ABSTRACT
Until the middle of the nineteenth century, governments gave little attention to stability of foreign exchange rates. As long as the coinage was not debased and bank notes were convertible in gold or silver coin, the monetary system was regarded as in good order. When the convertibility of Bank of England notes was suspended during the war with France, the House of Commons appointed a select committee in 1810 'to enquire into the Cause of the High Price of Gold Bullion, and to take into consideration the State of the Circulating Medium, and of the Exchanges between Great Britain and Foreign Parts'. The exchange rate was given so much attention in the Bullion Report only because it was regarded as one of the tests of the depreciation of a paper currency.
