*a/btu sitiypitmott,

FEBRUARY 6, 1858.

BOOKS.

BANNISTER'S LIFE OF PATERSON.* ALTHOUGH William Paterson was not quite so great a genius or so influential a person as his biographer supposes, still the founder of the Bank of England and the projector of the Colonization of Darien was a remarkable man. From an humble origin, and (if the reports are true, that he was was at one time a self-constituted preacher and connected with the Buccaneers) against obstacles of prejudice as well as fortune, he made his way to civic and political eminence by dint of his knowledge and abilities; for at the palmiest lime his property was not great even for the days of William and Mary. However acquired, Paterson possessed con- siderable knowledge both of history and of the principles of trade and currency of a sound kind. It must be remembered, too, that in his time there were no shilling short-cuts to universal knowledge ; nor had such standard works as Gibbon's De- cline and Fall or Robertson's Charles the Fifth and America, with introductions come into existence. In those days, the man who wanted any introductions, of history, beyond what he could obtain from the most vulgar Grub Street compendiums, must resort more or less to original sources, and often draw his own conclusions from what he found. there. Treatises on trade were then tolerably numerous, but often as likely to mislead their reader as to direct him. Political economy as a science or a system was nonexistent. The essays on particular branches of it that were published, though containing, as we shall presently show, many just opin- ions on the true principles of trade, were desultory and of slight authority. A man who discarded the "balance of trade," and. similar though less celebrated heresies, must do so by dint of his own judgment, as he must acquire his economical opinions by wide experience and original reflection. Yet the remarks of Paterson addressed to King William on the history, of Portugal, Spain, and France, in reference to trade and colonization, cannot be improved in our days as regards substance. It is only within these few years that his liberal free-trade notions have been re- duced to practice if they are now. On a more difficult because a less palpable subject than free trade, namely currency, Paterson's ideas were not only in advance of many theorists of his age, but of ours also. The extension of trade' wealth, and war, during the latter half of the seventeenth century, had spontaneously originated the modern system of cre- dit, loans, and paper money, which rash asserters like Mr. Dis- raeli ascribe to the Dutch and William the Third. The pro- gress of events, coupled with the then depreciated state of the coinage, gave rise in England to a good deal of discussion about money, and to various projects. The celebrated Mississippi Law, it is well known, began by turning his attention to the subjects of trade and banking ; and though we quite agree with Mr. Bannis- ter in his moral estimate of that financier, we think he underrates his theoretical ability. It strikes us that Law perceived, what some of his would-be practical followers do not see even to this day, that paper issues of mere promises to pay are nothing. Issues must be based upon substantial value, as land, or the national means. What Law did not see was, that paper, issued in greater amounts than the actual wants of society require, immediately be- gins to fall in value ; and 'that the only means of preventing the depreciation is by convertibility—the realization of the parr for something of universal acceptance, and (within short periods at least) of steady value, as metallic money. Hence the specious notion of fatting the property of a country into circulation, by every man money who could deposit property in some pro- portion to the notes issued, would end at last in their utter depre- ciation, though representing a real value. Of course the scheme would stop in practice by breaking down before it reached the ex- treme stage; but the French assignats are a remarkable instance of the extent to which this system may practically be carried. William Paterson saw this error, and mastered the principles of currency as they are now generally received. Indeed, the first proposition in the following extract from the " Brief Account of the Intended Bank of England," 1694, seems to contain Lord Overstone's great discovery of the self-working system. Paterson, however, dill not pursue his proposition to its logical conclusion. It is clear from other passages ascribed to him that he went no further than convertibility, leaving that to succeed or fail at the discretion of the managers. "lit, That all money or credit, not having an intrinsic value to answer the contents or denominations thereof, is false or counterfeit, and the loss must fall one where or other.

" 2d, That the species of gold and silver being accepted and chosen by the commercial world as the standard or measure of other effects, everything else is only counted valuable as compared with them.

"3d, Wherefore, all credit not founded on the universal species of gold William Paterson, the Merchant Statesman and Founder of the Bank of Bnaland : his Life and Trials. By S. Bannister, M.A., ormerly Attorney-Gene- ral of New South Wales. Published by Nimmo, Edinburgh.

[MAXTHLT STMLEMENT.]

and silver is impeachable, and can never subsist either safely or long—at least till some other species of credit be found out and chosen by the trading part of mankind, over and above, or in lieu thereof."

Sound principles, however, will not suffice to gain immediate influence for their author, even when set forth in a more taking style than Paterson possessed. It is true, his plans for the Bank fell in with the wants of England, and for the colonization of Darien with the aspirations of Scotland. ; but all new public measures on a great scale are sure to encounter opposition. It was not great wealth that gave Paterson the influence he undoubtedly had, for in the height of his success Mr. Bannister only estimates his whole means at ten thousand. pounds. It is probable that his early practice as a preacher might have given him power and fluency of speech to set forth his views. If there is any truth in the description of his manners while at Edinburgh in the flush of the Darien project, painted, by an opponent or rather a lampooner, he had an air of gravity, perhaps of piety. At all events, the testimony to his influence and popular reputation is strong—not unlike what Mr. Hudson's was some dozen years ago.

"At this time, and for some months afterwards, Paterson had more re- spect paid him than his Majesty's High Commissioner ; and happy was he then that had the favour of a quarter of an hour's conversation with this blessed man. When he appeared in public, he appeared with a head so full of business and care as if he had Atlas's burden on his back. If a man had &fancy to be reputed wise, the first step he took to make way was to mimic Paterson's pith; nay, some persons had such a conceit of the miracles he could perform, 'that they began to talk of an engine, to give the island a half-turn round, and send the Orkneys where the isles of Scilly stand.' "

Besides his knowledge as an economist and his activity as a founder of joint-stock banks and of colonization, Paterson was a practical politician. As a stanch Whig, he was a great admirer and supporter of William the Third, though entertaining a mean and bad opinion of many of his Ministers. The King re- ceived him privately, and consulted him, or, strictly speaking, perhaps listened to his suggestions. Paterson advocated the Union, took a practical part in it, and. for his services was re- commended by the Scottish Parliament to the Queen. Nothing, however, followed the vote' and he got no part of the money granted by the first British Parliament as compensation for the Darien losses,—owing, Mr. Bannister thinks, to the ill-will of a Tory Ministry. It was not till the accession of the house of Han- over that Paterson received any recompense : that he had been re- duced to considerable straits in the interval, is known from a memo- rial to Queen Anne, and from "entries of two or three sums of 1001. and 50/. in the Queen's Bounty List in 1712 and 1713 to his name." In 1715 his time of recompense arrived. He was granted a sum of 18,241/. 10s. 10Id. ; which seems to have been a good deal more than he ever possessed. It appears to have been paid in Treasury debentures, some of which bore no interest, or only for a limited period, and the interest of which (if any) was not very punctually paid in those days. In his will, dated July 1718, he bequeaths legacies to the amount of 7400/., and considers there is small pro- spect of any residue. His will was proved on the 22d of the follow- ing January, but it is not known where he died. It is inferred that he was distressed for money, as he quitted his house in Queen Square, Westminster. "The entry of it in the parochial books of that year signifies that the tenant is gone away, the dwell-

ing being ' empty. In a letter to Earl Stanhope, Secretary of State, dated. the 18th December 1718, but a few weeks at the utmost before Paterson's death, he "explains in toucbing terms" his distress. Such were the closing days of the founder of the Bank of England.

Although a good many particulars of the last five-and-twenty years of Paterson's life are known, they chiefly relate to him in a public capaoity as an author or projector. Of his early career no- thing is ascertained with certainty. Tradition states that he was born at the farm of Skipmyre in 'Trailflat, Dumfriesshire ; and Mr. Bannister, on the authority of a statement in his will, which we do not find there, fixes the year of birth as 1655. From an inci- dental remark of Paterson in the Darien papers, that he had known a certain skipper "many years before in Jamaica," there is no doubt that he had, as Ins opponents assert, visited the West Indies. The name appears in the list of London merchants in the later years of Charles the Second, but the first positive trace of him is in another incidental remark of his own, which fixes the commencement of his "experience in commercial business" in 1686. His first definite appearance is in the following year. Mr. Douglas, a Scotch merchant, who wrote a very able paper, full of sense, information, and strong reasoning, against the Darien project, describing it as a rejected speculation of earlier years, thus particularly speaks of the plan and its author. "This design he was carrying on in Holland and Amsterdam, some years ago, particularly in 1687, when I had occasion to reside in that city about six months together, and was oftentimes at the coffeehouse which Mr. Paterson frequented ; and I heard the accounts of the design, which was to erect a commonwealth and free port in the emperor of Darien's country, as he was pleased to call that poor miserable prince ; and whose protection he pretended to be assured of from all who would engage in that design." In 1690 he was in London engaged in founding the Hampstead Waterworks Company, which still exists, and supplies the "IT. W." district. Soon afterwards he was occupied in plans for the formation of the Bank of England ; and henceforth he is traceable by documents, published works, or printed allusions. But so little is known of him till he was past thirty, that the following sketch of his career, by an assailant, is perhaps as complete a coup- d'ceil as can be given. The unfriendly animus is obvious, the facts may be perverted, but they are "founded in fact."

"William Paterson came from Scotland in his younger years with a pack on his back, whereof the print may be seen, if he be alive. [He was very ill on his return from the Darien expedition.] Having travelled this coun- try some years, he seated himself under the wing of a warm widow, near Oxford ; where, finding that preaching was an easier trade than his own, he soon found himself gifted with an Anadab's spirit. Prophets being gene- rally despised at home, he went on the propaganda fide account to the West Indies, and was one of those who settled the island of Providence a second time. But, meeting some hardships and ill luck there,—to wit, a governor being imposed on them by the King of England, which his conscience could not admit of,—the prospects of their constitution were altered, and they could no longer have a free port and sanctuary for buccaneers, pirates, and such vermin who had much need of being reclaimed into the Church. This dis- appointment obliged Predicant Paterson to shake the dust from off his shoes and leave that island under his anathema. He returned to Europe some twelve years ago, with his head full of projects, having all the achievements of Sir Henry Morgan, Batt. Sharp, and the Buccaneers, in his budget. lie endeavoured to make a market of his wares in Holland and Hamburg, but without any success. He went afterwards to Berlin, opened his pack there,

i and had almost caught the Elector of Brandenburg n his noose, but that miscarried too. He likewise imparted the same project to Mr. Secretary Blathwait, but still with the same success.

"Meeting with so many discouragementa in those several Countries, he let his project sleep for some years, and pitched his tent at London, where matters are never wanting to exercise plodding heads. His former wife being at rest as well as his project, he wanted a help that woe meet for him ; and not being very nice, he went no further than the red-faced coffee- woman, a widow in Birchin Lane whom he afterwards carried to the Isth- musof Darien, and at her first funding thrust her about seven feet under ground, to make the possession de facto of New Caledonia more iftithentic. "While he sojourned in London, he found employment for his head ; and, hie a true quack, boggled at nothing that offered itself to his thoughts. He was concerned in the Hampstead Waters, 'the Waterworks, still existing,] and had an original hand in the project of the Bank of England : but, being obliged, so he says himself, to (*limn:death his thoughts to some eminent men who were more able to carry it on, they bubbled him out of his pre- mium and the glory of the project. The man thinking himself ill-used by the managers of the Bank of England, studied how to be up with them ; and, in opposition to it, he applies himself to the project of the Orphan Bank, where he was afterwards some time a director; but their missing of the wished-for aim by reason of the clipped money, and he meeting with some disgrace there too, was resolved at once to be even with the body of the na- tion."

Although the absence of materials prevents any view of Pater- son in his social or personal capacity, the untiring industry and research of Mr. Bannister have exhumed a variety of curious matter relating to the projects in which Paterson was engaged. This is more especially the case with the Darien expedition. In its full extent, the account from its inception to its conclusion

occupies one-fourth of the volume' including Paterson's °erre- vondenee while the scheme was yet in petto, and his narrative of

the whole adventere in the form cif a report to the Company after the return of the-survivors. Mr. Bannister takes his hero's view of the scheme. We differ with him. The project was based on

an utter disregard of the law of nations : if, as Mr. Douglas ar- gued, Spain had a title to any part of America, it was the place Paterson was going to settle on; "so that we may as well expect they will give him up their rich mines as suffer him to keep it." Could the colony have defeated the power of Spain, the soil and climate were not fitted for British settlers; in one way or another they seem to have lost ninety out of a hundred of the ad- venturers. The perfect freedom of trade and rule proposed by Paterson was too much in advance of the age. But even had all these obstructions been subdued, the colony could never have achieved the professed object of trade and a better route to the East Indies, unless, as Douglas pointed out, it could overcome the Spanish fleets in the Gulf of Mexico and the Pacific and the Dutch in the Indian Archipelago ; for it was the interest of both those powers to destroy the project. One thing however, is clear, that the directors and managers were quite unfit for their post. Paterson was altogether put aside for ignorant skippers ; the co- lony was in the greatest distress before the proclamation of the Governor of Jamaica appeared forbidding supplies ; and had that proclamation never been issued, the result would probably have been a little longer occupation, and a greater mortality.

The means by which so many particulars have been brought together in this volume have been a wide and laborious research that few would have undertaken, without the zeal for his hero that animates the biographer.

"The British Museum gave the first manuscripts which suggested the ex- treme value of Paterson's literary labour, long after the date of his supposed retirement from all public interests. The State Paper Office and the sury Papers, preserved at the Rolls, have added greatly to the means of es- tablishing his official history; as the records of the Bank of England and the Parliamentary Journals have afforded many traces of him. The nu- merous Darien Papers in the Advocate's Library in Edinburgh, and a few rare documents in the Bodleian in the Library of the City of London in Guildhall, furnished the best chapters of the work. The libraries of the London Institution, of Sion College, and the invaluable portion of the Man- chester Free Library, from the collection of Mr. Magens, a banker and wri- ter on finance in the last century, supplied copies of Paterson's best treatises, found nowhere else, and rare tracts. The books of the Hampstead Water- werks Company establish his share in that undertaking; and the record of the Commissioners of Sewers in Middlesex, and of the parish of St. Mar- garet, fix his residence in Westminster nearly twenty years after he has been hitherto thought to have retired in obscurity to Scotland."

Mr. Bannister has not confined himself to manuscript records; he has extensively perused the fugitive astd other publications of Paterson's age where a trace of him or his opinions was likely to be found. In one point of view Cs rather encumbers the book and lowers his claims for Paterson. Mr. Bannister ascribes some works to Paterson that are by no meats clearly proved to be his and which indeed contain pohtical and aommermal opinions not only opposed to those he appears to have entertained, but which woula make him out an opponent of free trade and a friend to prohibi- tions, especially, of wine, brandy, spices, Fre., and even of wooL The author, in his zeal for his hero, also ascribes things to Pater- son where the author is known. Sir Dolby Thomas in 1090 published a tract on trade and colonies : on no stronger ground than that Paterson and Thomas were engaged in the same under- takings as the Hampstead Waterworks, the biographer asserts that Paterson "must have contributed largely to its pages," and devotes a chapter to the tract. This 'biographical defect however, gives a curious feature to the work. From the num- ber of publications quoted or alluded to, one sees how the public mind was shirring on subjects connected with trade and fi- nance, and how individual observation and reflection had reached true principles on those subjects. We think it not unlikely that an inquirer into the tracts and volumes of the time might extract a body of scattered opinions on those subjects as sound and exten- sive as there is in any modern book on the origin of wealth, the freedom of trade, and the practical questions of political economy. These opinions cannot be said to have failed of effect, since the Wealth of Nations appeared in less than a century afterwards, having been preceded by Hume's Essays some twenty-five years before. They failed in producing a general impression, because the authors seem only tohave reached.particular truths, without master- ing the principles on which they rested. Hence there was no cer- tainty but what they might in some other direction fall into errors of a similar kind to those they eschewed, and they could not give

i completeness to the particular conclusions or unite them into a system. Above all, they had not the felicity of illustration pos- sessed by Adam Smith, which renders his account of the origin of wealth and the effects of the division of labour one of the most impressive expositions ever written. The main truth, however, of the origin of wealth, had equally with Locke been reached by Dalby Thomas.

The true, original, and everlasting support of wealth, is nothing else but labour ; and if all the laborious people of the kingdom left working, to live upon the natural produce of it, distributed among them in an equal proportion by way of charity, as parish r and beggars are supported, it would not be long before the nation ame necessitous, naked, and starving; and, consequently, land and houses worth nothing.

"A short reflection will make us sensible that a very few years of idle- ness must complete the matter : whence one can no longer doubt, but that labour and industry, rightly applied, are the sole cause of the wealth of a nation ; that money is only the scales, or touchstone, to weigh or value things by ; and that land only will yield no rent, bat as labour, employed for the support of luxuries as well as necessaries, finds due encouragement and increase."

The same writer had arrived at a truth now generally ad- mitted, but then denied by the ancients, as well as by the philoso- phers, divines, and moralists of the time.

"Though some men look upon the ornaments and delights of life as baits to vice and occasions of effeminacy, if they would but impartially examine the truth of matters, they would discern them to be true issues to virtue, valour„ and the elevation of the mind, as well as the just rewards of indus- try. For it is certain, upon a right scrutiny, a man shall find more pro- faneness, dishonesty, drunkenness, and debauchery, practised in nasty rags, bare walls, and ale-houses, than in rich hotels, palaces, or taverns • and as plenty, splendour, and grandeur, can have no other fountain but taverns; industry, and good conduct, so shabbiness, indigence, and contempt, rarely spring from anything but folly, idleness, and vice."

Many curious facts turn up in connexion with public characters and the mode of conducting public business. Among other per- sons that figure in the pages, is law, whom Mr. Bannister treats as a sort of bad rival to Paterson. Law, like all other prophets' had but scant honour in his own country. Scotland had reywten his land-bank scheme. When he was at the head of the French finances, the Edinburgh authorities thought they might as well compliment a countryman who was supposed to carry fortune in his pocket. "The authorities of Edinburgh solemnly resolved to send the freedom of the city to Law in a costly box ; and their Provost, a Campbell, too happy to be allied in blood to the great man, penned an address to him in a stram of compliment that is read with shame at the thought of what honourable men will descend to before a golden image. Law treated the Lord Provost and the Council with cool neglect, that must have taught them a lesson of self-consideration. He did not acknowledge the letter for six months, and then signified that his great employments had prevented an earlier reply. This he wrote to his complimentary Scottish kinsman in French !" We do not know that the following hints are needed by con- coeters of public companies in our time, but they may furnish a warning to shareholders not to strike at the first heat. The par sage is from the private letters of Paterson to his collaborateurs m Edinburgh at the outset of the Darien Company. "As to the quantity of the stock, they think of 360,000/., whereof the half, being 180,0001., will be for Scotland ; so that people may have notice enough to prepare their money. As for reasons, we ought to give none, but that it is a fund for the African and Indian Company. For if we are not able to raise the fund by our reputation, we shall hardly do it byaour reasons.

"The Parliament of Scotland having given the kingdom of Scotland till the 1st of August come twelve months to (tome in for half the stock, this ought to induce us to make what private preparations we can, but not to think of appearing in public till within three or four months of that time. For if we should lay books open in Scotland for six or eight months or a year together, we should become ridiculous at home and abroad. For that we have many instances here in England, where, when the Parliament

gives a long:day for money, that fund has hardly ever success, and where the days are short they seldom ever fail. The Bank of England had but six weeks' time from the opening of the books, and was finished in nine digs. In all subscriptions here it is always limited to a short day ; for if a thing go not on with the first heat, the ranting of a fund seldom or never succeeds, the multitude being commonly led more by example than reason."

With this we may fitly take leave of William Paterson; for although he was a very able and remarkable man, his great speciality lay in the "formation" of joint-stock companies.