Thus Loyd’s principle, which he embodied in his statute, was the rigid limitation of the currency to the weight of gold available for money. “When ... notes are permitted to be issued, the number in circulation should always be exactly equal to the coin which would be in circulation if they did not exist.”[360] In 1845 the Bank Act was extended to Scotland, except that there small notes were still tolerated; the expansion of provincial paper was prohibited, and England reverted to the economic condition of Byzantium,--a condition of contraction in which the debtor class lies prostrate, for, the legal tender being absolutely limited, when creditors choose to withdraw their loans, payment becomes impossible. Perhaps no financier has ever lived abler than Samuel Loyd. Certainly he understood as few men, even of later generations, have understood, the mighty engine of the single standard. He comprehended that, with expanding trade, an inelastic currency must rise in value; he saw that, with sufficient resources at command, his class might be able to establish such a rise, almost at pleasure; certainly that they could manipulate it when it came, by taking advantage of foreign exchanges. He perceived moreover that, once established, a contraction of the currency might be forced to an extreme, and that when money rose beyond price, as in 1825, debtors would have to surrender their property on such terms as creditors might dictate. Furthermore, he reasoned that under pressure prices must fall to a point lower than in other nations, that then money would flow from abroad, and relief would ultimately be given, even if the government did not interfere; that this influx of gold would increase the quantity of money, by so doing would again raise prices, and that, when prices rose, pledges forfeited in the panic might be resold at an advance. He explained the principle of this rise and fall of values, with his usual lucidity, to a committee of the House of Lords, which investigated the panic of 1847:-- “Monetary distress tends to produce fall of prices; that fall of prices encourages exports and diminishes imports; consequently it tends to promote an influx of bullion. I can quote a fact of rather a striking character, which tends to show that a contracting operation upon the circulation tends to cheapen the cost of our manufactured productions, and therefore to increase our exports.” He then stated that during the panic he had received a letter “from a person of great importance in Lancashire,” begging him to use his influence with the ministry “to be firm in maintaining the act,--to be firm in resisting these applications for relaxation,” because in Lancashire the manufacturers were struggling to “resist the improperly high price of the raw material of cotton.” “That letter reached me the very morning that the letter of the government was issued [suspending the act], and almost immediately the raw cotton rose in price.”