The Northern Daily Times.
Liverpool, Merseyside, England, 1856-10-22 00:00:00

THE CURRENCY QUESTION.

LETTER NO. VI.
sir TO THE EDITOR OF THE NORTHERN TIMES.
teeol4ls-2...Wi1l e
.mention one more instance—the latest on
01 1844. u, the relief afforded by a suspension of the Act
lerew YL 1847, the Directors of the Bank applied the
but thellntil the rate of discount was raised to 9i per cent.,
Act of .ig,cid diminished, and the panic increased, until theh
25th oeT44, was suspended by a Treasury Order, on te
Nee, eefler• That suspension instantly suspended the
fieetuall"ipated every feeling of alarm, and resor
confidence
Which w Y and suddenly, as if by magic, that
This as universally shaken.
theius4 and the facts in my two previous letters, prove
erideu °ea. They furnish us with the most convincing
tank eifle that tfie Act of Parliament which invested the
eireei.T.ogland with the power of expanding her. note
tapee'ten in Proportion to the circulation of her specie, and
ea4sejolrtinn to the Wants of the country, was not only the
blesser! for great prosperity with which this country was
also I„'er a period of twenty years at least, but was
retraner Providence, the salvation of the empire at that
asierePical point in the history of our nation, when
aleieu.ue operation of a bullion system—not half so per-
oteui: as the present—she was brought to the very verge
The',
for tv clearly prove that we were indebted to 'this Act
se the glorious
and enduring peace which we conquered
Plains of Waterloo.
4istc77 Drove that violent fluctuations in the rates of
blaienttrwere unknown until the Acts of 18W and 1844
thepi He entnrnercial credit of the country dependent on
ofth,cate or scarcity of gold. They prove that the tenden7
ThPy opts was,and is, to create, confirm, and increase panic.
erintrrave that a paper currency that will expand anat.
*alit, et, independently of the supply of gold, is the grea
'aeiglenr° i,only of our own country, but of the whole
Wha.te,,,at world.
ePlor Ir:we shall I say to establish the impolicy of theselt
-4
P a'‘e aetS ? If they produced such disastrous resu
Oese fi,e'ed of general peace—if the sin of our unpreparnend-
brought. wa,. which cost us so much life and
contesttreasure,
with b" s? little glory to our arms in the recent
they 4115515 lies
principally at their door—why
.s oul.di
the sty to dis race our statute book, and imperi a of g _
tnuni the 06:Qr country ?
„ atietare pan hand, when we are threatened with a
laelfe cin a period of general peace, wha.t happy
17"1„,flila. ;1g" es expected to flow from the adoption of
.a
rhA 'mare, to the limitation of cash payments in
gland, the issue of one pound notes by the Bank of
t:echkf',seeing that these measures were productive of
;11 a e—ntls'terKTe Consequences, when the nation was engaged
eir ea, St, that had lasted for four years prev"feuasrftuol
bcl(l9 etnlent ; when we were fighting against
~,I•diliq•„/,There/e for victory, but for existence;
intolerable; hen th
Oen taxation were becoming daily more weme
Ind Party
„ spirit was raging with violence at
powerful,
114 digeif enemies abroad were numerous and
"lqd; ~-,_`eaa and discontent were stalking throuh the
nobNujnen the means of the Bank of England were nearly
4d, and she was on the point of shutting up her
ounce,▪ 1:
Say if, at such a period of universal gloom, when
I„PteiraY of hope could penetrate the dark cloud of
• 20 misfortunes, the passine of a law restricting
'Net Payments, authorising the issue of two and one
lien,°tes, and making the paper of the Bank of England
rteri,fl'ender—removed, as it were by magic, all the
Lag whcial embarrassments of the country, all the suffer_
aiottg ,‘eih had been previously experienced by the indus-
-1,2 ti f-tasses, and almost all the discontent which was
Zosilani,l'al results of that suffering—how much more
e
h-TPt.e(ll7ollld be the results of a similar measure
dale, as now, we are threatened with a monetary
ri-et its" a Period of gleneral peace
rhtthCii!ellionists overthrow my arguments if they can.
til'Y fan disprove the facts which I havelstated. And, if
s.'al is ° so—as fail I'm sure they must—then let
-bakeidCy aside their fondly cherished sibprejudice aenedn
19e',
and
that their favourite system has
l'oSefl.; tn the scales of history, of justice, and of commonin
-%18,P0-4„ci. has been found wanting—woefully wanting
te sustain the great commercial interests
been
the been been entrusted to its care.
▪ Pa 7 ear 1800 the issues of the Bank of England ha d
A•sed to £16,844,000 from £9,675,000, at which they
"' "11 the 28th of February, 1797, the reserve
t6,l4lllioti
unn Lad been raised from .e 1,086 000 to
• t and a currency was provided, based on the
laetne Bank, which was amply sufficient to meet
ef'ea es-,,easing expenditure of the war, and the marvellous
son -er our commerce which followed the suspens ion
0,401 k Pannents
d -4 the readily obtained at the market price of
,'",r tilt% and remittedi to the continent, as it was required
'aPPort of our troops ; but its exportation occa-
ne uneasiness, and gave birth to no distrust at
ifljt iu
'tier t;rne it was enhanced in value, as compared with
its, tat' -...°we'ver, ;vas only the n. atural consequence of a
tasse ar, and had not the slightest influence on our
ti,Thktie,,ProsPerity.
e tlo-enaars sustained and augmented for a period of
Then s—in war as well as in peace—by the increased
of the Bank
ent ufl.Cre is the Bank.
for basing our currency
Ili" 1); ;14)r Maintaining that metal at one uniform value,
'ILO law of the State, and not by the natural law
in it el. and demand ?
-e,14t11-1.,; 13- in the imagination of the bullionist ; and,
111''' he ' all s the • s and o Parliaent, ld
orie
itrodkve !!'s natural tall f mgo
value after all. That value will
nly on the amount of labour expended on
for Its ita uProda
s'Z, aitisd theet exbtveUt to which the demand
the supply. I there-
!the leennntead that wem shall always be subjected to
1 3 tilte° -lenience arising from a drain of gold whenever
Or leRZa. value in another country exceeds its artificial
leo value
oat, ye, as
our in our own..
Preeioug own legislation has made a certain stock of
slew w.• metals indispensable to.oneiv. elfare, how can
My Itheut alarm the:daily diminution of that stock ?
tithtereiorriect in writing these letters was not to recommend
tcrarY reined for a temporary evil, but to show
rate bulliou s tY is irremediably defective, because
1 thaedy wr°llg. yasoedmto point out the necessity, as w ell
SViere"b Practieabilit ppnt it by a system
ea we 4/1411 be Yeffectually free from the oft recurring
fat which are the natural offspring of laws founded on
V4ht assumption that gold alone is the true measure
fence. and the only safe foundation of a national
eY•
remedyeive"er, I were asked to point out an immediate
for the
the re, I Iv_ present unhealthy state of our monetary
Isteeed uutd say that such a remedy is to be found in
*Pile ent of 1797 • and though the necessity for. its
t
' i,n11,4141441 'Pay not b'e so urgent now as then, still
eln_te orrui immediate relief, and add another link to the
It'"a thc, e,'ldelace which connects our monetary panics
Aegislation of 1819 and Is 4 4 . —Yours, Eze.,
J. W.

I---
„Elit Z° Tie EDITOR OP THE NORTHERN TIMES. 1
k; (reeTzsa ‘..•/•• W,". is laying his foundations so very wide
hst°ored ' I fear it may be some time before we are
a. °P li with a view of his superstructure, rising up
14.-• teete-asuwit.h. all. its' fair proportionst fully developed, so
°N. se his ideal of a monetary system that shall
i44'10a,,,' 48 with "MONEY unvarying in its symbolical value,
jetot,e ;aesuPrreesonting the same thing, so as to be always a per t(4,4o,.clities,
b?! the RELATIVEI value of all exchangeable
*
? in amount with the quanti•
: 444
ti:ctle„..abitevgaolinsg in the market, that is to say—
de..h in
t 4
MONEY purely representative in its character, of '
WI;.. Ine er shall never be any excess or any
fly, 4ey.,, -ggregate, there
kotteik There . W." is not the firstia who imagined such a
etli eases
tia nothing novel the doctrines which he
• ty 0 teac is rincipal merit lies In the perspi-
*hteer his languagein the imposing th
%In 1118 th4 -4 thetheory is supported, .
and in
in the ingenuity withwith
oia therge facts are woven into his arguments,
, . IF ~ i hd ugh knowledge of his subject which is dis-
t% 1• a n his letters. But "J.
He
W." is too sanguine.
I„, an ....111 not mistaken, I know him well..
'hate s'i,,,,thusiastic believer in the truth of his own
tlOtoa...irte forgets that the subject he treats of is not
ti,t4t the the attention. of the multitude. He forgetsf
t'll: I,es r- eregtieele r al public are as
eirmorant of the rationale o
llerevb.Y they are of th
."ni steries of Confucius, or
availbet ph es of the pyramidsy. He forgets that he has
4..% A ' tlot only their ignorance, but their indifference
"lt -etiee it is, that in his admiration of the perfect, he
to It
lo
lalb, ale and sight of the practical. But if hus. were less
thitt esiti he possesses talents which
hitt, thillake him re useful. He may rest satisfied
' 4;t4lhe; BPairte, of allm ohits.areguments (strong and conclusive
must elapse before he can
4t. :nee tiee' much time
there is a juster standard
atom aloe Public that
1,4(1 en ,1100 gold, and that the commerce of the
thi':,..3'14,1,13 safely conducted by means of a eur-
%tit that Zreally valueless. Now, I am disposed to
Yet ,„_'' oftb:',e might at once adopt. a sysw.tem, of money far
tiketniel", Perfection at which "J. . is aiming, and
thi'm pi. .4 accordance with the habits and feelings (call
114 feettkliees if you like,) of commercial men. I say.
'4..et.-4,,b11e?p ctinviction that the science of money is
%la l'ala,,?alciently understo,ol, to inspire us with a
the ri Year.noPe that " J. W. 's
ideal can be realised for
I d from
1 v ‘4el ' to co e We have, however, earne
s,ips.4 4... arguments with ()tit
atld
a'
* which "J. W." has already
tt-s°bNifis"That the monetary system of the late
tlisr
h:iell has l has
been the fruitful source of all.the pa
111414 iri9geiz,ed upon the public mind since its etablish.
re won
is:Na I,- --That these panics may be instantaneously
'l,ll)boate3ithe suspension of the act in which that system
ells,Nvh.t,"Pt
f. ' t„„, the investiture of the B ink of England
,tio„°*" ei) aYler Of issuing one or two pound notes, and
W of 81' -2,19 the circulation in proportion to the abs.tr.ac-
(3.4l,lN of our
and to the wants of the country," at a critical
I;,,',aY, h„,,°lle history, turned the ebbing tide of our pros-
-i.,"od 6.`"aused it flow almost continuously for a
ii, otlrt)th,`Weritv years
*441 such if 'such happy. consequences
.flowed,
14 a such a relaxation of our bullion system in a time of
t 9 such . a relaxation would produce still happier results
,„Pifth?` Peace
al°,lll4a-r1,7"-,:r_ha.t ?Al our commercial convulsions and
teh' eo‘nnics since 1819 may be traced to the violent
tie.", which contractions and expansions of the cur-
to-l_of a lawet' toast inevitably take place under the opera-
-1,,,,00 1,8.. Which fixes the amount of legal tender notes
'erstiee issued
curties other than bullion, without
4,,ixthly.ts_olthheatrequirements of trade.
el-ortio,e, a growing commerce requires a currency.
4 ~000 ,„,__a. to Us growth, and that if a capital of
41110,,ae1e 0"-"ot
tusias sufficient for the Bank in 1819 or 1844 as
littrtillt is now currency, a capital of at least twice thatas
pletett dela,..4.vpracsquired, and ought to be provided with
kete:toef eir4eBulatiosinbloell ItEisLit Issls)hrefEcrher
ttoissutostizahagtihneectohniat:
L 8.56. Now," J.W.'s'i letters e have fully established

all these facts, and I do not blame him for "going on towards
perfection." But I say that less violence would be done to
the popular prejudices by the relaxation of the system he
condemns than by its destruction. lam almost certain
that the introduction of one pound notes, to any amount
that might be required, by supplanting a large portion of
the soverigns now in circulation, would astonish the world
with the magnitude of our bullion wealth.
"J W.'s" letters have demonstrated that almost any sys-
tem is preferable to the present one, as administered by
the Bank of England, under the operation of the act which
took from that body the responsibility of regulating the
currency, and thereby greatly aggravated the evils that
must always be felt, in a greater or lesser degree, while
we have an artificial standard of value. But, hopeless
of seeing the sound theories of "J. W." speedily reduced
to practice, and bearing in mind the proverb, that " while
the grass grows the! steed starves," I would strongly
urge our currency reformers to satisfy themselves at pre-
sent with pressing the legislature for a revision of the
Act of 1544. Let them press for an Order in Council
immediately, susnending that act, and authorising they
Bank to issue a few millions of small notes, on the basis'
of national securities, and they will do more towards pro-
moting the cause of monetary reform, than by the most
elaborate essays on the worthlessness of gold, as a
standard of value.—Your obedient servant.
Liverpool, October 20, 1856. VIA MEDIA.

WHERE ARE THE POLICE?