The Northern Daily Times.
Liverpool, Merseyside, England, 1856-11-18 00:00:00

THE CURRENCY QUESTION

n. TO THE EDITOR OF THE NORTHERN TIMES.
bankpopular voice now says, that the value of a
bank,—The note rests on the fact that gold is lying idle in the
monk coffers, ready to be given in exchange for it at any
nrn„, knit ,• but we hope to succeed in demonstrating that
.ti`,',4es may be issued, based on a better foundation than
€1.." vaunted bullion stores, because it would be one less
e'etuating and not dependant on any particular article of
e,7ane rce that might chance to run low, which is now the
7: with gold in common with all other materials.
fo:1 gold leaves the country now—though Nie get full value
4.0` ,It in our importations—our currency becomes cramped,
ti,", in proportion as our business increases, so just in the
4-nloe ratio our facilities of commerce internally decrease,
h,(lwe become alarmed—our watch-towers bristle with
74.1i0us warriors—our beacons blaze with signals of dis-
le!,---,and the country is terror-stricken from north to
and from east to west, notwithstanding that, in
eh nt of fact, our wealth may not have undergone any
e for the worse, nationally or commercially. Our
rh"o, ,siir lead, our copper, our cotton, and all other
-nterehao !lac !connected with our manutactures, are of
more ilz‘oortance to us—be assured of that—than
our stores of mild, which would soon be exhausted with-
-4; them- That being the case, these, then, surely deserve,
sleast, to be representi,4 equally with that metal, to which
e Would assign no more value than it intrinsically merits
is 11 article ot commerce. Now, even _its relative value
a e?nsiderably increased by its extensive application as
e,
idef circulating medium.
enh`le don't pretend to say that we should improve our
40;dtion by simply annihilating the gold currency as it
00, Is, or even by the substitution of auy two or three
e„ser, valuable articles, which, doubtless, would prove
ie."„larly fault but with the adontion of some compre-
IvA-LB`ye commercial scheme, based on sound principles,
To..- "lye a reasonable right, as a nation, to look for, and I,
44' one, should decidedly expect to obtain a circulating
ar,e(1;11In so elastic in its expansive constitution that it
n-,rd, at all times,.under all circumstances, adjust itself
bet",,ur wants—so buoyant that it could never be depressed
Lw our requirement ; and yet so solid, so sound, and so
14;7, e, that it would never be raised above its legitimate
r 40,. With such a state of things there would be no
Jae (how could there be ?) of these false-faced oscil-
le,:i°B, by which, one day we seem to be raised above the
sa):' of trade, and the next day to be sunk into a yawning
a far below that level, repining and complaining like
o'nOf snivelling schoolboys, with our unemployed hands
oneyless pockets.
ttett niit be borne in mind that we are not speaking of the
tinlNct tiolue of grade—which -must net:mina, ily very fr‹,t.
ep.ie„LO time—our subject is the circulating medium, the
co"mate standing of which is that of the servant of
eon
mad erce. Where, however, is the unpartial and candid
th that will look around and not acknowledge that, in
4,17 servant, he beholds a
coti„lng. and that with a caw-
eb2table by any rational cause
nUations of trade. Is there a 1,
of 'ate experience in business—w
over arY notice of passing events—t.
again had it evidenced to his s
I.lflueneing, all-powerful servant,
ttp,'• 51,tive commercial thing we know of—producing a fats(
c'rance of prosperity to day, and, to morrow, a
Rnitlre'ssion equally untrue, so that we have almost for-
on,te,a I'o judge of our prosperity by the actual results of
and, when we want to find this out, like a
totio," of n'arrow-minded misers, we look at the bank
eatessr'!, 'which are utterly impotent to tell us what is the
Nv.",t of our weltkli•
403', no intelliCent tradesman, conducting his business
tto-Xnately and -pr adently, would be alarmed to find his
slu;'„°l' hardcailiLlosw, because he would be perfectly
sat,..glat it was convert into some investment far more
tir.r,"Lactory than unprofitOble gold—by which he could not
Itee; a, fraction of the veriest microscopic per eentage,
Nth-„,."° to keep it by him ever so long—and he would
aka be disposed to exult in the favourable aspect of'his
l'ia4 7, and to rejoice that so littler of his available capital
41oni,,liug idle in his strong box. ' Now, tell me, then,
the n' not the business of an individual be an epitome of
I 11,i.aretterce of the nation, or, at any'rate, in this sense?
Of ollaeenl to Imagine that we are to look for the estimate
4441,LWealth, nationally, in our stock of bullion, which, by
4114,"*Y, We ought, on the contrary, to expect to be reduced
tot extend our operations, which, "probably, would be
440 en close investigation, always to have been the
Skh'r it Could be faithfully tested. Thus, we have a
i'ep4l-a°,.fgreat trading—our imports are large, and must
thV,or probably ere the raw materials can be exported
"old Improved, enriched condition—then our stock of
qi4,l 8 diminished, and a panic ensues without even a
W of reason.
‘rert a, %for argument's sake, let us imagine our gold cur-
41i olenensed with, and also that we had parted with
4 •
our gold mobile in exchange for raw materials—
nueruand for our manufactures, which are the strength
fhouptheomMerce, would not on that account cease ; and
Ng," We should have no gold with which to go into
Markets, we should still have our wealth undi-
%ler red in the shape of manufactures, which are the
Nn„. foundations of our social intercourse, and of our
l'eß,7l.,:reial interchanges with other countries ; for, as
%en," raw materials, we ourselves are a producing
rf "rY, bu, to a very limited extent.
Igq„ith some nations, the :balance of trade should be
til. "at as, that woe.id of course have to be equalised by
bill providing ourselves with such materials (gold if you
loow„,as they would accept in exchange ; and as gold
kpti ‘,‘4 be as legitimate, and no doubt as acquirable an
tt4i„e,e of commerce as any other, it would, naturally,
%,4-1,,t its own relative value the same as any other ; an i
bilk,4,Bollid of course have to procure it at its current
Itt '`,et value in the world,' which, if too high to leave
tIN: Profit on the respective transactions, would clearly
Vollstrate that we were doing an unprofitable busi-
-114"--an advantage we can scarcely be said to possess
that, But we should not be without gold then any more
3kbov /113 w, (even if we had such a suppositious start as
eonceived,) for the surplus proflt of trade over our
the -4° of useful produce would necessarily accumulate in
N, rce-
m
Dug metals I presume ; and when our stores of
L_
"41, Baould be thenterially reduced, and the price of the
1,„
4:1" tor us, we should have therein a salutary indica-
Oeroonishing us not to extend our operations ; that,
would only occur when going beyond profitable
- of the
14„Iltet 0118, an
world
would not e
so frequently gluttin
occug r as
-41r1 a Pound, which term would continue to be used,
olb 0 sl bo
,longer mean a certain fixed weight of gold, but an
ilhele,
oru . u72fl uctuating representatve of the relative value
en tt„Wine, cotton, calico, &c., as well as of gold ; and
1.'411r1 " sue, of gold should not be adequate to the
ak44lntit.-40 to speak—a pound would represent a less
,4etl the gold, just as by the converse, when it sho.uld
/na ,e demand, it would represent a greater quantity.
tVtaiiie be said, that gold is now already itself the repre-
N 44, rans:lf the value of other possessions; granted I but,
it,cc'eepti 'Anquestionably it is an unfaithful representative
~att,,tinh2 as it were for the mere moment—for as it is itself of
thg!'''llue practically, equally with corn and cotton
of 11 it th 'act cannot any longer be disguised—we insist
cioeret,tuaet it is inadequate to stand as an impartial arbiter
14,3 not do rue between merchandise and merchandise—it
Ali ° at—it never did, and never can do it, so long
Oep_ othec24linues to hear a Axed nominal value.
lilievt.genta` tivartieles are, in one sense. as much
littelon be es of value as gold; but there is this dis-
T,114,1' stain ween them, the many, without any arbitrary
Nge pl)ed on them, adjust themselves, when any
oth g 4110 enaselves occurs, to all around ; but gold, not
Ilveetcl, 80 to adjust' itself, disturbs what might
orni other ?e steady, peaceful condition of the markets
aehi nail, Enings, and while it has fluctuated in reality,
tn- hi' there is no change. Whereas, the 5,000 articles
co %0 t realit
talt YlAid r may have undergone no change, are alld
tVon. en a n 0 this commercial idiotic despotism, an
I,!OgE° to thrlinal fluctuation in value which does not
-ID, and this unnatural, convulsing state of
• and
liottletyllelr
tcheeans,ewuindtitlhwee have free trade in gold.
fluctuation of prices be

cruel usurper, ruling, not

'eFv out of the

had any

ho has taken the most

lat has not, over and

what they seem to be, and then may the oscillations of
trade reasonably be attributed to natural causes, which
probably now at times scarcely form an element therein.
But even were gold not of fluctuating value (as it is
relatively), and although it should be a faithful represen
tative of value, still, nevertheless, it would be inadequate
to] :meet the requirements of the commerce of the
nineteenth century ; because, as we have repeatedly expe-
rienced, to our great discomfiture, of its' liability
to be withdrawn from our markets, leaving us, like
so many miserable, unclothed wretches, without a
substitute for our temporary covering, whereby we suffer
all the agonies of destitution proportionate to the extent
of the evil ; and the temporary transit of a few hundred
weights of gold is simultaneously ace )mpinied with these
lamentable convulsive panics to which our commerce is
now periodically the victim in the zenith, so to speak, of
prosperity, and all for want of this substitute, which is one
of the two great things we ask for, viz., Free Trade in Gold,
and an ample medium of Exchange.
Divest this subject of the accumulation of extraneous
matter with which it is commingled, and then, by fixing
our attention on these two points in their native simplicity,
it will require nothing beyond a little good common sense to
understand it, though now it is so wofully unjustified that
the majority of those who are most deeply interested in it,
although they know it not, turn aside from it, either as
beyond their capacity, or as a thing with which banks and
bill brokers alone have any need to middle with—
which is quite a misapprehension, for if it be left to them
wide-awake men—that they are with their intelligence
and keenness—l fear we should not gain a fraction of our
two points, from this time till Doomsday; therefore it is
that I hereby counsel the diffident and unassum ng ones,
and all honest-hearted common-sense persons, to give this

matter a fair hearing and a little of theirattention, and then
we shall soon muster a strong and sufficient band to help
onrselves, and ultimPlely, by diligent perseverance, obtain
the desired boon.—Yours, &c , CORNELIUS.
Liverpool, Nov. 13, 1856.

TO 7HE EDITOR OF THE NORTHERN TIMES

Sir,—The imperative demands of business do not
permit me to occupy much of your valuable space on the
present occasion. I will, therefore, confine myself to a
few observations on the last published letters of "J. W."
and his supporters.
•It gives me pleasure to say that I concur, to a great
extent, in the reasoning by which " J. W." seeks to prove
the:advantages derivable from a paper currency. The
benefits and absolute necessity of such a medium of ex-
change in our commercial community, is very sensitively
felt, even by the few who occasionally declaim against it.
But THE GREAT QUESTION to be considered'and ultimately
decided is, on what principles ought such a currency to
be issued, and upon what basis should its declared value
be made to rest ? Upon these questions, I believe a
great-difference of opinion will be found between myself
and "J. W." and his friends. I believe the period is not
very distant when the Legislature will feel compelled to
consider and decide this very vital question; and it re-
quires no prophet to foretell a great increase of national
prosperity, or a speedy declension, and, perhaps, irre-
trievable check to our credit, power, and influence, pro•
portioned to the soundness of the principles and basis
upon which the future monetary system of this country
shall be built. It is probable that Govenment may defer,
for a time, the decision of the question, by resorting to
temporary expedients. But the adoption of a definite
measure cannot be very long postponed, without great
damage to the public weal, It is, therefore, highly im-
portant that the attentive consideration of the public
should be directed to the subject, involving, as it does,
the prosperity of themselves and their descendants
Your readers will have learned that I advocate an ex-
tended issue of notes, for which the issuers shall give to the
nation an absolute, sufficient, and tangible security. that,
whenever they may be presented for payment at the Bank of
England, they shall receive the amount in gold or silver,
deducting only a small commission to repay the trouble and
expense which the Bank will incur in being thus prepared
to meet all demands, and also to protect it from any
merely speculative drain for the precious metals.
This very obvious and simple expedient of charging a
small commission on gold, will mark the true difference
that must ever exist between the absolute possession of
money, and the very best security that can possibly be
given ter it. It will also be an infallible - security against
those periodical cirainings of the Bank coffers—which have
frequently produced so much mischief—for it will no
longer be profitable to take our gold from the Bank to
sell to other countries. Those who take it must do so at
its full value—consequently, they will not take it at all,
except for those legitimate commercial purposes where it
is indispensable.
This is a short outline of the currency I advocate ; nor
will there exist any real difficulty in carrying it into opera-
tion. -On the other band, " J. W." and his friends advocate
a scheme which, so far as it is explained, proposes an issue
of paper under the sanction of the Legislature, which
shalt bear a nominal and compulsory exchangeable yalne,
but divested of any real security, and containing
no promise to pay. Paper—echose only title to be called
money is that which an act of parliament, a strong police,
and a standing army can give it—paper which may some-
times require the sort of credit needed by the paper
roubles of Russia, which were recommended: to the
patriotic acceptance of the good people of Odessa by a
general at the head of a large army, who stood with loaded
muskets and fixed bayonets, ready to enforce his argu- I
ments.

In my next I Will notice Pitt's Suspension Bill, and
Peel's Fourteen Million Panacea, and some other matters,

—I am, sir, yours respectfully,

A. Cintaxmov- Rmronmait

LETTER NO. II

TO THE EDITOR OF THE NORTHERN TIMES]

Sir,—ln my preparatory letter. published in your paper of
the 24th ult., I promised to review the important question of
Currency, and to endeavour to give a practical definitioo of
what I consider necessary to meet the wants and wi,shes of
society in substitution of the universally condemned Banking
Act of 1844.

then your able correspondent " J. W." has, to some
nticipared me, in publishing a portion of my schenie,
of the year be the basis of our legal
instead of the absurd and

per circul,tion or currency

.Hobert Peel's Act. This .basis
I have maintained since 1547, when I bad the honour of com-
municating my views on currency to the la`e Lord George
Bentinck, who, at the time, flattered me by the warm expres-
sion of his approval. But, in the ;application of this principle,
in the ►nodus operandi by which our Bankers are to bo in—
vested with the privilege of circulating this amount of paper,
and in securing the practical convertibility of the paper so
issued into specie, I differ essentially from " and
others who have published their views on the subject.
Why the taxes of the year should be made the basis of our
paper currency, in preference to any other limit, may be argued
from the following circumstances : —This country having
contracted a debt of nearly eight hundred millions sterling, and
having become concurrently the greatest mercantile country in
the world, it becomes us to discuss whether a debt so contracted,
and a position so acquired, may not be made so to harmonise
that the existence of the one may not become a bar to the
further development of the other, but rather that, in its
character of realised capital, it may be made subsidiary to our
further advance in the van of nations with whom we are now
called upon to enter into keen and arduous competition.
The annual revenue, or yearly taxation, must be looked
upon as that portion of .the annual income of the people of this
country—derived chiefly from their industrial resources—which
the state collects, and appropriates, for the purpose of paying
the interest on our National Debt, and of maintaining an
Independent and controling position in the family of nations,
To that extent it is a direct annual pressure and drain upon the
community. Yet, from its annual amount being fixed in
advance, and a large portion of it so collected, its representative
value for the payment of customs and excised duties, when
transfered to individuals, becomes evidently convertible ; and
from these circumstances it seems fitted to our hand, for a
basis of paper currency, whereby it may become so modified in
character as to be no longer a direct pressure, but a floating
liability, performing such supremely important duties in
relation to our commercial economy, as to have its disagreeable
existence in a measure lost sight of.
To point out the means of practically securing this desidera-
tum, is the object of my communication. I, therefore, with
these premises• proceed to my task.
We have a National Debt of eight hundred millions sterling,
chiefly held by our own citizens, and in most part by families
of distinction, residing in and about London.
We have a Bank of England, eleven millions of whose
paper currency are represented by a claim on the Government,
held either in consuls or other form of public, security. We have
bus a precedent for what lam going to propose. We have
harter of this Bank of England, witbin one year of the
twenty•one years' lease, and the necessary
public notice given, in August last, premonitory of a modifica-
tion of its charter. We arc thus free to enter upon the
adoption of anew system without doing injustice to existing
interests.

expiration of its

Then, what more easy than to apply those free-trade prin-
ciples to Banking—which have been so eminently successful
in their application to all other interests within the state—and,
by the creation of a competition amongst capitalists, to become
bankers, abolish, once and for ever, the monopoly and
individualism of the Bank of England—which bas interests
too distinct from those of commerce, to be anything but a bar

to its successful development.
Further, and more important still, to blot out from our
statute book those absurd and obnoxious measures, the acts of
1819 and 1844, which have no defenders, and cannot have
any upholders of their principles of currency.
The Government have first to declare their intention not
to renew the Bank of England charter. Secondly, to notify
the limit of a paper currency equal to our annual taxation, to
be created by the deposit of Government securities to a like
amount with the Accountant-General. To invite tenders from
bankers and intended bankers-,-of course including the Rank of
England, and. all the other banks of issue in the United
Kingdom—to compete in the distribution of amounts within said
limit of taxation, to be issued in bank or Government paper,
expressly to the successful banking competitor. The object of
competition to be declared in the notice, viz., terms on which
the public business of the state, the receipts of revenue, and
dWribution of the ways and means may bo most economically
performed, so as to render unnecessary the issue of Exchequer
Bills and treasury notes, by which an annual saving of interest
on interest, to the extent of over half a million sterling (at
present pocketed by the Bank of England) may be effected,
and by which other important changes and improvemenia in
the character
and system of Banking may be secured to the
people.

The form of application by each Banking candidate to contain
the intended capital or note issue required, the uat9e or title 9f

the firm or Banking, Company, number of shareholders, and

other necessary details,

The Government to fix a day for declaring the Banking firms
selected, as in the alocation for loans or other contracts.
I need hardly remark upon the certainty of being able to
obtain a sufficiency of Banking capital, vested in Government
securities, out of eight hundred millions, particularly when it
becomes known that the interest on the stock deposited is still
payable to the depositors, it being merely lodged as security,
and to represent the notes is be received for circulation.
The further development of my plan, the form of note, its
character, and scope of circulation as a legal tender, how it can
be made practically convertible into specie, and other important
details, I reserve for a future letter.—l am, sir, yours respect-
fully, I. 11.

SLAVERY.-WHAT IS SLAVERY?