The Northern Daily Times.
Liverpool, Merseyside, England, 1856-10-30 00:00:00

PROFIT AND LOSS,

4211.r.41Lia' EDITOR OF THE NORTHERN TIMES.
/ Vitirt -r-40Y0cates of the existing system of currency may
Pfkt OY Olea . •
•
folksA,t4titu,, se. . They may bring forward in its sup-
th . teLlie ‘.O, of, specious arguments, that would fill a CREDITOR. . ------
el'eatibbi
~(.4 of
olden time. But there is one thing By excess of assets over liabilities
PutlePited man`. They cannot convince any intelligent, un-
tie facie; ti 7.., Who will take the trouble to grapple with
that has "p a good tree can bring forth such evil fruit
'mit B,Alone
/0i /Caders., • Let me appeal to the common senee of By balance brought down, being the amonnt appli-
d. Of kmt ,Here is an Act of Parliament that invests a cable to dividends,
ed,escried in the present
ezae43,l.Y, iew e't, il'Pany with the terrible power of striking. returns as " The Rest ..... ~..,
--
rat ilog fr, "0 heart of the commercial community, by
--
pros of,to• te7 the most legitirow.e traders such usurious The Bank being authorised to redeem its own notes with the
...IPetit , e3t a 8 must sap the foundations of our great
'llia '" • The • legal tender notes of the Government,.. (or, as they might be
It. t.ta iter„ capital of this company is only fourteen denominated taxation notes,) its specie payments would be
ded until £14,475,000 of its promissory notes
,'an half of the capital of the London and virtually suspen
qap ,_,. "'ern Railwa 4%tio' reather . y Company ;—a feather, and lighter were thus paid off, and cancelled.
Ever afterwards, the gold coin and bullion in the issue depart-
I, aallyeaiti:. When weighed against the mountain of our
ment would exactly correspond in amount with the promissory
ti !IY4dieed „,,., Yet, this otherwise insignificant company te ' Nl,' .',Eil this terrible power;—and, worse than that,
ret' Pe"e'l t •
When the notes thus issued fell below the requirements of
NI 44- it i 0 exercise it or shut up its doors. .-•
tr,,d,
~,,,,,
,„,, 1 ,h,„„ 0.---, • -. • -
kel. 311 an • • • ' pi• & .1-- •
tar, , ,il, Whim. .. iniquitou Act of Iv- 1,,,-....•

£17,731,019

£17,731,019

£3,178,019

,ra,aa LUG oaualng uepartment, tit('
I Bank would apply to the Government from time to time foi

1 len it
.e
6_4llltiici'•• I -an adopt with safety, when an extiaordi-
pryt
,!_ler ellehis.,r_edurfog its stock of gold. loans of national or taxa
Government and cancelled,
Pr °n th 6 circumstances, it is compelled by law either to
NO, or to "°1 regardless of the torture inflicted by the Bank. For, under the operat
l'il'orfyn Proclaim to tho wnria th.. -4 ;. :,.....___.:Lt- ~, currency retainpa hv tho n.,

m notes, to be restored to the
.s the public returned them to the
in of this system7;the amount of the

. -
Iti , tot ri-,,ments.
the .•e result of •
Vll,l set of o
e
'.mil and °44. When we adopted it "we sowed to the
...„,1 -...‘, now
4g this 1 ,as a natural consequence, (even while,,, I am
is,i,_ . s etter )
(10,:m.'tovero
_:. we "are reaping the whirlwind. .
ll,' afttit,t-,oPeolents may be resorted to in the present crisis
velessfops to' enable the good ship of our British coinn%recie.
i• lt,Parn contend against the wind and waves of an i
lot t e, the
tii44 the corretirae approaches when the all important ques-
t, li'view to its eY must be taken up by the Government,
patio!, h ~,,
f "rmanent settlement on the safe and solid
th, -Juorrri ' national wealth.
ipi:itlestion :.911 Post has recently informed its readers that
te,l.teld ea, "v "assuming dimensions of serious niagni-
tin tosaio . not fop
•l, rto engage the attention of Parliament
t:titd syitona: ein.it is to hopedbeil that the defects of the ex-
147etlevii.,;', be earefu. n aired into, and a remedial
atilt.
''''' and passed inytoe aq law with as little delay, as
h. a"triiih.
?ro.,4.tialati int, let currency reformers speak. Irpgard it as
rts..,"Pitlio:l3, from a high quarter, that a certain pressurein
r"1, ill ,s`b i 8 now required by the Minister, to assist him
P',411,61,1_ Act that has introduced doubt and alarm into every
kt,'lde '4B itless
i'Lilt•-.l"' ;i8 ageneral.
'i .--l'ib 9ore reiable sonrces of information thar
rk7l64;ioletr°Politan citemporaries. Hence it is,
tlijctedin'och importance to the above announcement.
40-istlirie !,bln its columns. Much, at all events, is gained by
14'014‘8.1.?o, that the defects of the existing system can be
taster,werlooked, and the adoption of a remedial measure
s tie1a,,„,..,
44°0 therm."' ,
till,' to the -
core, desirous, in the present letter, to confine
N'14,,,. nsideration of his one question—How the act
'tliroto ig°6 de atnended sot as to meet, in some degree, the
bi to
of ,
kti, ore.w4 our daily increasing commerce?
104 8. a singular statement in Herepath's Journal, of
ti °" ti' the effect, that any sound improvement need not
ale,. 'foss
4 ''. e Yet, because money cannot be cheap for some
44.' °rile 0 '
a ' a account of the extraordinary expansion of
4.. ho '
4t,.01'6„ 8431 the writer, " we have, by the. greater exile_
Inteleo„"r intercourse, shortened the periods of returns,
1,, 11S41.tbe increase of trade swallows up capital much
' this vi.',,. can Make it."
tit°ttilgi-1,711°, and there can be no mistake about its truth,
461,4. iS ti, eaPftol the writer means money), it is evidentit
4 tl74lthe" 'dark shade of an inexpansivo currency, that
ilts: Petah "'dark
sunshine which we ought to be now enjoying
thri7ket place°l that extraordinary expansion of our trade that
Odelt istii,_ Within the' last few years. How sad the thought,
ii Ile to ii extraordinary expansion of our trade, which for-
oft, to e° „P° for a speedy alleviation of that pressure, which
irt'rNerßef:relY felt by all who are engaged in the operations
mjTillively'' Without money, trade cannot be carried on
atle i,, Or (Mccessfully.
qt!°°o-frfajjdlY increasing from natural. cruses- from the
TN atti'ece trade principles, and the increased facilities of
ti,,"i'e 0,, ,?tternal communication.
to t'll,3'iti get be a corresponding increase in the amount of
tstl):4°, 4-40e,u.:ation. This is notoriously not the case, owing
iretoi,,,elere,rat laws which limit the increase of our.money
illt ..,1 °F 1,-„e'l °uPPly (that we may be able to obtain and
'4llllellgec)t-iss' Particular article—gold—. which article the same
Ilehr:' to , ° sell at one unform price of £3 17s lqd per
W6it',.it.i -verY foreigner who may wish to buy it.
et it ou 48, that an extraordinary increase of our trade,
444:0ff,,,t to bring with it an extraordinary in.
litl'ast4i;gr Wealth, ceteris paribus, brings us instead,
Iviliiti• porpanic which robs the merchant of
indeed,t
ta" it eat' th iitheY tnust be extraordinary profits,' flirt
h-N4:lath'urious rates which our merchants and mann-
ri'te4,;qaleicarr compel! d to pay for the discount of legitimate,:
`,411' Po ii.rer• In feact such is the topsy•turvroess.of olu
ot, "irteota 'l°o, that our 'hope of improvement lies in the
l'os.:„‘° o p of
our trade and in our refusal of orders. Not
s.st,ti'late the ll- °Peratives are Not
over-worked or over-paid.
lotti'e4 in „Tv material of our manufactures cannot
ilii-e
t 4 'aired 'lope ens quantities. Not because we have
monrld
Lept,°:si..,4lo caliCo than there are people in the widewk
to
ir'„ or o, re fustian jacketi, than there are bare bac. s f
Illt,th'uati 41°1.° °f all the other necessaries and luxuries o
4' have. e 4
are men, women, and children to consume.
t,elll;tlYh aldlene all this, there can be no over produc:ion—
-144 ,t,seor, d, I say, then, that our hope of improvement
tptiiesieo,....4 'ailment of our trade ; not because of its undue 1
dtlt,, I>, ),,,°r it is not unduly expanded —but simply, and
l'itillstla -ealti°° an Act of Parliament, passed in 1844,
t I co: castieity of our currency, and forbids it to ---
' thilk; verbWth' aud-to expand with the expansion of our trade
'Op,O"'t, if :' aeBious •to put this matter in a proper light, a,
4lap It was
0 'ell . Properly understood by the masses, we should
‘11,11,W, x.radical reform of the currency.
list,' 4 jillitteed, before I conclude this, series of letters, to
,4641:1, of ro„al.° 'Promised, that " It is possible to devise a
"IV; topt;.°°Y unvarying in i's symbolical value; n°—
INZt:lllett:eting
teethe same thing—so as to be always a
tf '%•.butr° f r value of all exchangeable c?m-
- la ~46- reg-ovoacTBY.nn always in amount with the quanttlies
liht 40 416 . to the market."
.4irit Of :/ltkne I shall at once, proceed to consider how
Volis ' '844 9 '
tea uy a- to o ean be amended, so as to le ;-0.'4 lag, cetaMercial prosperity.
Ny. ~-",.: 4,7 it now stands, £14,000,000 of the currency
t'vt.11.441:: •- t" same foundation—the credit of the State.
l'ls,retli4:ifkrease or diminish, but this portion of the cur-
14e6 2 unalterably the same ; therefore, we may have
-44, •uctie
NI, lettAi Yat one time—too little at another.
a°lYl kotoiltder of our currency rests always upon the
",!1.ri0;.1.--elliefly on gold, The scarcity or abundance
°Osh_.
,'°4 -2"k`a depends entirely on the law of supply and
f
t„Nt"aerat„ i7,,..,44tinae5, in a perfectly legitimate condition o
iln!tLtlrldatrou
0°:, the demand exceeds the supplyr,and then
tho''',.ttke ' our currency begins to give way, and, as is
thi1.,1417 ( aeot, the immovable foundation of £14,000,000
'tte,‘ it iiii, that cut be depended upon.
Itilllce 4el\v a state of tldngs calling loudly for the in-
itt Wt °I Gov
tit ernment.
".°44t 41 1,34 adhere to the principle of a double foundation,
Ilt..boil,Yk aid to "Pat it to the altered circumstances of the
lilt t,rset
‘l,O the varying requirements of trade.. If these
4 '4iti''' kod the Bak f England is to continue to
.be
kthllittlit4,l4leya.l4°°,.4l„ Dak, letn ito have the power of contracting
,41Pet 7 havre i'ro on the other hand, they are expanded, let
41' 'ttont- Le Power of increasing it. Or rather vest this
Nty, rape
at 'lig and expanding the circulation in the
6_4140°,...t1ey •"irge, by enablin the Bank to supply everyll one
Iretpo;:ilt reasonable rates, who requires it
.ftorsattliesfacefiory
toks74l7ith, 41°f eettimerce, and can deposit
„,k,„0444 ``',l3 directors
41;4.'''' sallli h-llteatly tend ; e utilise the valne of money, and
47000 t.l:o4enelAiliolltiflucotu'aqt_iotnt the rates of discount,
11., tiii*e.44 of nay former le sersin..
1141 C I°4ll 'lt be accomplished, seeing the metallic founda-
tlN °,l tli. "Yelid the Ora of the Government and the
f
ottlt% 'e 1 control r than the laws o
~c ..4., -As ,aWs of nature are stronger 4. .4111. ' Y er. 4 At of Parliament can invest
th„.llk„
.teo,i, J ,rue ; but an C
Ptt:111,1114/t, 4', 411 d the Bank with the power of contracting.
P. me), 1 eVeUltlstances may require, that portion of
Zoft ..11'Pti.'11 Ist,ll'l4.lell tests on the credit of the State. If the
btl6,a; til'aCe;t.itut.atelY authorise the_ issue of £14,000,000
0%4,4 , need entirely on the credit and wealth of the
tkAt k v 144 t twenty, forty, or sixty, or . one hundred
khletlo,Y rob .
,111.1,10,(!oist 114,,.iithtere is a safe and practical limit to which this
isiigna,i4tio.sh be extended, namely, the amount of the
trlttst44 '' of the country, or, 9,114 atertino say about SIXTY
tk4,,Ptilttl..enta.n.ki„be 4.thorised to borrow this amount from the
Lttlltvaiellt. "'et the Government have the power of issuing.
qs,...tri -xVhOl ol.ttlational notes, and lending them to the Bank.
Zt1,;1.17‘.14005-'lntt now due, by the State to the Bank, say.
OtALtdely ,„,' b 0 cancelled by the issue 0fX14,475,000 of these
az...*11,,".°111,1 snob supplant £14,475,000 of our present
I,"tiltail,.."!tof '-'1,11e(611. These notes haded over to the. Bank in
414 t"Sitieia°vernrnent debt, the lost return of its weekly
.e 4,
4.' , . Ilttt stand• 7 ',Mt for the week ending 3.Bth October, 1856,
, thus 1,..—.

fall she

of the amount necessary to circulate the wealth of

the country

I lation of

. As oast experience shows us that, with a ciren-
rout .60,000.00 j, we have always abundance of

money, and as the taxation of the country amounts to abets
£00,000,000, it would give us a margin of £30,000,000.
Before our commerce could increase, so as to absorb this

great surplus, we should doubtless have discovered that gold, as
the foundation of our currency, was not indispensable to our
-"--- —that, in fact, wo could get on very well with-

welfare

The Act of 1844, thus amended—or, if you like, repealed—
the Government would become de
,facto the bankers of the

nation, enabling the Rink, as occasion might require, to— issue
a paper currency) based on the wealth, and never exceeding in
amount the taxation, of the country. Such a currency, re-
ceivable at all the public offices at its full value, could not by
any possibility fall to a discount. Such a currency being legal
tender would be convertible—not at the counter of the Bank
of England—but at the shop of every jeweller, every draper,
every grocer, every baker, every provision dealer, every any-
thing you please, in the United Kingdom. I say it would be.
convertible at all these places into everything that the heart of
• ' . .

1 man can
Ilifirrnnnn

With these notes the Bank would honour the cheques of the
Government, and so repay the loans it had obtained.

n any
that I

Set afloat by the agency of the BAnk, they would circulate

freely (I now quote from a letter in the NORTHERN TIMES of
the 21th instant). • ° They would circulate freely within and
only within—the limits of the United Kingdom." * * *
" No one would dream of exporting them, for though possess-
ing a value at home, like our postage stamps, like them they
would be valueless abroad."

Here let me pause to recapitulate and explain. I propose,
first of all, that the Government shall pay off the debt due to
the Bank with £14,475,000 of the new notes, varying in
amount from £1 to £l,OOO. And, in the next place, that in
addition to these notes, Government should be empowered to
issue annually notes of similar character, to the extent of the
estimated national revenue. A large portion of the taxes and
customs would certainly be paid in these notes, and cancelled
by the Government as they were received. Tho portion
remaining in the hands of the public would, of course, be
deducted from the next annual issue. Fur example :
Suppose—Taxation 1856
• • •

Notes received in payment of
taxes

£40,000,000

Notes remaining in the hands

of the public

20,000,000

£60,000,000

Suppose again--,Taxation 1857

£60,000,000

Notes remaining in the hands
• of the public since 1856 ..
Notes to be issued in 1857 not

£20,000,000

to exceed

40,000,000

£60,000,000

Let us now suppose that such a law was in operation for the
week ending 18th Oct.; and that during that week the Bank
had availed of its provisions, to replenish its coffers, so as to
admit of the rate of discount being safely reduced to 4 per
cent , at the commencement of the week the Bank owed the
Government £4,040,590. This amount might be invested, by
the Bank, in Consols, on behalf of the Government. The
Bank holds £11,103,896 of Public Securitie9, on which the
Government would lend to the Bank £11,103,896, and, to
make up £20,000,000, deposit with the Bank an additional
amount of £8,896,104, all in the 'newly created notes, thus
. . .

anticipating £20,000,000 of the money to be raised from the
taxation of next year, After the Bank had exchanged the
tz,irav,rlv or me promissory notes in its namong impart-
ment, for an equal amount of the Government notes. in the
Issue Department, the last return of the Bank would then
stand thus :

ISSUE DEPARTMENT,

Notes issued.... £21,155,445] Gold coin and

bullion • £9,231,185
Legal tender notes 11,924,260

£21,155,445

ARTMENT.
Gold coin and

bullion
Legaltenderuotes '4,47.5,000

£23,706,165

!PARTMENT.
Assets.

Bills discounted 19,054 088

Gold and silver

Government ee-

,curities

11,103,896

£33,238,021