists in the face of unrestricted gold payments.
2. In the years following the Napoleonic wars the
general tendency of agricultural prices was downward. No such tendency is to be expected at this
time.
3. The production of the precious metals was low
during the first decades of the nineteenth century.2 No sustained diminution of gold output is
observable at present.
These results are plotted for comparison with the two
price curves on Chart 2. Wages show a striking similarity to Taylor's price curve through their fifth period,
when they both reached maximum values, 160 and 177
per cent respectively. It is quite probable that if the
indices had been computed and averaged for shorter
periods, e. g., annually, wages would have lagged in
topping their crest and starting down, as they lagged in
rising, but by not as long as the seven years between
periods measured from center to center. Another noteworthy feature is the sluggish downward slope of the
wage curve in the last two periods, the era of reconstruction. In studying this wage curve, it should be remembered that both price bases are the 1784-90 average,
while the wage base is the level in 1790, when a rise had
probably already begun. This has the effect of giving
line (C) a later " take-off " from 100 than it would in
fact have shown if data had made closer comparability
of base practicable. To compensate for that fact, we
should have to move the points on the dotted line upward by a percentage equal to the percentage excess of
the 1790 wage level over the unknown average 1784-90
wage level. Thus the greater sensitiveness of wages in
their rise than in their fall, already seemingly pointed
out by the curves as they stand, would be still more
strikingly demonstrated.
MONEY WAGES
Statistics of wages for this period are difficult to
obtain; but for the sake of completeness I offer for
comparison with the average price data of Taylor and
Jevons the interesting index numbers of wages calculated by Mr. G. H. Woods, published in the Economic
Journal for December 1899.3 These numbers represent
money wages in twenty-four industrial centers in the
United Kingdom (no agricultural wages being included)
at four- or five-year intervals. For some of the earlier
years not all the centers are represented. The base
year is 1840. The years fall sufficiently well within the
1
The following seventeen articles included in Taylor'sfigures,but
not in Jevons7, rose higher in the period 1812-18 than in 1805-11:
alum, cognac, Sunderland coal, currants, figs, flour, malt, Malaga
raisins, caraway seeds, rape seeds, linseed, quicksilver, Jamaica rum,
refined sugar, port wine, sherry wine, Bohea tea.
2
Soetbeer's statistics of the average annual gold production of the
world for the period are as follows:
1761-1780
20,705 kilograms
1781-1800
17,790
1801-1810
17,778
1811-1820
1821-1830
11,445
"
"
"
14,216
"
(Litteraturnachweis uber Geld und Munzwesen.)
3
" The Course of Average Wages between 1790 and 1860,"
Economic Journal (London), 9, p. 588.
TABLE 5.—WOODS' INDEX NUMBERS OF WAGES
YEAR
179°
1795
1800
1805
1810
1816
1820
1824
1831
Original data
Average for
period
Average referred
to base 1790
72
82
72
82
93
104
122
93
114
129
113
157
115
l6o
no
153
103
143
115
109
112
103
IOO
PRICE OF GOLD AND SILVER AND COURSE OF
THE EXCHANGES
In addition to the prices of commodities, it is desirable to study the prices of gold and silver and the
course of the exchanges during the existence of the Bank
restriction. Weekly quotations for standard gold bars,
foreign gold coin, standard silver bullion, and Spanish
silver dollars, as well as the course of exchange on Hamburg, Paris, and Lisbon, are given in the Appendices of
the Commons' and Lords' Reports on Resumption of
Payments, 1819, and continued in the Commons' Report
on the Bank Charter, 1832. The price of gold was published in the money-market only when sales occurred
BRITISH FINANCIAL EXPERIENCE, 1790-1830
in sufficient magnitude to be of significance, and so
many of the quotations are lacking that it was found
desirable to use the price of silver instead of gold for
securing annual averages. Monthly averages for both
silver dollars and gold coin were, however, first obtained
and plotted. These indicated, where comparison was
possible, a nearly perfect correspondence, and hence
justified the use of silver alone for the purpose in hand.
The weekly data for Spanish dollars were accordingly
averaged for each year. The theoretical gold price of
dollars was then calculated according to Soetbeer's
figures of the ratio between gold and silver at Hamburg. 1 Then, for each year, the percentage deviations
of the average price in paper from this approximate
calculated true par were obtained, from 1790 until 1824
inclusive. The results are given in Table 6.
TABLE 6.—ANNUAL AVERAGE PRICES (IN PAPER
AND IN GOLD) OF SPANISH DOLLARS PER OUNCE,
AND DEVIATIONS FROM PAR, 1790-1824
YEAR
Actual
price (paper)
(pence)
179°
6l.O
I79 1
i79 2
1793
1794
1795
1796
1797
1798
1799
1800
1801
1802
1803
1804
1805
1806
1807
1808
1809
1810
1811
1812
1813
1814
1815
1816
1817
1818
1819
1820
1821
1822
1823
1824
61.7
63.9
6O.6
6O.O
62.4
634
6l.6
6O.O
67.2
69.7
65.8
64.4
63.8
63-7
65-4
65.2
63.5
65.6
67.4
71.6
75-i
81.2
75-3
69.2
59.9
61.3
65.1
61.7
58.9
57.9
57-3
57-O
57.8
Theoretical
price (gold)
(pence)
6O.7
60.7
6O.2
60.9
594
58.7
584
59-3
58.6
58.0
58.2
59-i
59.8
59- 2
59-2
57.8
58.8
59-2
56.8
57-3
58.0
58.8
56.7
56.2
60.7
59.8
59-8
60.4
59-5
59-6
58.5
57-3
57-9
57-7
57-7
Deviation
(pence)
+ O.3
+ I.O
+ 3.7
- °-3
+ 0.6
Percentage
deviation
(Units of 1%)
+
+
+
+
O.5
1.6
6.2
0.5
1.0
+ 3.7
+ 5.o
+ 2.3
+ 14
+ 5.3
+ 9.0
+10.6
+ 6.0
+ 5.2
+ 4-6
+ 6.3
+ 8.6
+ 3-9
+ 2.4
+ 9-1
+15.5
+18.0
+ 5-9
+ 6.6
+ 6.0
+ 6.7
+ 8.3
+ 94
+12.8
+18.4
+23.0
+14.6
+ 94 + 0.1
+ 0.9
+ 5.6
+ 2.1
+ 0.4
+ 0.6
- 0.6
~ 0.7
+ O.I
+10.2
+11.2
+10.1
+10.0
+ 8.8
+ 7.8
+11.8
+14-5
+16.2
+21.8
+324
+40.9
+24.1
• +15-7
+ 0.2
+ 1.5
+ 94
+ 3-5
+ 0.7
+ 1.0
— 1.0
— T.2
+ O.2
1
Soetbeer's figures may be found in Laughlin, History of Bimetallism, pp. 19 and 24. The Spanish dollar is taken as 43/48 fine (Dubost, Elements of Commerce, 2, p. 54) causing one ounce to contain
430 grains of fine silver. Since 430 grains of fine gold were equal (at
£3,17s.,101/2d.,per standard ounce) to 913.277d. [Laughlin, Appendix] the price of silver dollars, in gold, would be found by dividing the
287
TABLE 7. —ANNUAL AVERAGE QUOTATIONS
OF LONDON EXCHANGE ON HAMBURG,
AND DEVIATIONS FROM THE PAR
OF EXCHANGE, 1790-1824
YEAR
I79O
1791
1792
1793
1794
1795
1796
1797
1798
1799
1800
l8oi
I8O2
1803
1804
1805
1806
1807
1808
1809
l8lO
l8ll
l8l2
1813
1814
1815
I8l6
1817
I8l8
1819
I82O
I82I
1822
1823
T824
Actual
quotations
3542
35.58
34.5O
36-33
35-65
33-67
33-92
36.75
37.58
34.92
31.67
31.67
33.00
34.25
35.5O
34.83
34.17
34.58
34.08
29-75
29.92
24.92
28.17
27-75
30.42
31-67
36.00
3542
34.25
35- 2 5
37.00
38.25
37.58
38.00
37.25
Ratio of
gold to
silver*
I5.O4
I5.O5
15-17
15.OO
True par f
34-86
34.88
35.16
34.77
35.63
36.04
36.28
35.72
36.14
36.48
36.34
35.83
35-37
3572
3572
36.60
15.37
15.55
15-65
15-41
x
5-59
15.74
15.68
15.46
15.26
I54I
1541
15-79
I5-52
1543
16.08
15.96
15-77
15.53
16.11
16.25
15.04
15.26
15.28
15.11
15.35
15.33
15,62
35.37
3542
35.O2
35-58
35.53
36.21
15.95
15.80
15.84
15.82
36.97
36.62
36.72
36.67
35.97
35.76
37.27
37.OO
36.56
36.OO
37.34
37.67
34.86
Deviations f Percentage
deviation
+
+
+
+
-
O.6
O.7
O.7
1.6
0.02
2.4
2.4
+ 1.7
+ 2.O
-
+ O.I
"
+ I-°3 +
+ 14
+
- 1.6
- 4-7
- 4.2
- 2.4
—
-
i-5
0.2
1.8
1.8
—
1.2
- 3-2
- 7.2
- 6.6
— 11.1
+
+
2.O
+ 4.6
6.7
6.6
2.9
3-9
44
— 12.9
-11.7
- 6.8
- 4.2
- 0.6
-
4-9
5.o
34
8.6'
-18.0
-30.9
-24.6
— 26.2
-12.6
-10.5
9.2
9.9
44
3.7
0.6
0.4
+ 1.7
+ 1.1
- i-3
- 0.3
+ 0.8
- 3.7
- 0.8
+ 2.2
+ i-3
+ 1.0
+
+
+
+
+ 1.3
+ 0.6
3.5
2.7
3.5
1.6
* Corrected by the Hamburg ratio. Cf. footnote above.
f Expressed in schillings, Flemish banco (silver), per pound sterling.
The most satisfactory and also the most significant
exchange quotations are those for Hamburg, at that
time the great entrepot for continental trade.2 The
data for the Paris Exchange are incomplete and somewhat difficult of interpretation, while the usefulness of
the Lisbon rates is lessened by the existence in Portugal
of a depreciated paper currency. The weekly Hamburg
quotations are averaged and expressed in the number
of Hamburg schillings, Flemish banco money, given for
a pound sterling. The usance of the bills was two and
one-half months. Since the Hamburg banco money was
payable in silver, it is necessary, in calculating the true
par, to employ once more the ratio of gold to silver.
ratio of gold to silver into 913.277, on the assumption that the Hamburg ratio would, ordinarily, indicate the ratio in London.
2
Mr. Silberling left for London in July. As we go to press we have
received a letter from him stating that he has secured additional series
of still more significant exchange rates bearing upon the depreciation
of British currency.
388
THE REVIEW OF ECONOMIC STATISTICS
CHART 3. — PERCENTAGE DEVIATIONS FROM PAR OF SPANISH SILVER DOLLARS AND
HAMBURG EXCHANGE, 1790-1824
(DATA GIVEN IN TABLES 6 AND 7)
(a) SPANISH SILVER DOLLARS.
(6) HAMBURG EXCHANGE.
PERCENTAGE DEVIATIONS FROM PAR.
U
"
«
"
This par having been calculated,1 the percentage deviations from it were taken for each year. The data, as
they appear in Table 7, are believed to be as accurate
and complete as it is possible to make them; but for a
perfect measure of the depreciation of the currency from
its standard by means of the exchange it would be necessary to have further data relative to the balance of payments, to the specie points, and to the discount rates at
London and Hamburg. All that can be stated regarding
the specie points is that the cost of transporting specie
to the continent rose from about 3 per cent in 1797 to
about 5 §-7 per cent in 1810, but fluctuated consider1
According to an appendix in the Lords' Report of 1819 (furnished by Dr. Kelly, the cambist) 2§ Hamburg schillings Flemish
banco equaled one Flemish marc banco, of which it took 27! to purchase one marc (Cologne weight) of fine silver equal to 3608 grains
fine. A schilling Flemish banco would, then, be worth 48.7567 +
grains of fine silver. A pound sterling is 113.0016 + grains of fine
gold.
If the market ratio be multiplied, therefore, by
= 2.3177, the result will be the number of schillings given in Hamburg
for the bullion equivalent of a pound sterling.
2
Bullion Reporty Parliamentary Papers, 1810, 3, p. 11.
UNITS OF ONE PER CENT.
«
"
«
"
ably from week to week.2 In 1811, the embargoes
against British trade and the confiscation of British
manufactures in Europe reached a high degree of
effectiveness, and the consequent probable rise of freight
and insurance may have produced the peculiar results
indicated for that year on Chart 3, where the deviations
of the price of silver and the course of exchange from
their respective calculated pars are presented. The
general inverse movement is virtually perfect except
during 1810-12, but deviations of silver are in general
greater than for exchange rates. The maximum price
of silver was reached in 1813, two years after the maximum price level according to Jevons. Comparing the
silver curve of Chart 3 with the two price curves of
Chart 2, it is instructive to observe that: (1) the range
of deviations from 100 per cent is much narrower for
silver than for either Taylor's or Jevons' general commodities; (2) the silver curve increased later and
dropped earlier than any of the curves on Chart 2, in
other words showing a naturally much greater stability
about its par than commodities at large. A detailed
BRITISH FINANCIAL EXPERIENCE, 1790-1830
study of the changes in both silver and gold exchange
would disclose at many points a close connection between their fluctuations and the state of military and
naval operations.1
289
CHART 4. —INTEREST RATES, 1790-1830
(DATA GIVEN IN TABLES 8, 9, 10)
(a) AVERAGE YIELD ON BRITISH THREE P E R CENT CONSOLS,
1790-1830.
(b) AVERAGE INTEREST PAID BY GOVERNMENT ON EXCHEQUER
INTEREST AND DISCOUNT RATES
We now turn to a consideration of interest and discount rates. It has long been customary to measure
the changes in the rate of interest in England by the
calculated yield upon 3 per cent Consolidated Annuities. In order to obtain more reliable figures than are
afforded by the usual average of the yearly high and
low quotations for consols, an annual average has been
taken of the mean of the monthly high and low prices
given by the Gentlemen's Magazine.2 The average
yield is derived in the usual manner by dividing 3 per
cent by the average price, and the results are given in
Table 8.
BILLS, 1790-1830.
(c) AVERAGE YIELD ON WEST INDIA DOCK COMPANY STOCK,
1806-28.
TABLE 8. —ANNUAL AVERAGE PRICE AND YIELD
OF BRITISH 3 PER CENT CONSOLS, 1790-1830
YEAR
I79O
1791
I79 2
1793
1794
1795
1796
1797
1798
1799
I8OO
l8oi
I8O2
1803
1804
1805
1806
1807
1808
1809
l8lO
Average
price
(Units of
£1)
76.89
83.75
9O.O4
75-7O
68.2O
66.37
62.47
50.84
5O.53
59.17
63.64
6O.93
70.89
60.16
56.59
59-3O
61.47
62.74
66.35
68.32
68.41
Yield
(Units of
YEAR
1%)
3-9
3.6
3-3
3-9
4.4
4.5
4.8
5-9
5-9
5.1
4.7
4.9
4.2
5.o
5.3
5.i
4.9
4.8
4-5
4.4
4.4
l8ll
I8l2
1813
1814
1815
1816
1817
1818
1819
1820
1821
1822
1823
1824
1825
1826
1827
1828
1829
1830
Average
price
(Units of
£1)
Yield
(Units of
64.I9
59-72
58.8l
66.79
59-9O
62.I3
75.3O
78.17
7O.93
68.54
7448
79.34
79-51
93.78
89.69
79.62
84.14
85.72
88.83
89.68
4-7
5-o
5-i
4.5
5-o
4.8
4.0
3-8
4.2
4.4
4-o
3-8
3.8
3-2
3.3
3.8
3.6
3-5
3-4
34
1%)
I shall defer comment upon the data until I have
explained several other series of interest rates assembled
on Chart 4.
To ascertain the rate of interest at this time upon
funds invested in private undertakings involves unusual
difficulties. The published quotations of security prices
1
A study of the exchanges from week to week in connection with
political affairs would be desirable, though not possible within the
scope of the present article, in which annual data alone have been
used.
2
Of the trustworthiness of this source William Newmarch testifies
as follows, in an article dealing with Pitt's war finance: "Those
returns (of prices in the magazine) were furnished by the brokers
whose names they bear, and give the highest and lowest price of each
kind of stock on each week-day of each month; and of their accuracy, and sufficiency for the present purpose, there can be no question."
Statistical Journal, (1855) 18, p. 262.
are meagre and must be pieced together from diverse
sources (mainly monthly periodicals). In the second
place, funds were much more frequently invested in
consols and the stocks and shares of docks, insurance
companies, and other undertakings, than loaned at a
fixed rate of interest upon bonds. I have been able to
discover one enterprise, however, which meets our requirements to a fair degree for the years 1806-28. In
the year 1806 there were completed in London the West
India Docks, running through from Blackwall to Limehouse on the Thames. The dock company was formed
in 1799; it opened an import dock with warehouses in
1802, and an export dock, which completed the undertaking, in 1806. The capital of the company, originally
£500,000, was increased to £1,200,000 at the completion
of the construction, and was entirely paid up at that
time. By the terms of the charter the docks were to
enjoy a monopoly of all the shipping with the West
Indies until 1824, and until then the dividends upon the
capital stock were not to exceed 10 per cent per annum
from the time that the entire plant was put into operation. The enterprise was ably planned and managed,
and proved extremely successful. But what is important for the present investigation, the gross dividends
declared remained constant at 10 per cent from 1807
until July 1829, when, according to the Gentlemen's
Magazine, they dropped to 8 per cent. During this
time, therefore, the price of this stock can furnish information as to the rate of interest, which is probably as
accurate and reliable as that which would be given by a
first-class seasoned "public utility" bond at the present time. The quotations of the company's stock are
to be found in several contemporary periodicals: prior
to September 1813, they are taken from the London
Monthly Magazine; thereafter from the Gentlemen's
Magazine, with occasional use of the New Monthly
Magazine and the European Magazine for purposes of
THE REVIEW OF ECONOMIC STATISTICS
290
from time to time to correspond as nearly as possible
to the rate prevailing in the market, but might not
exceed 51/2per cent nor fall below 2 per cent. A considerable proportion of the unfunded debt consisted of such
Exchequer bills. In the Parliamentary Accounts and
Papers for 1857-58, vol. 33, is given a statement of the
capital value and interest charge on Exchequer bills
for each year (ending January 5), from 1696 to 1857.2
Dividing the latter by the former we obtain approximate
figures of the rate of interest actually paid to the holders
from 1790 to 1830. These rates being fixed at stated
intervals (once a year) naturally do not respond to influences bearing upon the money market during those
periods, but nevertheless they will be found a valuable
supplement to our other data (see Table 10).
During the Napoleonic war and continuing down to
the year 1834, the rates of interest and discount in England were subject to the limitations imposed throughout the period of this study by the Usury Laws, which
proclaimed a maximum rate of 5 per cent. The existTABLE 9. —YIELD OF STOCK OF THE WEST INDIA ence of these laws did not, of course, prevent higher
DOCK COMPANY, 1806-28
rates of interest than 5 per cent from being obtained
through security transactions;3 nor did it prevent the
N E T DIVIDEND (EXCLUSIVE OF TAX) AND
ANNUAL AVERAGE PRICE OF THE STOCK*
government from occasionally paying a higher rate.
The Laws did have the effect, however, of discouraging
Actual
Average price
Actual rate
the published statement of the rates of discount (plus
dividends
Net yield
YEAR
of stock f
of dividend
(Units of
(Units of £1) (Units of 1 %)
(Units
of
1
%)
£1000)
commissions) charged by all banks save the Bank of
England.4 The Bank maintained a constant rate of 5
1806
6.2
IO8.6
144.7
9-O5
per cent for the discount of private paper (usually
1807
I46.8
III.2
6.3
9.27
sixty-five day bills) until June 20, 1822, when the rate
1808
6.3
9.61
153-5
"54
on the best securities was lowered to 4 per cent. On
1809
5-6
177.6
IO.OO
I2O.O
l8lO
5.2
December 13, 1825, the rate again became 5 per cent
172.0
9.OO
IO8.O
l8ll
5.6
161.1
9.OO
IO8.O
and remained so until July 5, 1827, when the 4 per cent
I8l2
150.8
9.OO
IO8.O
5.9
rate was resumed and continued through 1830.5
6.2
146.2
9.OO
1813
IO8.O
Let us now examine these statistics of interest rates
1814
156.9
9.OO
IO8.O
5-7
as
they appear together on Chart 4. The course of the
149.2
9.OO
IO8.O
I8I5
6.0
three curves indicates unmistakably the limits of the
145.8
I8l6
IO.OO
I2O.O
6.8
184.6
1817
IO.OO
period
of war strain. By 1819-22 the rate on bills is
I2O.O
5-4
1818
IO.OO
I2O.O
5.o
199-5
precisely what it was during 1789-94. In 1821-22 the
1819
IO.OO
I2O.O
181.8
5-5
yield on consols is clearly back at the pre-war level.
IO.OO
l82O
I2O.O
170.7
5-9
Thus the effects of the war on the market seem to have
I82I
IO.OO
172.1
I2O.O
' 5.8
been
overcome by the opening of the decade of the
1822
184.4
IO.OO
I2O.O
5-4
I
twenties.
1823
IO.OO
I2O.O
i9 -5
5-2
comparison and checking. The quotations were furnished to these magazines by various stock brokers,
and give the ruling market price (sometimes the high
and low, which are never far apart) for about the first
three weeks of each month. Dividends were paid in
January and July, and the stock was frequently, but
not uniformly, quoted ex dividend during these and some
succeeding months; but in converting the monthly
prices into annual averages no correction for this fact
was thought possible or necessary. It is important to
add that during the war the company usually paid
dividends with the property tax deducted; the net
dividends actually paid are to be found in the appendix
to a Parliamentary Report of 1823 in which the company's history and affairs are examined in great detail,
and these have been used in the calculation of the actual
yields.1 These have been obtained by dividing the
dividend by the average yearly price of the stock. The
results appear in Table 9.
1824
1825
1826
1827
1828
I2O.O
I2O.O
I2O.O
I2O.O
I2O.O
IO.OO
IO.OO
IO.OO
IO.OO
IO.OO
The capital was £1,200,000.
236.4
218.7
187.6
202.2
213.8
4.2
4.6
5-3
4.9
4-7
t Par = £100.
As a still further expedient for measuring interest
rates, and particularly those upon securities of intermediate maturity, resort may be had to the interest
paid by the government on Exchequer bills. These were
securities issued annually for current expenses and usually against the revenues of the succeeding years, and
at the option of the holder might be redeemed at the
end of one year at par, or converted into the subsequent
issue. The rate of interest allowed on them was varied
1
Report from the Select Committee (Commons') Appointed to Consider the Means of Improving and Maintaining the Foreign Trade of the
Country. West India Docks. — With minutes of evidence and appendix; 1823. (Parliamentary Papers, 1823, vol. 1.) Brief accounts of
the docks will be found in Palgrave's Dictionary, Rees's Cyclopedia,
vol. xii, (1809), art. Docks; and in earlier editions of the Encyclopedia
Britannica.
2
Following the table is an historical and descriptive account of
Exchequer bills (pp. 94-105). See also Penny Cyclopedia, vol. 10
(1837), sub nom: Charles Fenn, Compendium of the English and
Foreign Funds, and Wm. Fairman, Public Funds of England.
3
See the evidence given by David Ricardo and others before the
Committee of the Commons appointed in 1818 to inquire into the
Usury Laws.
4
The only market rates of discount thus far obtained are those of
Overend, Gurney and Co., monthly, from 1824 to 1847. (Lords'
Report of 1848, p. 467.) It is barely possible that by intensive search
among the records of some of the older banking houses, materials
may be found throwing light upon these rates for earlier years.
5
Charles Fenn, Compendium of the English and Foreign Funds,
14th ed., p. 74.
BRITISH FINANCIAL EXPERIENCE, 1790-1830
TABLE
10. — UNREDEEMED
291
CAPITALS, ANNUAL
TABLE 11. — (a) ANNUAL AVERAGE OUTSTANDING
CHARGE, AND COMPUTED RATE OF INTEREST
NOTES OF THE BANK OF ENGLAND, 1792-1830;
ON EXCHEQUER BILLS, 1789-1830
(6) ANNUAL AVERAGE COMMERCIAL PAPER UNDER DISCOUNT AT THE BANK OF ENGLAND IN
YEAR
Capital values
(Units of £1000)
Interest paid
(Units of £1000)
Interest rate
(Units of 1%)
LONDON, 1795-1826; (c) DIFFERENCE BETWEEN
NOTES AND DISCOUNTS, 1795-1826
1789
I79O
1791
I79 2
I7Q3
1794
1795
1796
1797
1798
1799
18OO
l8oi
I8O2
1803
1804
1805
1806
1807
1808
1809
l8lO
l8ll
l8l2
1813
1814
1815
l8l6
1817
I8l8
1819
I82O
l82I
1822
1823
1824
1825
1826
1827
1828
1829
1830
5,6OO
6,829
6,958
7,455
5,796
8,406
7,4ii
6,572
11,688
17,608
22,043
X
9,°33
i4,35o
17,862
24,549
26,311
27,141
3i,7O4
38,758
39?o67
37,786
40,918
42,528
44,755
56,988
41,442
44,463
56,975
43,765
37,250
31,036
3i,566
36,281
34,742
32,39%
27,994
24,566
27,547
27,657
25,490
25,610
25,55!
168
2O5
209
224
174
252
394
35O
3.O
3-o
3-o
3-o
3-o
3-o
5-3
5-3
5-3
5-3
5-3
4.6
4.6
5-3
5-3
5-3
5-3
5-3
4.4
622
937
M73
S6S
655
95i
x
,3O7
1,400
i,445
1,688
1,709
1,766
1,604
4.5
4.2
4-3
4-7
4.8
4.9
4.8
4.3
3-5
2.8
2.8
i,773
2,014
2,148
2,799
1,972
1,929
1,976
1,244
1,049
944
960
3-o
3-o
3-o
3-o
2.4
1,103
i,o57
787
653
747
838
841
716
584
584
2.3
3-o
3-o
3-o
2.8
.
2.3
2.3
Until the end of the war it is seen that the fluctuations
of the yield on consols and the interest on Exchequer
bills follow the same general course, the former being
usually somewhat higher. After 1815, the rate paid
on bills falls considerably below the yield of consols.
The yield on the West India Dock stock, so far as these
figures go, bears a remarkably close relation to the yield
on consols, being approximately 1 per cent above it,
except in the year 1816. This demonstrates clearly that
ordinarily the yield upon consols may be taken. as a
fairly close indication of variations in the general condition of the market for capital. The divergence of the
two curves in 1816 is, however, of considerable importance, the fall of the consols rate being due to the
political circumstances attending successful termination
(MILLIONS STERLING)
YEAR
1792
1793
1794
1795
1796
1797
1798
1799
18OO
I8OI
I8O2
1803
1804
1805
1806
1807
1808
1809
l8lO
l8ll
l8l2
1813
1814
1815
1816
1817
1818
1819
I82O
I82I
1822
1823
1824
1825
1826
1827
1828
1829
1830
Notes
Discounts
Difference *
II.4
11.6
10.8
"•5
2.9
10.2
3-5
5-4
4.5
5-4
6.4
7-9
7.5
10.7
11.0
12.6
13.5
i5-i
15.8
16.7
16.5
17.4
16.9
16.8
16.7
17.1
18.9
22.5
23.3
23.2
24.0
26.9
26.9
26.6
28.2
27.2
2
5-i
23-9
21.6
17.9
18.6
10.0
11.4
12.4
x
3-5
13.0
!5-5
20.1
14.4
14-3
12.3
13-3
14.9
11.4
4.0
4.3
6.5
3-9
2.7
8.6
6.7
5-6
8.1
8.1
8.7
7.9
9.2
5.8
7-4
5-5
44
3-2
4.1
3-4
2.4
8. 9
8.9
11.7
13.6
12.0
15.2
24.2
22.9
18.6
20.0
3-4
3-i
2.4
18.9
14.5
15-5
17.7
22.3
4.9
4.9
17.4
21.5
f
20.1
20.1
15.2
f
21.0
19.6
20.5
* Difference gives approximately notes issued to purchase Exchequer bills and specie.
f After 1826 the discounts given in the account do not include
those at the branch banks which were started in 1827.
of the long war in the preceding year; while the rise in
the yield from the West India dividends bears accurate
witness to the severe crisis which occurred in 1816 —
concerning which there is abundant corroborative testimony in other quarters.1 It is quite possible that the
fall of the rate on consols in 1802 should be interpreted
in the same manner, for a similar reason.
1
See Tooke, History of Prices, vol. 2, chap. 6; and Bouniatian,
Geschichte der Handelskrisen in England, pp. 226 ff.
292
T H E REVIEW OF ECONOMIC STATISTICS
CHART 5. — OUTSTANDING CIRCULATION AND DISCOUNT OF COMMERCIAL PAPER, AND DIFFERENCE
BETWEEN NOTES AND DISCOUNTS OF THE BANK OF ENGLAND
(DATA GIVEN IN TABLE I I )
(a) ANNUAL AVEEAGE OUTSTANDING CIRCULATION OF THE BANK OF ENGLAND, I 792-1830.
UNITS OF £1,000,000 STEELING.
(b) ANNUAL AVERAGE DISCOUNTS OF COMMERCIAL PAPER HELD BY BANK OF ENGLAND, 1795-1826.
"
"
"
"
(c) EXCESS OF NOTES OVER DISCOUNTS, 1795-1826.
"
"
"
u
on Chart 5. Unfortunately, we do not possess official
In passing to statistics of currency, we may begin annual data for either of these last mentioned accounts.
with the note circulation of the Bank of England. In The nearest approximation to them are figures for but
Appendix 82 to the Report of the Committee on the Bank two days in each year, one at the end of February, the
Charter of 1832, there are data of the average outstand-other at the end of August— to be found in Appendix
ing bank notes for each quarter year from 1792 to 1831. 5 of the Report for 1832. It would be unsafe to attempt
From these quarterly averages annual averages were to employ such meagre data for comparison with, and
derived. In Appendices 56 and 58 of the same Report, further elaboration of, the above statistics; but since
the quarterly average and also annual average holdings during the restriction the specie holdings of the Bank
of private commercial paper discounted by the Bank are probably did not fluctuate with very great suddenness,
given; and these annual figures have been placed to- the February-August data for the reserve may be pregether with the outstanding circulation in Table 11. sented for purposes of a rough comparison (Table 12).
Appendices 24 and 32 of the Report give the average These figures permit the statement, in a general way,
public and private deposits in the Bank beginning with that the Bank made considerable purchases of bullion
1807,1 from which it appears that the private deposits from 1798 to 1800, 1805 to 1808, and subsequent to
were very moderate and steady, varying between one 1816, when preparations began for the resumption of
and two millions at the outside. The great bulk of the cash payments.
Making due allowance for the issue of notes for
private discounts therefore involved note issues. If,
specie,
it appears from the different curves on Chart 5
then, the difference between the average discounts and
the average total circulation be taken, the result will that the advance in notes made by the Bank directly or
indicate with fair accuracy the notes issued by the Bank indirectly to the government were extremely small durfor the purchase from the public or the government of ing the war, and during 1805-10 almost negligible. The
Exchequer and Treasury bills (the only forms of public magnitude of the credits granted to the government in
security in which the Bank then invested) and for the other forms can be very roughly seen only for the period
purchase of bullion and coin. The results are plotted after 1807 in the data of the annual average public
deposits. (See Table 13.) These vary but little from
1
Prior to 1807 no distinct accounts were kept at the Bank for
year
to year, and decline sharply after 1816. The
public and private deposits.
CURRENCY
BRITISH FINANCIAL EXPERIENCE, 1790-1830
293
TABLE 12. — GOLD RESERVES OF THE BANK OF TABLE 13. —ANNUAL AVERAGE PUBLIC DEPOSITS
ENGLAND: (a) BULLION AND COIN HELD BY
HELD BY THE BANK OF ENGLAND, 1807-1830*
THE BANK OF ENGLAND ON FEBRUARY 28 AND
(UNITS or £100,000)
AUGUST 3 1 , 1790-1830; (6) AVERAGE OF FEBRUARY 28 AND AUGUST 31
Year
Average
Year
Average
Year
Month
Reserve
(Units of
£1000)
I79O
1791
Feb. 8,633
Aug. 8,386
Feb. 7,869
Aug. 8,056
Feb. 6,468
Aug. 5,357
Feb. 4,011
I Aug. 5>322
Feb. 6,987
Aug. 6,770
f Feb. 6,128
Aug. 5,136
Feb. 2,540
Aug. 2,123
| Feb. 1,086
Aug. 4,090
Feb. 5,829
Aug. 6,546
Feb.
7,564
Aug. 7,000
Feb. 6,144
Aug. 5,150
Feb. 4,640
Aug. 4,335
Feb. 4,153
Aug. 3,892
Feb. 3,777
Aug. 3,592
Feb. 3,372
Aug. 5,879
Feb. 5,884
Aug. 7,624
Feb. 5,987
Aug. 6,215
Feb. 6,143
Aug. 6,484
Feb. - 7,855
Aug. 6,016
Feb. 4,489
Aug. 3,652
Feb. 3,5oi
Aug. 3,192
[
f
/
1793
1794 f
1792
1795
1796
1797
I798
1799
I8OO
l8oi
I8O2
1803
1804
1805
1806
1807
1808
1809
l8lO
{
{
{
{
{
{
{
{
{
{
{
{
{
Average
Reserve
(Units of
million £)
} 8.5
}
}
} 4.6
} 6.9
} 5.6
}
}
}
} 7.3
} 5.6
} 44
} 4.o
} 3-7
} 4.6
} 6.8
}
} 6.3
} 6.9
}
} 3-4
Year
Month
£1000)
l8ll
8.O
l8l2
6.O
1813
Feb.
[ Aug.
Feb.
| Aug.
Feb.
[ Aug.
1814
1815
|
I8l6
1817
[
2.6
I8l8
f
6.2
1819
2.3
6.1
4.0
Reserve
(Units of
I82O
I82I
1822
1823
1824
1825
1826
1827
1828
1829
1830
{
{
{
{
{
{
{
{
{
{
{
{
{
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Feb.
Aug.
Average
Reserve
(Units of
million £)
3,351
3,243
2,983
3,O99
} 3-3
} 3-o
2,884
2,712 }
2,2O4
2,098 }
2,O37
3,4O9 }
4,641
7,563 }
9,68l
10.7
11,668 }
,o55
6,363 }
4,185
3.9
3,595 }
4,9n
8,211 } 6.5
11,870
11.6
",234 }
,o57 10.6
10,098 }
10,384
12,658 } " • 3
13,810
12.8
11,787 }
8,779
3,634 }
2,460
4.6
6,754 }
10,159
10.6
10,464 }
!o,347 10.4
10,499 }
6,835
6.8
6,796 }
9,i7i
9.6
11,150 }
2.8
2.2
2.7
IO
8.2
1819
I82O
l82I
1822
1823
1824
1825
1826
1827
1828
1829
183O
12.6
11.8
11.1
12.0
10.2
10.4
10.4
12.2
11.7
10.8
8.7
4.5
3.7
3-9
4.1
5.5
7.2
5.3
4.2
4.2
3*
3-9
4.8
* Commons1 Report of 1832, Appendix.
6.1
TABLE 15. —VALUES OF ENGLISH COUNTRY BANK
NOTES (OF £ 1 AND £5) STAMPED I N EACH
YEAR: ONE POUND NOTES, 1805-25; FIVE
POUND NOTES, 1805-30; ONE AND FIVE POUND
NOTES COMBINED, 1805-25
(UNITS OF £1,000,000 STERLING)
Year*
£1 notes
£5 notes
£1 and £5 notes
3.75
5.O6
3.23
2.29
3-°6
8.31
5^3
443
7.27
8.94
5.98
5-94
4.21
7.22
3.76
2.75
2.35
7-79
6.15
4.98
4.16
6.79
7.27
2.98
2.67
3.39
3.15
3.22
4.62
5.60
Ix
6.2
advances in the form of notes made by the Bank to the
mercantile community and to other banks are the outstanding feature of its accounts. During the war, the
market rate of interest was frequently above, or very
little below, thefixedBank rate of 5 per cent, and the
Bank directors pursued a policy of granting as liberal
accommodation to commerce as was consistent with
their customary limitations respecting the quality of the
paper accepted. One consequence of the Bank's fixed
discount rate (until 1822) was that, in periods of
financial strain, the Bank was called upon to grant an
extra measure of accommodation, so that the maximum
points upon the curve of its discounts do not, in all cases,
1807
I8O8
1809
l8lO
l8ll
l8l2
I8I3
1814
1815
I8l6
1817
I8l8
i8oq
1806
1807
1808
1800
1810
1811
1812
1813
1814
181c;
1816
1817
1818
1810
1820
1821
1822
1823
1824
1821?
1826
1827
1828
1820
1830
2.40
2.14
3.O8
4.75
2.88
2.88
3.01
4.03
34O
2.63
1.86
3.28
3.54
1.68
1.66
2.17
1.85
1.90
2.45
3-O4
4.19
4.I9
3.IO
2.30
3.5i
3.73
13.0
I.OI
1.22
1.30
1.32
2.17
2.56
.70
1.23
1.88
1.67
i-35
* Year beginning January 6.
coincide with the peaks of the price curve.1 After 1816
the rate of interest paid by the government on Exchequer bills declined so greatly that the Bank was forced
to carry a much larger amount; and the investment by
1
The Bank's discounts together with other data are compared
with prices in Chart 6.
THE REVIEW OF ECONOMIC STATISTICS
2Q4
TABLE 14. — (a) AMOUNT OF STAMP DUTY PAID IN EACH YEAR BY COUNTRY BANKS ON PROMISSORY
NOTES; (b) ESTIMATED VALUE OF NOTES STAMPED
OFFICIAL YEARS; AND CHANGES OF DUTY
Duties imposed by 44 Geo. Ill, ch. 98 (1804)
Year ended January 5, 1806
"
«
"
"
«
"
" 1807
" 1808
January 5, 1808 to October 10, 1808
Duties imposed by 48 Geo. Ill, ch. 149 (1808)
October 10, 1808 to January 5, 1809
Year ended January 5, 1810
«
«
«
"
«
«
"
"
«
«
"
«
"
«
1811
1812
1813
1814
1815
January 5, 1815 to October xo, 1815
Duties imposed by 55 Geo. Ill, ch. 184 (1815 )
October 10, 1815 to January 5, 1816
Year ended January 5,1817
«
«
«
«
«
"
"
«
«
.«
«
«
«
«
«
«
«
«
«
«
"
"
«
«
«
«
"
«
«
«
«
"
«
"
"
"
«
«
«
«
«
«
«
«
«
«
«
1818
1819
1820
1821
1822
1823
1824
1825
1826
1827
1828
1829
1830
1831
1832
(a)
(b)
(a)
(b)
Not exceeding
£1/1
Value of notes
(taken at £1)
Notes over £2/2,
not over £5/5
Value of notes
(taken at £5)
At tf. Uo)
£40,580
29,964
26,774
16,808
At**. Orb-)
£37,960
£3,246,000
2,397,000
2,142,000
1,344,000
24,258
17,154
20,380
At is. (yta)
At Ad. {-h)
£28,978
79,111
48,019
47,941
50,162
67,191
56,694
21,421
£1,739,000
4,747,000
2,881,000
2,876,000
3,010,000
4,031,000
3,402,000
1,285,000
£14,742
41,935
3O,977
30,651
42,144
37,6O9
27,479
IX
At sd. (is)
£27,952
38,701
68,380
73,656
35,O99
34,600
45,159
38,616
39,695
51,028
63,310
£5,061,000
3,234,000
2,287,000
2,717,000
,959
£1,474,000
4,193,000
3,098,000
3,065,000
4,214,000
3,761,000
2,748,000
1,196,000
At is. sd. (A)
£1,342,000
1,858,000
3,282,000
3,535,000
1,685,000
1,661,000
2,168,000
1,854,000
1,905,000
2,449,000
3,039,000
£14,417
28,715
j
1
43,&14
46,598
16,259
12,636
15,233
16,201
16,449
27,157
31,934
8,725
15,369
23,545
20,897
16,882
18,142
£1,153,000
2,297,000
3,508,000
3,728,000
1,301,000
1,011,000
1,219,000
1,296,000
1,316,000
2,172,000
2,555,ooo
698,000
1,230,000
1,884,000
1,672,000
1,350,000
1,451,000
the Bank in public securities was made all the more
necessary by the fact that the market rate of discount
on commercial paper fell much further below the Bank
rate than it had been in the earlier years.1 From 1821
on the amount of accommodation granted by the Bank
to the mercantile community was no greater than at the
opening of the war period.
Statistics of the metallic circulation of England for
this period do not exist. We know simply that soon
after the commencement of the Bank restriction, in
1797, specie began to disappear from circulation, and
its place was taken by paper. The loss of the gold coin
was earliest and most seriously felt (the silver being in a
much more worn and degraded condition), and the Bank
consequently was permitted to issue, during the con-
tinuance of the suspension, notes of one and two pounds.
In 1798 the country banks likewise were given this
privilege, which lasted until 1829. Other important
substitutes were (1) the Exchequer bills of the government, which were negotiable and passed not only in
payments to the government but to some extent in
ordinary transactions; (2) the notes and checks of the
country banks; (3) inland bills of exchange. The
last were very commonly circulated in commercial
dealings, being endorsed from holder to holder until
completely covered with signatures. In the West
Riding, bills of exchange were long used almost to the
exclusion of other forms of large currency. Of the
amount of these bills created there are no immediately
available statistics for our period, except estimates for
1
I have not attempted to include data of the note circulation in
Scotland or Ireland. It may be mentioned, however, that after the
restriction of cash payments had been extended by Parliament to the
Bank of Ireland, an extraordinary increase of its notes, as well as of
the circulation issued by countless country banks and even trades-
men, took place. A rapid depreciation, observable in the prices of
goods and specie and in the Irish exchanges, took place, culminating
in 1804. As the result of a Parliamentary inquiry in that year, greater
caution was observed by the Irish Bank, and steps were taken to
limit the provincial paper.
BRITISH FINANCIAL EXPERIENCE, 1790-1830
295
CHART 6. — SMALL COUNTRY BANK NOTE CIRCULATION, GENERAL PRICES, INTEREST RATES,
AND BANK *OF ENGLAND DISCOUNTS
(DATA GIVEN IN TABLES 2, 9, n ,
(a)
(b)
15)
ESTIMATED CIRCULATION OF SMALL COUNTRY BANK NOTES, 1805-30.
JEVONS' INDEX NUMBERS OF PRICES OF FORTY COMMODITIES, 1782-1830.
(c) AVERAGE YIELD OF WEST INDIA DOCK COMPANY STOCK, 1806-28.
(d) DISCOUNTS OF BANK OF ENGLAND, 1795-1826.
UNITS
UNITS
UNITS
UNITS
OF £1,000,000.
OF T E N PER CENT.
OF ONE PER CENT
OF £1,000,000.
allowance for the practically unknown quantity of this
bill
circulation.3
a reliable Wakefield banker, calculated from the reA stamp tax was imposed, not only upon bills of
turns of bill stamps, which he obtained directly from
exchange,
but also upon bankers' reissuable notes, bethe Stamp Office, that in those years the total amounts
1
ginning October 1804. The returns of the Stamp
of bills drawn were as follows:
Office of receipts from the stamps on the notes of bankTotal bills drawn
Bills outstanding
1815
£649,921,163
£l62,OOO,OOO
ers, from that year until 1831, are to be found in the
1824
316,363,783
79,000,000
Report of 1832, Appendix 99. The rates of duty on
1825
354,405,293
87,000,000
each class of notes were twice increased, in 1808 and in
1815, 1824, 1825, and 1826-27. Mr. William Leatham,
1826-27*
1835
282,222,305
405,403,051
71,000,000
101,000,000
* Last half of 1826; first half of 1827.
Leatham calculated (for other than the above years)
that the average amount of bills outstanding at a given
time was one-fourth of the total number created,2 and
the figures inserted in column 2 are obtained in this
manner.
In any statement of the displacement of coin by paper
during the restriction, it is most important to make
1
Letters to William Raynor Woody 26. series, 1841, p. 13. Leatham
included estimates for the years 1832-39. See also Newmarch, Statistical Journal, (1852), 14, p. 143. The accessible published returns of
the Stamp Office were found by the present writer not to give sufficiently complete returns to permit a calculation of the amounts
created for other years.
2
Assuming the average maturity to be three months.
3
Thus Bouniatian, op. cit., pp. 217, 218, takes an estimate of the
gold coin in 1798 as 35 millions sterling (Lord Liverpool) and in 1811
as 3 millions (George Rose) and, adding these respective amounts to
the Bank circulation, he obtains a total of 46.3 millions and 26.0 millions, respectively, and draws the conclusion that upon the whole the
currency was not enlarged.
THE REVIEW OF ECONOMIC STATISTICS
296
TABLE 16. —PUBLIC DEBT OF GREAT BRITAIN AND IRELAND, 1790-1830*
(UNITS OF £1,000)
FUNDED D E B T
UNFUNDED D E B T
TOTAL
DEBT
YEARf
Great Britain
Ireland
Great Britain
Ireland
I790
229,952
1,586
1791
227,989
1,625
9,5O9
9,42O
629
629
I79 2
232,065
1,970
12,656
1793
1794
244,936
297,392
2,941
4,469
I4,38i
18,490
1,183
1,064
I79S
1796
349,947
375^60
5,377
6,366
7,4H
1797
406,829
8,107
6,572
11,688
1798
413,543
9,824
17,608
1799
1800
435,X45
485,184
12,002
22,043
11,860
I9,O33
1801
508,924
1802
515,158
1803
1804
53^643
559,625
13,307
13,103
14,160
1S05
1806
577,841
585,960
1807
1808
586,833
596,414
1809
606,416
18,375
17,886
1810
615,518
1811
Great Britain
Ireland
GENERAL
TOTALS
United
Kingdom
241,676
239,461
2,215
237,409
244,721
2,255
239,663
3,153
4,005
247,874
I,III
259,318
315,882
1,164
862
357,357
381,732
5,58o
263,323
321,463
6,541
7,228
363,899
388,960
902
418,517
9,009
427,526
1,348
1,704
1,436
43i,i5i
457,i89
504,216
H,I73
13,706
442,324
470,894
I4,35O
17,862
1,072
14,379
537,653
I,6lO
523,274
533,020
J
4,7i3
547,733
24,549
26,311
27,141
779
556,192
29
585,936
604,982
*4,939
X
3,934
16,114
57i,i3i
599,87o
621,097
31,704
37o
617,663
16,143
633,806
38,758
39,o67
501
606
!7,955
18,981
106
1,699
643,546
654,461
662,194
20,065
37,786
40,918
625,591
635,480
644,202
640,348
21,062
42,528
2,316
656,436
682,876
1812
717,5^
763,064
727,767
792,033
45,554
57,78o
42,229
2,516
1813
1814
22,514
25,092
1815
772,765
1816
1817
755,738
768,802
1818
770,158
1819
1820
777,3o8
771,062
24,258
1821
77o,74i
1822
765,361
25,789
26,341
1823
753,i68
27,955
1824
747,072
13,905
16,114
15,773
17,454
24,278
23,435
21,004
23,065
24,822
24,251
44463
56,975
43,765
37,25O
31,036
31,566
38,677
35,778
37,900
13,295
i7,99i
21,764
678,200
23,378
25,030
706,254
788,094
2,501
2,498
785,547
834,263
275,93
26,776
813,140
5,3O5
5,665
817,228
812,713
28,740
845,968
26,669
839,382
4,95o
4,300
2,300
812,568
28,015
840,583
807,409
29,122
808,343
802,628
26,558
836,531
834,901
809,418
1,105
25,356
861,039
827,984
835,207
801,140
25,789
26,341
....
791,068
27,955
819,024
31,703
25,025
27,622
....
778,775
809,831
....
777,135
774,3o8
768,800
31,056
31,692
30,790
805,099
31,233
31,626
800,032
32,131
784,804
32,927
782,717
1825.
752,no
31,056
31,692
1826...,
746,686
30,790
1827
741,090
27,710
....
1828
739,626
31,233
31,626
25,548
....
1829
1830
725,356
722,616
32,131
27,317
32,927
27,173
* From Parliamentary Accounts and Papers, 1857, 1858, 33.
....
....
765,173
752,672
749,789
827,480
808,826
796,800
t Year beginning January 6.
1815, at which times the circulation outstanding could
not be reissued, but was replaced by new notes bearing
the higher stamps.1 If a calculation were made of the
notes stamped, the results would be affected by the
larger demand for stamps directly after a change in the
scale of duties. This circumstance, however, is probably of no great consequence for the notes of the smaller
denominations — particularly those of one pound —
since these circulated so rapidly and became so worn in
the space of a year that a considerable proportion of
them would in any case be replaced by new notes within
a year's time. If then a calculation is made for the
smaller notes, the results will be of value in indicating
at least the scale of fluctuations in the notes circulated
by the provincial bankers outside the London area.
Such a calculation has been made of the notes falling in
two of the several classifications, namely, (1) notes not
exceeding £1, is., which are assumed to be mainly one
pound notes, and (2) notes falling between £2, 2s. and
£5, $s.9 which are taken as five-pound notes, on the
1
It is not wholly clear whether the notes were actually called in or
simply not again reissued; but in the former case the process would
not have been sufficiently immediate to affect the assumptions made
in the course of the analysis.
BRITISH FINANCIAL EXPERIENCE, 1790-1830
297
CHART 7. —FUNDED AND UNFUNDED DEBT OF GREAT BRITAIN, 1790-1830
(DATA GIVEN IN TABLE
(a) FUNDED DEBT.
UNITS OF
£10,000,000.
average. The results obtained by dividing the stamp
receipts by the rates of duty are given in Tables 14 and
15. The data are plotted on Chart 6, together with
Jevons' index numbers of general prices, the rate of
interest derived from the yield of West India Dock dividends, and the Bank of England discounts. The correspondence between the curves is extremely close. A
lag is to be observed between the country issues and
prices, which is probably due in part to the failure of
Jevons' index numbers to include the entire year. The
country banks, relieved like the Bank of England from
meeting their obligations in specie, appear to have taken
an active part in bringing about those successive speculative oscillations in prices which are the striking feature
of the war period. When the money market \^ as i n a n
easy condition speculative operations were set on foot,
the banks increased their discounts, many of them rediscounting directly or indirectly at the Bank of
England, and in return receiving Bank notes capable of
sustaining further local advances.
16)
(b) UNFUNDED DEBT.
UNITS OF
£I,000,000,
PUBLIC DEBT
Mention has already been made of the purchase by
the Bank of England of government securities in the
form of Exchequer bills; in conclusion a presentation of
the total magnitude both of these and of the funded
debt is desirable. Figures for the unfunded debt (consisting primarily of Exchequer bills during the war) and
for the funded debt are contained in the Parliamentary
Accounts and Papers of 1857-58, volume 33. These
data are for official years, ending January 5th, and are
presented in Table 16 for the corresponding calendar
years. The figures are plotted on Chart 7. The funded
debt reached its maximum in 1814, and the unfunded
debt in 1813 and 1816. The use of government securities as collateral for private loans at the local banks is
a topic upon which further research is needed to furnish
sufficient information; but presumably the practice occurred upon a considerable scale and in this manner
the borrowing operations of the government contributed indirectly to augment the volume of the currency.
{For Taylor's index numbers of prices and bibliography see Appendix, pp. 321-323.)
@FedFRASER