The Express.
London, England, 1847-11-01 00:00:00

THE CURRENCY BILL

Sir,—My last letter contained au inquiry into the
nature of the gains accruing to the Bank by coalescing (how-
ever unwillingly) with Sir Robert Peel against the general
interests of trade. I trust it was there made evident that the
Bank, by reinvesting its paid-off capital, at, in Consols, 75,
would have profited more than it has done by the charter.
If anybody thinks the assumption of a fall from 9.5 to 7,i too
great a depreciation, let him consider that the price of Con-
sols last week touched 78, and was only prevented from going
further by the suspension of the Charter Act. We, therefore,
have taken but two years and a half to effect that, I fear
for a permanency, which would probably have been but the
temporary result of a rupture between government and the
Bank of England in 1844. I will now invite you to follow
me in an inquiry as to the gain which promises to accrue
lire= gold payments, or the second radical error that lies at
the bottom of Sir Robert Peel's financial policy.
It is no doubt a consoling reflection for those who have
not taken the trouble to master the question of climb,' and
ita bearings upon trade, but who happen to hold stock or
credit securities of any kind, that the sum total of
the principal debt which is their property is really
worth as much as it expresses in gold. As far as the national
debt is concerned, this will, no doubt, prove to be the case,
but it will only prove so if its redemption be proceeded with
In the same manner that would be necessary in any other
ease of a personal debt, or claim which was not secured by
hypothecated property. The national creditor has no
security resembling a mortgage ; he cannot even claim
the remnant of crown lands which forms an excuse for
keeping up the office of Woods and Forests. He has no pledge.
The gold in the Bank cellars is the property of the proprie-
tors, subject to the elaims-of those who hold notes or who have
dada deposits. Bat he bas, what with good government,
mud pseasams, ad Christian feeling, is fax better security—
he
bells a lien apes the earnlxothe nation.
This bond unites a large of the population of this
vampire, and not a kw beyond ice limits, in a stringent league
to promote the true interests of this' empire, which, happily,
are those of humanity at large. This debt tan only be re-
paid by savings from earniogs. Consequently, what-
ever promotes earnings, morality, Christian charity,
intelligence, peace, and industry, when established
and secured amongst the inhabitants of the British
empire, are each and all the firmest securities fee the
national creditor. Wars and party biekerings (always ex-
cepting the just defence of endangered rights), ignorance, bad
general or municipal government, unchristian tendencies,
immorality, are what ought to alarm the national creditor
when they are found to prevail. These are Inimical to in. I
dustrial prosperity. They render ft difficult In their partial
operation to collect the interest of the national debt. They
would, if suffered to grow in power, effectually prevent its
principal from acquiring substantial value.
Let us nose look at the financial working of this great
problem. Were the whole of the national debt at once paid
off in gold, the value of this mass of metal would depend
upon the use it would be put to. The theories of those who
pretend that a thing is worth its cost price would be then
put to • severe test. Who would give up an estate, or a
ship, or a factory, or anything bringing in a regular revenue,
for a mass of gold that he could only make plates, or dishes,
or buttons of? The earnings of the idustrione would cer-
tainly be freed from the annual charge for interest in the
budget, were such an event practicable. Bat, although
this charge is more than 16e. per head, the relief would not
compensate for the sudden unhinging of social relations,
which the for in purchasing such a mass of unproductive
mnsttal as eight hundred millions to gold would cause. But
am no such man exists, and the thing is physically intpncti-
stable, I only glance at the result it would lead to, and pro-
geed to the operation of a gradual discharge, such as is, or
might be, carried out in practice. Even the Interest paid
quarterly from the earnings of the nation, and of which but a
small portion takes the form of gold, is found greatly to affect
the value of money. Discounts become easier at thaw
=cal outpourings of interest, orders an given to annu-
m private credit is sustained by the repayment of
haw, or the clearing off small debts. Now there is some-
thing in all this which goes beyond the effect of the issue of
some five millions of pounds. In fact the regular payment
of the dividends is a proof that the earnings of the nation
have proved equal to the charge they are encumbered with.
The nation is consequently richer with every quarter-day
than it was in the preceding quarter. This influx of money
lames therefore to a full market. It is lees wanted with
every quarter, and, there being a continually growing diffi-
culty of employing it, stocks and funds of all descriptions rise
in price ; that is to say, holders of money submit periodically
to a continued reduction of interest, in order to get it em-
ployed. With stationary intelligence, paralysed exertion,
or insecurity of private adventure (but not sufficient to de-
stroy the actual earnings), we should see a slow but gradual
rise in the price of stocks, unless better security was proffered
in foreign countries.
Every great political reform in this country has been pro-
ductive of renewed exertion. The peace of 1815, catholic
emancipation, the Reform Bill, and the free-trade bill of
184.5, by holding out securities of the nature I have above
enumerated, proved able to counteract the bad effects
of Peel's currency bills, Lord Ripon's corn protection, and
the infringements of personal liberty enacted by the various
tory rulers in England, Ireland, and the colonies, to the ex-
tent of causing the national earnings to increase. Those
liberal and reforming measures thus encouraged efforts to
seek new modes of turning the accumulations to good ac.
count. A competent authority has estimated the annual
sayings of the country, above all disbursements, at more than
fifty millions per annum. This sum, in its accumulated
form, first lowers the interest of floating capital by forcing up
the price oft/to*. Thus, we have seen Consols In several
periods rise from a low to a very high figure. From 72, in
1821, they roes to 97, in 1824 ; from 84, In 1826, to 96, in
1830 and 1831; from 136, in 1831, to 95 in 1836. In 1844, we
have seen they ware once more at 95, and have subsequently
fallen near 20 per cent.
svery unusual rue is an index of accumulated capital. A
Ina often per cent. in all stocks corresponds to an unem-
pbrp,..l capital of nearly seventy millions. But, as other in-
,* take their share it le impassible to say what total
hattaitis sinprofitably invested when the funds absorb
M inset-. Lt cannot well be km than double or treble
that amount, and must be sought in the Bank
cellars, in mortemies, in discounts. On amount c( the
yecthtyy which the oveetnient in discounts affords to realise
at will, than ammintaNaLAu_______,__ci maJaP Dammam first oa the
lade of the wintry, ."7 ••••••PRIF INlPlladea. It is,
ohnokro, for mat of raaMPAMP /Ng biallmanta that

this feeling is set at wort. In fact, it is nothing but the de-
sire to try in various directions where remunerating
investments are to be found. In my next, I propose ex-
amining to what extent this desire has been carried in the
various bubble mania that have ruled during the periodical
returns of the tendency in the trading worId.—SCRVTATOR.