The Sun.
London, England, 1855-12-25 00:00:00

THE CURRENCY QUESTION.

The following are the three letters addressed by Mr.
Salt to the editor of the Times, with the reply of the
Times thereto :

Sir,-1 think your comments on my sayings at
the meeting on the Bank Charter Act give me a
claim for a space in your columns for explanation.
You say that I " tantalise you with a promise of
safe but inexhaustible riches," and you assume that
a regulated issue of paper money would not give
the honest labourer full employment at remunera-
tion prices.
Thereon your imagination indulges in an amus-
ing picture of a Chancellor of the Exchequer hunted
home by packs of countless thousands of Man-
chester spinners, Dorsetshire labourers, Spitalsfield
weavers, distressed needlewomen, &c.
Witty if you will, but pray keep in mind that a
spice of wisdom would not mar your wit, and that
all decent feeling of humanity must for a moment
have slumbered, when you could enumerate so
lightly classes whose very names call up recollec-
tions of suffering, neglect, and social crime too
strong for words.
But to return to your Chancellor hunt. What
are the facts ?

A diminished issue of money has invariably re-
duced employment and multiplied deputations,—
set all the packs in full cry ; while an increased
issue of money has invariably increased the em-
ployment of labour, put an end to deputations,
dispersed the packs, and left the Chancellor sleep-
ing undisturbed in his form. During these re-
laxations of the money laws the deadly discords
between the Government and the people have
ceased ; even Chartism has been voiceless, and the
governing and the governed seem to have forgotten
each other's mutual existence.

But you appear to doubt that such will be the
result of an increased issue of legal tender. Let us
see what will become of it.

It will not be locked up, because, while it is so,
interest is forfeited and capital also, as much so as
if it did not exist. Therefore it will be made some
use of. Now, the ingenuity of man cannot devise
a mode of employing money without employing
labour to that extent ; and if the issue of money
be maintained, tie power that creates wealth will
always effect its distribution, ministering equally
to national wealth and individual happiness, and
what you call one of my "delicious moments" will
be so far perpetuated.

But a fear crosses your mind. " Who," say you,
"is to stop the floodgates ?" I ask, who stops
them now ? The law ! Have we not 14 millions
of legal tender paper issued on debt-14 millions
of paper convertible into gold, without an ounce of
gold to satisfy the promise ? You see, sir, that the
system you uphold is not a pure and perfect chry-
solite. It is the law and not the gold that limits-
this issue, and closes your floodgates.
Then comes the question—Why was this amount
of inconvertible paper fixed at 14 millions ? Be-
cause it was needful for an indebted Government.
But shall there be no honey for the people, and
would it not be more creditable that the necessities
of the governed should be considered as well as
those of the governing ? Is it the end for which
Government was created that it should take care of
itself, and utterly neglect and damage the interests
of the people ?
You say " there is a force and simplicity in the
words, I promise to pay on demand.'" Now, I
will grapple with you on that point, and show that,
taking these words in the sense used in the Bank
of England note, they contain more of fraud, folly,
rnd mystification than any words in human lan-
guage.
The law assumes assigning to the promise to pay
a definite quantity of gold; it fixes the value of the
note. It does no such thing as fix that value.
Abundance and scarcity are the only regulators of
• value.

By the issue of paper money, in addition to gold
money, money is made more abundant ; abundant
money creates confidence, investments are multi.
plied, a vast quantity of bills at a date are created,
this increased quantity of money and the increased
rapidity of its circulation lower its value, till the
exportation of gold and the withdrawal of the
paper again lower the prices, and RO all trade is
made an alternative of speculation and ruin • honest
industry is sacrificed, and the watchers of thei turn
of the market alone thrive, and this is the plain
and simple meaning of " I promise to pay."
Froni an inherent necessity the use of paper
money has grown in proportion to the progress of
commercial civilisation, till it bears a dominant
proportion to the use of metallic money, that the
metallic money, though it can disarrange, is power-
less to regulate.
The fixing the price of gold by Sir Robert Peel's
bill is pure Jack Cadeisin. If fixing the price
fixes the valve, wily not fix the price of every-
thing t Why not fix the price of bread at id. the
quartern loaf ? Simply because fixing the price
does not fix, but merely disguises, the fluctuations
ia the value of our legal tender—fluctuations which
arbitrarily disturb and alter all other values.
Hence the frequent ruin that has broken up our
prosperity, disorganised ail its elements, and made
our wealth, our insolvency, and our pauperism
alternately the wonder of the world.
Hence it is that the Times, awakened from its
" delicious dream," has to guess and wonder
whether we shall get over the 4th of each mouth
without the suffering and humiliation of vast in-
solvency ; to watch with sleepless vigilance the
condition of the gold in the Bank coffers, to be
racked by hope and fear if the arrivals from Aus-
tralia .be delayed a week ; to be agonised by an
east wind. All because we persist in staking our
existence on the possession of gold, and at the same
time in supporting a law that renders it impossible
we should permanently retain it.

I say the law prevents the possibility of our
keeping possession of the gold.
Gold money and paper money will not for any
length of time circulate together at equal values.
There are two distinct values in the coin—the
legal tender value and the metallic value, and these
Flo not coincide, but vary inversely to each other.
Thus, supposing a large quantity of metal to be
taken up by the Mint to be coined and issued, the
bullion would become scarcer and rise in value,
while the legal tender would become more abun-
dant, and fall in value.

At Melbourne, when coin had become very
searce, an ounce of coined gold actually commanded
an ounce and a third of uncoined gold of equal
fineness.

While the monopoly we have assigned to gold
raises its value as metal, the issue of legal tender
paper, making legal tender more abundant, lowers
the value of the legal tender. The price of the
gold being fixed by the law which binds the Bank
to take all the gold offered at 31. 17s. 9d., and to
pay it out at 3/. 17s. Mid., this alternation in value
of money is, for a time, only indicated by the rise
in value of all other articles. This rise stimulates
large exports. The importer looks around for his
returns, all commodities have risen. 'We are under
no engagement to supply iron, load, tin, or any
other article at a fixed price, except gold. We
thus bribe the foreigner to take our gold instead
of our goods. The gold being gone the Bank is
compelled to reduce her issues of paper. Eight
hundred private mid joint-stock banks are instantly
afflicted with the cramp, and seek to lock up the
remaining money by increasing their reserves.
Now, as unreduced debts cannot be paid by re-
duced money, this phasis of our system is equiva-
lent to a general decree of loss or insolvency against
all who by commercial enterprise have been con-
tributing to the welfare of the country.
Just at this moment the watchful Times advises
caution, recommends. all to limit their transactions,
which means limiting employment, which in
limiting the life of the labourer. It is equivalent
lc a procla!vation through theland,7ootherget
ye
to the workhouse or to your graves:'
hebnemllye,
is beginning to inquire into a system ecreas
resource is left to the labourer thrown out of em-
ployment by this fatal system.
Even the press, the tardigradew
press
g
c
mercial civilisation.
daily more incompatible with the advances of com.

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The paper system, which the instincts and neces-
sities of the people have continually enlarged,
ca n•
not longer be permitted to rest on the narrow basis
of gold, rendered unstable both by the law and by
the increased rapidity of communication with
foreign States. A foreign loan or speculation,
.a
short harvest, a telegraphic despatch, anything, in
short, may, by causing a sudden exportation of
gold, derange our whole commercial system. I
t carcely need recall to your mind how
requent and fatal such panics have been,
now fertile of insolvency, misery and crimes,
and that in the depth of our ruin and the
triumph of our prosperity the amount of our wealth
was exactly the same,biitdisorganised by the failure
of our monetary system. It will be well for the
T. inies seriously to consider whether it will be be-
coming its rank and character to be the first to err,
the last to learn, in a. matter so deeply involving
the interests of civilisation and humanity.
It is a vulgar error, that the value of legal tender
money depends on the obligation of the issuer to
redeem it in gold, or to redeem it at all, or to give
any security whatever.
The value of wheat depends on the fact that it
ministers to the great human necessity of satisfying
hunger. The value of legal tender depends on its
legal power of ministering to the equal human
necessity of satisfying debt, and in both cases those