The Express.
London, England, 1847-10-25 00:00:00

THE CURRENCY.

Sir,—Permit me to lay before you a plan which
would effect an elasticity in the currency without .iitordsriair
with payments in coin or altering the standard of • .lue,
which would mitigate the pressure and be self i..ljusting.
Bank paper being fixed at fcurtren millions, and as exa-
ing being required to be represented by gold and silver la
the coffers of Bank ; and if that amount be taken at eight
millions, it foams that the circulating medium is restricted
to twenty-two millions, at present.
The plan is to allow the Bank to issue notes op n Exche-
quer Bills payable in gold or in Excheyner Bills, at he option
of the holder of bank-notes, and that such issue be limited to
2 millions. The Bank not to be called upon to pay is
Exchequer Bills more than the amount upon which it has
issued, and in sums not less than 500 f. The Bank u, publish
the amount of the Exchequer Bills in its coffers upon which it
has issued, in the same manner as the amounts of 'he gold
and silver. The Beak would then have a cathi'iility to
supply a circulating medium at the present time 124 mil-
lions, T. :—Reprem•nted—By gold, 8 millions; bs govern-
ment seitiritiea to Bank, 14 millions; by Exchequ• r Bills, 2
millions.

Exchequer Bills being now at a discount, the Beek would
I issue its notes, by purchasing them; and so the demand for
money is to urgent, it is very probable that the cileulation
would soon be extended to twenty four millions. The ad-
vantage of basing this issue upon Exchequer Bill- payable
in gold or Exchequer Bills is, its self-adjusting principle.
Supposing the Bank to have purchased two millions—aa
money becomes cheaper, Exchequer Bills will hew ite dearer;
and as soon as they are at • premium, Bank nous will b•
taken to the Bank for Exchequer Bills, precisely i the game
way as when gold is dearer abroad than at home, Bank notes
are taken into the Bank for gold. Thus all excess of paper
beyond the fourteen millions caused by the issue spon Ex-
chequer Bills will be corrected.
An extension of paper issues upon Exchequer Bills payable
as stated would he very different in its operation tosimply per-
mitting the Bank to extend its issues from 14 to 16 millions.
In the latter case, the larger amount may be kept up in yier-
petuity, but in the former it could not. The issue unon Ex-
chequer Bills would act as a value to ease excessive pressure.
In a debate, towards the close of the last session of parlia-
ment, Sir It. Peel was paled very hard respecting the
mystical limit of 14 millions of paper. His reply was to this
effect—via., th..t that precise amount was not the principle
upon which the Bank Charter was framed, and that any other
amount was suit open for discussion.
It has been asked what is a pound sterling ? TI e answer
given is, a piece of gold of a certain weight and oneness:
and undoubtedly it is so; but anything which will always
procure such a pound is equal to it. Now, a 100/. Exche-
quer Bill is almost always of the same value as 100 f. ster-
ling, and of roar more than less—hence they are generally,
at a premium. This day it was worth 991. in gold. Bills of
1001. command 981. 10s. in gold, or 30s. per cent. oiscsust;
but, on the average, Exchequer Bills are equal in value to
gold, and next to gold or silver the best basis for an issue -
and such an issue upon Exchequer-Bilis, whilst the value of
money is 61 per cent., could not drive gold out of the
country or prevent its coming in. Gold, however, ha. come
into the Bank before on many occasions on record in the
Ern of an issue of paper, and when the proportion of paper
bore a much greater proportion to ioin than now then the
proportion was one-third gold, two-thirds paper ; and if
that proportion were a safe one (and it has never been de-
monstrated to the contrary), eight millions of gold ought to
support twenty-four millions of bank-notes in perpetuity ;
but the scheme proposed only requires an extended issue 10
long-as the present enormous value of money continues, sad
a government bill, payable in gold at a certain time, is at a
discount, although bearing interest at the rate of 41 per cent.
Something must be done to arrest the downward progress.
Exchequer Bills will become due, and must be renewed or
paid off or funded. Good railway stock can now be purchased
to pay 7 per cent., or rather more. It would be of no
use to raise the interest on Exchequer Bills now. If it
be raised, all other securities will fall still lower, and
there will be less means upon which to raise money—
discount will still advance, and Exchequer Bills will
still go to a discount ; the funds, railway stock,
in short, all property will fall still further, and unless gold
should How into the country at a more rapid rate than was
ever known, or some relaxing in the currency be allowed,
down will go prices until bankruptcy becomes almost uni-
versal, then will the victory of the mystical limit be woo,
wreck and ruin will cover the land, and the misery of the
people will only be exceeded by the misery of the poor Irish
last year.—lt. P. C. Bristol.

Sir,—The deficiency of gold in the Bank of Eng-
land, it is agreed, is the cause of the Bank's inability to
assist the country. Remedy Let the Bank be authorised
by an order in council to call in all the present gold coinage,
without charge fur deficiency in weight, and replace the
present circulation by an issue of one pound note* and a gold
coinage of fire sovereign pieces. As the gold pieces would
be inconvenient for the general purpose* of trade, the
one pound notes would be principally used, and it would not
be too much to sapect the Bank to increase its stock of gold
ten millions by the change in the circulating medium.—
COMMERCE.

Sir,—l meet leave it to more experienced f un-
cle,. to determine whether the present panic is caused
either by over-speculation, railway calls, • auflicant,
or an insufficient currency; but I believe all will admit
that there is a greater pressure on the money market
than has been felt this century. I think also, from surmises
in some of the public prints. that the legislature would try
some plan to stop it, if one could be devised that would not
interfere with the Bank Charter Act of 1841. Such a ole
has occurred to me, and I shall be happy if you think it suffi-
ciently feasible to warrant its insertion in your paper. I propose
that government should issue 2.500,0001. in treasury bias for
sums from one pound and upwards, payable at the Bank of
England on Feb. 1, 1848. These bills should nut bear in-
terest, but should be legal tender in all mercantile trans-
actions, as well as in payment of taxes. To get them into
circulation government should make all their present pay-
ments with them, or lend them to bankers, or first-clus
houses en deposit of stock, or bills of exchange of ample
value falling due before Feb. 1, at the rate of tire per cent.
per annum. The issue of these bills would furnish govern-
ment with funds to th: eeleent 2•!e.,A?"1. ""1
i.
'.'.*:-11A therefore render it nrineceestry to call on the Bank
for se a like amount. The Bank should be
allowed to treat this as a permanent deposit till Feb. 1,
paying interest for it as any other joint-stock bank would, at
the rate of three per cent. per annum ; or, if the direct as ob-
jected to this course, that sam might be drawls out and placed
at the disposal of other banks who would not object to it, or
it might be used in the same way as the bills by being Net
on deposit. Thus, by the lama of 2,500,0001. of these bills,
which would bring an increase of the revenue for the
quarter of about 190,0001., the available floating circulation
would be increased 0,000,000!. Nor is this all. A circuit.
floe of this nature, secured as it would be by an actual go-
vernment balance in the Bank of England, would be re-
ceived with much more confidence than an increased issue of
bank-notes over and above the actual Dents of that institu-
tion. Another advantage of this plan is its temporary
nature. During the three months it would be tried, the
government and the country would be able to form a more
correct opinion as to the nature of the disease; and if the
treatment I ptopose has the dcsa:d effect, parliament will
have plenty of time to digest a permanent remedy.—E.
Catarox.