The Northern Daily Times.
Liverpool, Merseyside, England, 1857-02-18 00:00:00

THE BANK CHARTER

*0 THE EDITOII, 0.0 tFiE Nontxuati TIMEsa
Sir,—As Parliament is about enquiring into the
merits of the Bank Charter Act, with a view I fear
to its continuance, I trust that a few remarks will
not be out of place relating to its demerits There
can be no reasonable doubt that this Charter, if
permitted to exist much longer in-its present form;
will not Only bring disgrace Upon our law-makers,
but sooner or later unparalleled misery upon the
people of this kingdom. The first objection to
-the existing Charter is, that its very essence is
based upon falsehood, for it promises to pay notes
in Gold on demand without having the means of
doing so. I imagine that, in communities, as with
individuals, it is .dishonest .to preinige that which
they cannot perform, and surely none the less
dishonest when the promise is made with the ex-
pectation and hope of not being called upon to
fulfil it. The question therefore stands thus:—
The Bank issues Twenty:-four Millions of Notes
The Bank has only Ten Millions of Gold.,'Tlie'Law
requires the Bank to exeliange Notes
for Gold: this the Bank cannot do beyond Bs.
in the pound ; so that, whenever money is
required to -carry on trade or war, or to fill-up
the deficiency of food from short harvests, the
trade of the country is brought. to a stand-still,
. and much inigery; both private and commercial,
follows:
.The:Bank is therefore placed in a false position
by the present Act; false to itself and injurious, to
the public.. The remedy iS simply this, that the
nation should repay the Bank its Capital (Gold)
which it has borrowed, and then money, like all
other articles of commerce, will be regulated by
supply and demand:
Ist.—There can be no difficulty in the nation
finding- this Money, when we are reminded that
within the last twenty-five-years from two to three
hundred millidns have been intested.in railways,
leaving otttof consideration the immense foreign
loans and foreign investments, as well as those at
home of other descriptions ; Besides, thedeposits
of:the public in the hands of the different London 1
Bankers exceed Fifty Mill'Ons.
2nd.—if the addition of the gold of California
and Australia has already bad the influence of
raising the value of all proddets throughout the
world fully 30 per cent., why should we iherease
this evil by an issue of- Fourteen Million's of un
represented paper money? The advance in the
price of butter, cheese, *bacon, tea, coffee, sugar
leather, &c., and indeed- all the necessaries for
poor Or rich, has been upon an average more than
40 per cent since the discovery of Gold.
The higher the value of products in this country
the higher the cost at the place of groWili; so that if
by the addition of fourteen Millions of Notes we
raise prices only 10 per cent., and we import One
Hundred Millions yearly of merchandise into these
kingdoms, then we pay the foreigners Ten Mil-
lions per annum more than is necessary, and thus
we lose the Gold as fast as it comes in.
Therefore, Fourteen Millions of paper money
cost this country at least Ten Millions per an-
num. For be it understood that whenever goods
rise in England the foreigner is immediately
acquainted with the fact, and he raises bis price
accordingly; we may conclude; indeed, that all
artificial money driteS out an equal quantity of
Gold. -Whether, then, we 'debase arid inflate our
currency by an admixture of paper, or by sticking
a half sovereign into a penny, and calling it a
sovereign, the effect is the same : for the value of
goods will rise at home through the increase of
circulation, and when money has to be , paid
abroad we must send two of these debased
,sove-
reigns instead of one. We may take it as a rule
also that the more debased our currency is the less
we can purchase with it, and the. higher our
standard of value the lower the price of merchan-,
dize. So in a rich country like •Pngland the ques-
tion is not one of quantity, but of quality. I repeat
that the effect of adulterating the currency by an
addition of paper is the same as adulterating it by
brass or copper, but if anything, worse with the
paper, for the foreigner can take the G.old and
leave the Paper •to be cancelled (is it must be
under the Act of 1844) ; so that the country is
deprived of double the amount of currency when
ever real money is thus required, but in the other
case he cannot take the gold without the brass.
I repeat further that a paper currency-as it
exists in England is the surest possibre means of
starving the poor—for the laborifer is paid his
wages of lOs or 20s per week in a gold currency,
but every article which the poor man requires to
support.life and comfort is raised to ringartificial
height by the paper, so the labourer thus- pays,
the difference between paper and gold. The
argument, that England is better off than other
countries is no argument whilst two or -three
millions of her people are obliged to live upon
one half the food that nature needs, and whilst -so
many of her people are actually in a state of star-
vation. The way to- drive gild out of the kingdom
is to make plenty of paper money. See the Bank
Returns previously to any of- the commercial
panics during the, last century.. if we inal;e Fifty
Millions more paper circu'ation we can drive away
every sovereign and "every shilling. The way to
get plenty. of gold into the kingdom is by cancel-
-16-1g paper money ; see the Bank Returns after all
the panics when the paper has been cancelled or
withdrawn.

No Notes, therefore, ought to be issued without
being represented by orie (or both) of the precious
metals, the same as at the Bank of Hamburg. If
the Bank of England will 'not accept a Charter
under these conditions, any of the Joint-Stock
Banks would ffonly be too happy to do; so, or a new
Bank could be readily established upon this prin;
ciple, with a capital of. Twenty Millions, if neces-
sary—atid. a very profitable speculation it would
be if. the
,G-4.,yerument ,would patronise the under.
taking by giving to the new Bank the care off-the
-deposits of the public departments, the same,as it
now does
.to the Bank of England. - -
What can limit, the greatness, .presperity, or
wealth of England ? _ Nothing but this Bank
Charter, which allows paper to be called money.
All the bad. laws in other matters put together
would be comparatively harmless if they left us Free •
Trade with real Money, and no sluuu circulation,
With the earnest hope that the Chancellor of the
Exchequer will arouse himself to the importance
of his position and the magnitude of the question, •
and thus win the gratitude of his country,—l am,
Sir, your obedient Servant, _ •

.Felthaiit, February 14, 1867. EDMUND PHILLIPS.