Instead of imitating this great and decisive example of wise and statesmanlike policy, what did Sir Robert Peel and the Free-traders do, on the commencement of a similar period of vastly augmented national industry? Why, they did just the reverse. Not only did they make no provision for enlarging the currency of the nation at the time, when they themselves had occasioned or sanctioned so immense an increase to its undertakings, but they took the most effectual measures possible to _contract_ the circulation, both in gold and paper, directly in proportion to the necessity for its expansion. They first passed a law which limited the circulation of the Bank of England, irrespective of the notes issued on the basis of gold in their coffers, to £14,000,000; and that of the whole banks in Great Britain and Ireland to about £32,000,000; and then they introduced a system of free trade which permitted the unlimited entrance of foreign agricultural produce at a nominal duty, and thereby sent nearly half the gold headlong out of the country. Under the influence of this monstrous system, the gold in the vaults of the Bank of England was progressively diminished, until, in the end of October 1847, it was reduced to £564,000 sterling in the banking department; at the very time that, by the same judicious law, above £8,000,000 of sovereigns were lying useless, and locked up in the issue department of the same establishment. The governor of the bank very candidly admitted, in his examination before the House of Lords, that the bank, under the existing system, might have broke while there were still £8,000,000 of sovereigns lost to them and the nation in the cellars of the issue department.[22] Of course the whole banks of the country were compelled instantly to contract their credits, and force payment of their debts, and thence the universal distress and ruin which ensued. And all this took place at the very time that the bank had eight millions of sovereigns chained up by act of parliament in its cellars, at the issue end of the building; and when the government, which so chained it up, had landed the nation, by act of parliament, in engagements requiring an expenditure on railway shares of £363,000,000 in the next four years. You may search the annals of the world in vain for a similar instance of infatuation in the rulers of a nation, and self-immolation in a people. [22] In reference to this state of things, the following important evidence was given by the governor and deputy-governor of the Bank of England:-- "You had only £1,600,000 in the banking department for the payment of your liabilities?--Yes. If anybody had called upon you for anything beyond that million and a half, you must have stopped payment?--Yes, we must.