THREE:The distress which had pressed so severely on the people, and which had set them thinking about the most perilous political changes, was intimately connected with the state of the country. Throughout the troubled period of almost incessant war and lavish expenditure between 1797 and 1815, the business of the nation was carried on with an inconvertible paper currency, the precious metals having nearly all departed from the country. Bank notes were issued in such quantities, to meet the exigencies of the Government, that the prices of all commodities were nearly doubled. The Bill which was passed in 1819 providing for the resumption of cash payments had reduced the currency from 48,278,070, which was its amount in 1819, to 26,588,000, in 1822. The consequence was the reduction of prices in the meantime, at the rate of fifty per cent., in all the articles of production and commerce. With this tremendous fall of prices, the amount of liabilities remained unchanged; rents, taxes, and encumbrances were to be paid according to the letter of the contract, while the produce and commoditiesthe sale of which was relied upon to pay themdid not produce more than half the amount that they would have brought at the time of the contracts. The evil of this sudden change was aggravated by the South American Revolution, in consequence of which the annual supply of the precious metals was reduced to a third of its former amount. It was peculiarly unfortunate that this stoppage in the supply of gold and silver occurred at the very time that the Legislature had adopted the principle that paper currency should be regarded as strictly representing gold, and should be at any moment convertible into sovereigns. A paper currency should never be allowed[238] to exceed the available property which it represents, but it is not necessary that its equivalent in gold should be lying idle in the coffers of the Bank, ready to be paid out at any moment the public should be seized with a foolish panic. It is enough that the credit of the State should be pledged for the value of the notes, and that credit should not be strained beyond the resources at its command. The close of 1822 formed the turning-point in the industrial condition of the country. The extreme cheapness of provisions, after three years of comparative privation, enabled those engaged in manufacturing pursuits to purchase many commodities which they had hitherto not been able to afford. This caused a gradual revival of trade, which was greatly stimulated by the opening of new markets for our goods, especially in South America, to which our exports were nearly trebled in value between 1818 and 1823, when the independence of the South American Republics had been established. The confidence of the commercial world was reassured by the conviction that South America would prove an unfailing Dorado for the supply of the precious metals. The bankers, therefore, became more accommodating; the spirit of enterprise again took possession of the national mind, and there was a general expansion of industry by means of a freer use of capital, which gave employment and contentment to the people. This effect was materially promoted by the Small Note Bill which was passed in July, 1822, extending for ten years longer the period during which small notes were to be issued; its termination having been fixed by Peel's Bill for 1823. The average of bank-notes in circulation in 1822 was 17,862,890. In November of the following year it had increased by nearly two millions. The effect of this extension of the small note circulation upon prices was remarkable. Wheat rose from 38s. to 52s., and in 1824 it mounted up to 64s. In the meantime the bullion in the Bank of England increased so much that whereas in 1819 it had been only 3,595,360, in January, 1824, it amounted to 14,200,000. The effect of all these causes combined was the commencement of a reign of national prosperity, which burst upon the country like a brilliant morning sun, chasing away the chilling fogs of despondency, and dissipating the gloom in the popular mind.To this communication Sir Robert Peel returned the following reply:"Sir Robert Peel presents his humble duty to your Majesty, and has had the honour of receiving your Majesty's note this morning. Sir Robert Peel trusts that your Majesty will permit him to state to your Majesty his impression with respect to the circumstances which have led to the termination of his attempts to form an Administration for the conduct of your Majesty's service. In the interview with which you honoured Sir Robert Peel yesterday morning, after he had submitted to your Majesty the names of those he proposed to recommend to your Majesty for the principal executive appointments, he mentioned to your Majesty his earnest wish to be enabled, by your Majesty's sanction, so to constitute your Majesty's Household that your Majesty's confidential servants might have the advantage of a public demonstration of your Majesty's full support and confidence, and at the same time, so far as possible, consistent with such demonstration, each individual appointment in the Household should be entirely acceptable to your Majesty's personal feelings. On your Majesty's expressing a desire that the Earl of Liverpool should hold an office in the Household, Sir Robert Peel immediately requested your Majesty's permission at once to confer on Lord Liverpool the office of Lord Steward, or any other office which he might prefer. Sir Robert Peel then observed that he should have every wish to apply a similar principle to the chief appointments which are filled by the Ladies of your Majesty's Household; upon which your Majesty was pleased to remark, that you must retain the whole of these appointments, and that it was your Majesty's pleasure that the whole should continue as at present, without any change. The Duke of Wellington, in the interview to which your Majesty subsequently admitted him, understood also that this was your Majesty's determination, and concurred with Sir Robert Peel in opinion that, considering the great difficulties of the present crisis, and the expediency of making every effort, in the first instance, to conduct the public business of the country with the aid of the present Parliament, it was essential to the success of the mission with which your Majesty had honoured Sir Robert Peel that he should have such public proof of your Majesty's entire support and confidence, as would be afforded by the permission to make some changes in your Majesty's Household, which your Majesty resolved on maintaining entirely without change. Having had the opportunity, through your Majesty's gracious consideration, of reflecting upon this point, he humbly submits to your Majesty that he is reluctantly compelled, by a sense of public duty, and of the interests of your Majesty's service, to adhere to the opinion which he ventured to express to your Majesty." Subsequent explanations proved that the gaucherie of Sir Robert Peel was chiefly responsible for the crisis. He was right in principle, but he was wrong in the abrupt manner in which he appeared to force the change of the Ladies upon the Queen. The Duke, with his usual shrewdness, had foreseen that the accession of a female Sovereign would place the Conservatives at a disadvantage, because, said he, "Peel has no manners, and I have no small talk."
