THREE:In October of this year Chatham at length resigned, and Parliament assembled on the 8th of November. The two great objects which engrossed the attention of Government in these days were North America and John Wilkes. The news of the Act imposing import duties had reawakened all the indignation of the people of Massachusetts. The Bostonians took immediate steps to realise their doctrines. In October, 1767, the chief men there met, and entered into a bond to purchase or wear no English manufacture, but to encourage domestic manufacture till these obnoxious import duties were withdrawn. The Massachusetts Assembly passed strong resolutions to the same effect, and Mr. James Otis, who had been most active in contending for them, exerted himself, through the press, to circulate them all over America. Causes were not long wanting for testing the resolution of the people of Massachusetts. The governor of that colony, Francis Bernard, was precisely the man to bring the matter to a crisis. He was able, determined, and of a hot temper. The people hated him, because they knew that he was writing home despatches full of the most unfavourable representations of their proceedings and designs. He refused to confirm the nomination of such members of the council as he knew were opposed to the new regulation; and Lord Shelburne supported him in his act. In consequence, the Assembly addressed a circular letter to all the other colonies, calling on them to unite in defeating the new duties. Bernard in vain opposed the resolution authorising this circular letter; and, on his report, Lord Hillsborough instructed him to demand from the Assembly the rescinding of the resolution. The Assembly refused, declaring that if a British Minister could control the votes of provincial Assemblies, liberty was but a mere show. Lord Hillsborough had instructed Bernard to dissolve the Assembly in case it refused to rescind the resolution. In the meantime, events took place which might have caused a more judicious man to pause ere he fulfilled these instructions.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.
