Northern Times.
Liverpool, Merseyside, England, 1859-03-28 00:00:00

MONETARY REFORM WITHOUT ACT OF
PARLIAMENT:
TO THE EDITOR OF THE NORTHERN TIMES.

Sir,—Having devoted much study to the subject
of Monetary Reform, with the view of distinguishing
the essential from the non-essential eleMerits of the
question, it has latterly became clear to me that the
law, as it now stands, will admit of our realizing
in practice all the essential elements of any really
sound monetary system ; and with your permission
I will lay before your readers a few observations on
this subject

Orie Of the most essential requisites of a sound
monetary system is, that currency notes should
possess a value wholly distinct from, and independent
of, their debt paying qualities ; a value which cannot
be increased by such notes being made legal tender,
nor decreased by their ceasing to be legal tender.

This requisite obviously necessitates that the notes
shall be based on a large and unquestionable
property basis. It is but a question of practical
detail to organise a Joint Stock Company, and place
it under regulations which would fully meet this
necessity ; and, as every intelligent reader will
admit this, it is unnecessary to occupy your
valuable space with describing a plan in detail.
As the notes designed to be issued by any such
company would, for legal reasons, require to be drawn
in the form of Bills of Exchange, such notes may,
for destinction, be denominated "Currency Bills," and
the company which issued them " The Currency
Bill Company." Let us then suppose a company,
under this title, to draw bills as follows upon some
appointed individual, and the latter to accept the
same in the ordinary manner; and let us also suppose
these bills to be engraved and printed like bank notes,
so as to be difficult to imitafe.

FIVE POUND CURRENCY BILL.
LONDON, Jan. 1, 1860.
Twelve months after deposit of this bill at
your house of business, pay to my order the
sum of FIVE POUNDS Four Shillings,
for value received. •
For the Currency Bill Company
£5 4s. JOHN CUSHMAN
To Mr. Thomas Goodman.

The words " Five Pound Currency Bill " at the
head of this document denote the intended value of
the bill, with reference to any contract or debt made
payable in currency bills. That is to say, if a per-
son contracted to pay £5 in currency bills, he would
contract to pay one bill drawn as above. A bill of
this description would possess a definite legal value,
on which the holder could at any time rely, if he
were dissatisfied with its current value in the money
market.
This latter, value would depend on the terms on
which the company discounted or cashed its bills.
If the bills were constantly discounted at 4 per
cent., that is, if the company engaged, under all
conditions of? the money market, to give five
sovereigns for every bill drawn for 51. 45., every
such bill would pass current for 51.—just like an
ordinary 51. bank note payable on demand. But
the company- could never help the country out of
its monetary difficulties if it engaged to cash its bills
at one fixed rate of discount. In order to perfect
the system, the company would require to act as
deposit bankers, under some such regulations as the
following :

Ist, Deposits should be received by the company,
both in currency bills and in cash.

2nd. The currency bill pound should be the unit of
account ; that is to say, all deposits, whether made
in currency bills or cash, should be entered as
currency bill deposits.
3rd. Currency bills should be received as deposits
at par, and all deposits should be repayable in
currency bills at par.
4th. Cash deposits should be received, and cash
payments made, according to the following scale
(the Bank of England's rate of interest,expressed in
the left-hand column, being accepted as a test of the
condition of the bullion market). Currency bills
should also be received in exchange for cash, and
cash received in
.exchange for currency bills, accord-
ing to the same scale.