The Sun.
London, England, 1855-12-19 00:00:00

THE CURRENCY QUEST2N•

(Frans the Daily News.) letter
In the columns of a morning contemporar hieh
has appeared under the signature of "Merccar,
advo-
cate understood to be from the pen of a well-n?"
cate of the Bank Act of 1844, whose ex'usive experi-
ence on
as a banker gives great weight to
(li,e,l:rtoiPcle in the
financial subjects. Although
'or.th in the...
.samejournal has endorsed the vaiewslese—t
disposed to aquiesce fully in
let-
ter, we are by no means
these vie ws, or to suffer some of the pr3ciples contained
therein to pass unchallenged. We dnur, for instance,
to the axiom laid down at the out that "the trade
and commerce of a country ars carried on, not by
means of its paper money or its ci-Julation, but by means
of its capital." That the capitald a country should be
the measure of its commercialransactions is unques-
tionably true ; and when thse transactions are con-
fined to barter or to . dea'ogs for specie, the rule
may equally hold good ; Jut the object of creat-
ing paper money is to arse trade beyond this pri-
mitive system by putting into circulation a por-
tion of the fixed capitp; of the trader, or of his compa-
triots. It follows, tlea, that so much of the circulating
medium as is not Qecie represents capital invested or
ire transitu, and is in fact the principal means whereby
the trade and commerce of a country is conducted. The
trader who drays a bill upon his customer to which he
has sold goody, and who negotiates that bill, puts into
circulation the proportion of his capital which is repre-
sented by these goods, rendering thereby that amount of
capital immediately available to himself for further trans
Eacqons. It may nevertheless happen that the conamo-
ditiss he produces involve the investment of a very large
proportion of his capital in machinery, and it is evident
that this cannot be put into circulation except by paper
money representing its value, or, in other words, by his
obtaining credit in proportion to the amount so invested.
That portion of the paper money which represents
gold in the coffers of bankers is only a more econo-
mical and convenient form of circulation than the
coin itself, and derives its value from the fact that it
is exchangeable for a commodity whose price is well
aecertained. The necessity of having such a basis for
part of the circulation we folly admit. It is requisite
for the adjustment of the balances of our foreign trade,
that all notes issued beyond the amount required for
borne purposes should be readily convertible into the
universal medium of exchange. Beyond this convertible
amount there is another variable sum required for the
daily wants of the community, and for the adjustment
of the balances of our home trade ; and this portion we
contend may safely be issued in the form of notes, re-
;..resented by securities the value of which is universally
known, provided a reeeocable margin is left for depre-
cation. The principle is in fact admitted by the Beek
Act, but " Mercator" and his followers seem unable to
escape from the charmed circle of the 14,000,000/. fixed
by that aet, and appear to think that there is some mar-
vellous virtue in those figures which enables them to re-
pre:, eat at all tines the exact sum necessary for putting
:suction the circulating capital of the country required
or ordinary trading purposes.
"Mercator" quotes the commercial panics of 1325
and 1337, but they only prove the lack of judgment in
those who controlled the issue of notes. In 1847 the
Bank Act was in full vigour ; but the scenes of 1837
were repeated in spite of it, and it was only on the an-
eouncement of a. periuission to relax its provisions, that
confidence was restored and the ruin arrested. In France
a metallic circulation has not prevented periods of cons-
mercial ; and, on the other hand, the elastic
issues of the Bank of France have not provoked them.
With a paper circelation regulated solely by the wants
of the community, at times below its metallic reserve,
and at others exceeding it three or four fold, that insti-
tution has contrived to maintain the rate of discount
much more steadily than we have dare, either before or
sioce the Act of 18-11.

It is true that, as " Mercator" asserts, the puliic
has the power of increasing, the circulation by de-
positing gold at the Ban!: ; but he omits to state that
it would be necessary to purchase this gold abroad
by freed sales of .other cemmodities, inasmuch as it
would often happen that the country where gold was
mast abundant might not be the one where our produc•
toes were most in demand. Neither can we agree is
the principle laid down by "Mercator" and his commen-
tstor, that the whole war expenditure is so much capital
abstracted from the country. That war is a great con-
snmer of capital unproductively cannot be denied, or
that commercial traneactions are thereby limited ; but it
acts more mischievously as a displacer than as a con-
sumer of capital, so long as the bulk of the expenditure
is immured in home labour. It may be true that we
have spent a hundred millions in unproductive war,
but to say that we have lost that amount of capital is
absurd. Because a Lancaster gun destroyed at the
siege of Sebastopol cost 1301., and is now valued at
Id. per pound as old iron, it is not a necessary con-
sequence that; we have lost all that capital. it
only means that that sum has been abstracted from
the capital of the taxpayers in general, and has been
t .ensferred to the capitals of the cannon founder and
his workmen. It is lost to the community, but is
gained by the individuals. Had the gun been sold to I
foreigners instead of to the State, 1301. would have been
aided to the general capital ; but it does not follow that
if capital is not gained it is lost —it may evidently '
transferred. The arguments advanced by "Mercator"
do not touch the real question at issue. It is not merely
whether the circulation should be based upon gold, or
should be represented merely by other paper ; it is not
whether it should be limited or unlimited ; hut whether
any fixed and invariable amount will at all times suffice
for the legitiniatu requirements of commerce. It is
for " Mercator," and those of his school, to demon-
strate
that the sum fixed by the Bank Act fulfils
that condition, and to show that the export of four
or five millions of silver to the East would cause
no greater derangement ifi 1855 than in 1844. The
fourteen millions of inconvertible notes might have
been perfectly adapted to our necessities at the lat-
ter period ; but we confess that we cannot under-
stand why they should be equally well fitted to
answer the purpose now. In 1844 the trader who
shipped goods to Australia would have to wait a year be-
fore the sailing vessels brought him his returns. Will
" Mercator" explain how it is that trade and currency
would be totally unaffected by the circumstance that fast
steamers would a few years later bring backethose returns,
not in goods, but in gold, in about 120 days l The mer-
cantile world looks for facts which will throw a light upon
that portion of the subject ; and without re-opening the
question before a Parliamentary committee, we strongly
doubt whether " Mercator" or his followers are in a po.
siion to assist them. Certainly they have stated nothing
which gives them a right to be considered as entitled to
pronounce a decision ex cathedra on so difficult a point.

( From the Morning Post . )

At the risk of trying the patience of many of our
readers, we again advert to the subject of our bank
note circulation, and the changes likely to be sug-
gested and discussed upon the occasion of renew-
ing the Charter Act of the Bank of England. We
are moved to do so by the pertinacity with which
the expediency of issuing for domestic use a
paper currency, not professing to be based on gold or
silver, nor representing a fixed value or quantity of either
metal, but resting upon taxation, and deriving value
from the power of paying every tax or demand of Go-
vernment with it, is advocated and pressed upon the
consideration of the public by theorists of the anti-bul-
lion school. We have been ourselves accused of favour-
ing the doctrines of that school, because we advocate
extending the power of issue, without equivalent gold
deposit, possessed by the Bank of England, beyond the
present limit of fourteen millions, which has just been
increased to fourteen millions four hundred and seventy.
five thousand, in consequence of the withdrawal from
circulation of private bank notes to an amount exceeding
seven hundred thousand pounds. But we most especially
eschew and repudiate any idea of ever putting into cir-
culation a note of any kind that shall not possess a fixed
value in bullion coin, such as shall make always. money
or money's worth into whosoever's hands tt may
fall ; and we are fully
convinced thatthere is
no method whatsoever of securing this equal value, ex-
cept by adhering firmly to the condition that the Bank
of England, or whoever issues the notes, shall be bound
to pay gold or silver for them upon demand. As for the
notion that it will auffice to make the notes payable in
taxes, or in satisfaction of other Government dues or
demands, it strikes us as quite absurd to expect that
equality of value can ever be maintained under such a
system. There is wanting the first essential element
of equality, viz.' a limit of the issue to the precise
amount required to do the work of exchanges. All
Government payments would, of course, at once be
made in the proposed notes, but these payments are
most irregular. The issue would begin at a value
equal to bullion, but if more notes should so come into
the market than were wanted, and the quarter's taxes
were fit yet due, how is the excess to be disposed
of The value of the notes must, of course, in snob
case, fall, and circulating once at a discount, is the
Government only to receive them at par, without a
power of re-issue ? We have this precise difficulty
and its consequences, in an apprehended national bank-
ruptcy, represented before our eyes in the example of
Russia.
The Russian Government commenced the very war we
are now waging, with such an issue of Imperial roubles,
been cempelled to seek awl has, in consequence,
re-
sources for Its further prosecution by a. loan offered with
the anomalous condition that interest shall be demand-
able not only in Russia, where it would be liable to be
paid in paper roubles, based only on taxation, but at a
fixed rate of exchange, at any one of five of the principal
cities of commercial Europe. The condition will, of
coinee, enhance greatly the rate of interest ; but it is in-
dispensable, and must al ways be so with a Government
which issues notes of credit for its interest payment,.
And if England were to adopt the same system, and to
vest in its Treasury the power of issuing notes repayable
only in taxes, our national credit would be annihilated,
and we should be compelled to add a similar condition to
every loan we attempted to negotiate for purposes of
war or peace.
This taxation-basis-currency scheme is precisely that
of Knblai Khan, of Toghlug Shah, and of the aseignats
of the French Revolution, to which we have before a -
Inched ; and history would be as worthless as au old song
book if we did not gather from it lessons prudence on
this point—if it did not tea4t, us' especially to avoid
splitting upon this mein
we ley it down, therefore, as an absolute and indis-
enseble condition that notes adopted into our currencY
awl made part of our monetary system shall al ways, at
the option of the bolder, be convertible into bullion
money. Under this condition they will circulate freely,
and never falling to discount relatively to bullion will al-
wet s be kept in use to the extent required for purposes
of ti attic and exchanges. We invest a public institu-
tion like the Bank of England with the exclusive
charge of this issue, subject to the 004(1419n, be-

cause we can control and watch the proceedings
and dealings of such of an institution, and because,
knowing the profits attending the exercise of the
power so granted, we can exact a large equivalent
for the benefit of the State. The equivalent hitherto
exacted has been the cheap management of the national
debt, and the lending of fourteen millions, without in-
terest, for Government purposes. The amount so lent
will now be fourteen million four hundred and seventy-
five thousand, because of the increase consequent upon
tse withdrawal of country notes. Why did Sir Robert
Peel fix this limit for the amount to be issued without a
gold equivalent in deposit ? Because he assumed the
amount to be the lowest limit of what would be required
for the circulation of the country—experience having
showed that for many years the quantity of notes in cir-
culation had never been below that figure. Of course he
took the side of caution when applying a new principle
to the banking system of the country. The experience of
1847-48, however, proved the amount to have been fixed
too low, and since 1844 19 and 20 millions sterling
have been found to be the ordinary and average quan-
tity of Bank of England notes required under the
condition of convertibility at all times for gold, and
subject to the restriction, which it is very important to
notice, of a prohibition to issue notes for a less sum than
five pounds. Remove this prohibition, and allow Bank
of England notes of one pound to be issued as hereto-
fore, and the circulation would increase at once to thirty
or forty millions, placing at disposal so much gold more,
now used as money. This is a resource available at any
time, if the finance of the nation should require it. But
we do not advocate a present resort to any such mea-
sure. Let us be content then still to confine the use of
bank notes to receipts and payments in excess of five
pounds; still we know that, even under this restriction,
at least nineteen million Bank of England notes will
always be in use, bearing a par value to gold. Why,
then, should not the limit of 1844 be extended from
fourteen to nineteen, or, at any rate, to eighteen millions.
The effect of such a measure would be to leave precisely
the same quantity of gold in circulation doing the work
of money amongst the population, but to relieve the
Bank from the obligation to keep four or five millions
of gold locked up, doing no work or service whatsoever.
The Government will have the difference as a loan, with-
out interest, in very convenient relief of its finances at
juncture.
Now, particular
Now, the question which will present itself to most
minds upon this proposition is—admitting even the
right of Government to require, and the power of the
Bank to lend, without interest, the entire amount of
average circulation—whether it is wise or necessary to
set any limit to the issues of the Bank except such as its
own discretion under the known liability that it is
called upon to pay in gold may impose ? There are
many sensible men, and the late Mr. Fullerton was
among the Dumber, who think it unwise to fetter a pub.
lie national Bank with any restrictions whatever of this
kind ; and, if the Bank Parlour could always be relief
upon fir soundness of jur-a,gmeut, and the Government
be relied upon for discretion in askiug foraccommodation,
we should be inclined to come to the same conc'usion.
But if the Bank's power of issuing notes were left
unfettered, seeing the relation in which the institution
iseetils towards the Government, and its period'ral •e-
-pendence upon it even for existence as a corperat 3 body,
we should much fear a Chancellor of the Esehequer's
temptation to attempt to turn the facility of issue to a,c-
eount upon any exigency which gave him present trou-
ble for resources. As long as there is a legislative pr, •
hibition to issue more than a certain quantity of in tes
otherwise than under a gold equivalent deposit, the
Bank directors had always an answer to any appleation
hr irregular aid. They would want this if thtra were no
limit set upon the issue. And for this reason, mainly, we
think the Governmentwill be wise. especlaity hi this time
of war, in retaining a limit extended only to the degree
that experience since 1844 may warrant. That limit, it
is now quite clear, may he extended safely to eighteen or
nineteen millions, to the relief as well of the public
finance as of the commercial interests which have hereto-
f ,re suffered by the restricted power of granting aecem-
,nodation possessed by theßank under the narrow limits of
1844. Any excess above the sum so limited would re•
main, as heretofore, to be covered by a gold deposit.

(From the Morning Chronicle.)

The impulse which we have given to the fresh discus-
sion of the Bank Cearter Act has revived the dormant
energies of its promoters and its opponents. The con-
troversy is now renewed in fu'l force. A leading con-
temporary has ushered into public notice, with beeormeg
deferential solemnity, a second letter, from "a high
financial authority," on the subject. The oracle, as be-
coming one superior to ordinary mot tale, speaks, to use
a classic or a City phrase, "from under a cloud." Bait
his adulation of " the wise and cautious statesmen wh,,
consulting the lessons of experience, have established
our monetary system," leaves no doubt that this high
financhl personage to,- k a very prominent part in framing
the ineasu'e of 1844. As Major Dalgetty exclaimed,
when he applied a gentle pressure to the throat of the
Marquis of Argyll, in order to extort a confession
of his identity, as described by Walter Scott, in the
scene of the dungeon of Inverary—"My Lord, you
must be a near friend of the Marquis, or rather you
must be the Marquis himself." Public rumor univer-
sally proclaims, that the chief prmioter of the Act of
1344 has now come forward, to make a last and despe-
rate effort to defend its provisions, its policy, and its
perfectibility.
In this defence all mention of the Bank of England
and its administration is studiously and adroitly avoided.
The ground is shifted ; and instead of an essay on
"the Condition and Conduct of the Bank of Bank of
England," we are favoured with an abstruse lecture upon
Capital and Curremny, which might via in rnyatiticatinn
with anything which has ever appeared upon those con-
troverted topics. We have no wish to deride the science
of political economy. It has been our lot to sit at the
feet of Gamaliel himself. But after receiving with im-
p icit faith the highest abstract dogmas propounded by
the most exalted of modern economical philosophers,
we certainly did discover—we confess it with shame—
that, like thousands of others launched into this wicked
world to find out the crooked and devious ways of mak-
ing money—the real science of the distribution of wealth
—we did discover that the sublime theories which in
greener years had captivated the imagination, were ridi-
culously irreconcileable, with the stern facts and expe-
rience of daily life.

When, therefore, the chief promoter of the Act of
1344 comes forward, and, dwelling with painful force
upon the miseries of 1825 and 1837, as having been pro-
duced by the " power" to pay gold for paper not having
been equal to the " obligation"—artfully suppressing ail
mention of the panic of 1847, when similar mischiefs re-
curred, and his own panacea was in full force—we must
regard it as rather a disingenuous proceeding, and
that the champion of the Bank Charter Act is striving
rather to achieve a triumph than to elicit the truth.
He tells us that what we want is capital. The
currency, paftly gold and partly paper, is in a
perfect state. It is gold alone, the exclusive representa-
tion of capital, of which we are deficient. As fast as
gold leaves us, the capital of the country is diminished ;
as it returns, capital is increased. Labour alone pro-
ducts capital. People make as many commodities as
they please. If they bring in gold, they increase the
circulation—if they take it out, such is diminished.
They are perfectly free agents. As a nation to be free
has only to will it, so a people to be rich have only to
wish it. This is sound and legitimate free trade in cur-
rency ; and the remedy for all the present evils must be
left to the community at large, acting in free and unre-
stricted competition.

These are almost, ipsissbna verlat, the theories of the
leader of the extreme bullionists ; and, considering all
we have written and published upon the subject, we are
lost in astonishment that such crude and idle fallacies
should still be gravely propounded. Our contemporary, too,
endorses these dogmas with as much blind confidence as ho
would a seven days' bill drawn on Lothbury or Lomber 1-
street. In demolishing the the theories now set up, we
do not intend to mystify our readers with economical
disquisitions of abstract science culled from the pages of
Adam Smith, Ricardo, Norman, or Torrens. One fact
comprehensively considered in all its bearings is worth
a thousand ideal speculations. We have a stupendous
fact recorded in history, which, confirmed as it is in its
essential features by the events of the present day, over-
throws at once all the idle theory set up of our alleged
want of capital. In 1797 the Bank of England stopped
payments in specie, wholly in conseqaence of a deficiency
of that which is now called specie or capital. Was not
the whale body of merchants saved from imminent ruin
by the Order in Council ? Did the country suffer from
it ? Was trade interrupted ? Were the exchanges ren•
dered unfavourable, except at a long distant period there-
after ? Was industrial labour checked ? On the contrary,
it received that vast impulse which has been increasing,
with some brief intervals of suspension ever since.
What did Mr. Pitt say before the Secret Committee of
0E: igoe lenapnhs.
Inquiry into the State of the Currency I He spoke more
diffidently than some moderin. d,otegdmautuinstssiderHateiosuaiodfthtbaet
in the extensive and comp
exchanges, he could only draw abglednebreaelucofnocrlutswioonytehaan,t
the balances of the exchanges ,
Nevertheless, previously
favourable
tbe g,la to
disappeared Engl a nd.
uS 0
1797,the they areust as
.t
does now, with all the Australian gold
.cominz in, but
ruAnnbinstgratchtrtobnegohriEesnagbbotnudt absaltaluiruoeusgho
limited sense quite inapplicable.
Imo f
llEi
ouurso Europe,
only—andexclusive
if
butot Fa ran
smallce England,
rwadatsylosnaoe
T a kfiantgsrlaeillieee. arein
population tl t
single piece of gold each person, it
once the reserve of the French and English banks.. What
becomes, then, of the argument about the free-will of the
English community, producing goods, and bringing in
or carrying out gold at will ? The gold disappearsht
t
against their will. Let the bullionists lay down what
dogma they may, hacked by trade tables, and wilder•
ing calculations of imports and exports, which drive the
human mind to distraction, the common sense of man-
kind will support us, when we point out that the secret
springs of human action, irrespective of trade and coin-
is'erce, will predominate over all. Self-preservation
prompts at this moment millions in Russia and else-
where to hoard gold to the full extent of their means.
This action alone carries away millions of gold, in spite
of all our efforts, by acting upon the currency, to cir-
culiveet it. By this process, in spite of our high fivan-
cial authority, a general deficiency of circulation is not
only an impossibility, but it is a palpable fac', both ale.
solntely and relatively. If the war goes on, it will be-
come an impossibility for any " wise and cautious "
statesman to attempt to conceal it, even as before, by an
absurd resolution of Parliament.
We will illustrate the disturbing cause, of the ex-
changes by another fact. Some years ago the good
people of Amsterdam, notoriously the best catnbists
in the word, were perpetually perplexed by a. variation
iu the current exchanges, for which they could not ac-
count. It was at length discovered that a see ly•looking
thrifty Jew, with a cnrpet-bag, was continually to be
eeen amongst the second-class passengers in the Datavier,
crossing backwards and forwards from London to Rot-
t"."ll2. Wary bo a smuggler ? ,Ito. It trouping

length that this enterprising individual carried in his
carpet-bag 100,0001. or 200,0001. portable Dutch Stoek,
and sold it in either market, negotiating bills against it,
just as he could contrive to turn a few guilders. This
was free competition. But it only proves that the new
element of foreign securities, now introduced to an
incalculable amount, acts upon the exchanges just
as much as so much sugar or tallow imported or
exported. The seller of a million of Russian or
Austrian Stock in the London market —a Demi-
doff or an Esterhazy—can carry away its amount
in gold ; and how is the operation to be detected 'I
The Rothschilds, the Raphaels, and the Bischoff-
scheims smile at political economists, when "these finan-
cial authorities" pretend to instruct them about the ex-
changes. Mr. Pitt was more diffident. But be, be-
nighted man I had not studied under the modern self-
satisfied philosophers, who have placed our currency
upon an immutable basis.
In this rich country, abounding with wealth above all
favoured nations since the creation of the world, within
a few years we have raised 300 millions of currency, con-
verted into fixed capital, to establish a system of loco-
motive intercommunication ; besides investing, perhaps,
an equal amount of surplus income in internal and fo-
reign securities. And yet a milliounaire tells us we are
deficient of capital ! We leave our readers to decide,
whether the whole mistake does not spring from a con-
fusion of terms. At all events, between 1797 and 1815
the people made a prodigious stride in national wealth,
and gold was, for all practical purposes, at one
time absolutely out of existence. Capital and gold
cannot, therefore, always be synonymous terms. The
vast banking undertaking promoted in recent years,
backed by millions of capital, is another striking proof
that there is no lack of capital in England. We say more.
The vast national funded debt of 800 millions has, by
means of Public Credit, and an ingenious system of bank-
ing founded upon public and private confidence, and not
upon capital alone, converted that debt into a perpetually
available pledge for raising fresh inexhaustible resources.
The whole of the new Credits M)biliers are founded
upon this system, and it is therefore sheer waste of time
to pursue the subject further.
We have not space to allude to the question of com-
petition ; but we will, however, add one single word
about the vexed questions of Currency, Capital, and
Credit. It is no doubt a high attribute of intellectual
superiority to subject our currency, capital, and credit
to a rigorous analysis. If we can define philosophically
the exact limits of each, fix their relative, ever-changing,
abstract value, and from these results elevate our presrnt
crude speculations into a mathematical demonstrative
science, it is doubtlers a great accession to human know-
ledge. The chemist who analyses the waves of the ocean
is a benefactor to mankind, whether his discoveries have
or have not a practical application. But the nicest and
most incontestable proofs of the chemical component
parts of the sea, can no more warn the cautious mariner
whence the gale will arise, or how high it will drive the
waves against his ship, than will be the vague distinc-
tions bet veen a hill of exchange, a bank-note, or coined
,uhl. vio wed as currency, throw light upon the future
storms which may be impending in the monetary world.
Tnis is all the difference between abstract inductive
,cience and practical experience.

INFLUENCE OF GOLD ON TRADE.

TO THE EDITO3 OF THE SUN.

SIAM--Gold is the principal cause of the high price o
food.

California and Au4tralia have exported to them hip.
rnense quantities of fbur, butter, cheese, bacon, and
manufamuued goods, to produce which great employ.
ment is given to our labourers, mechanics, manufacturers,
ship builders, sailors, and others, all of whom are con•
sumers of food, for which we receive gold in exchange—
an article that daei not in any degr:;t: of itself contribute
to our material wants.

If California and Australia gave us in exchange wool,
flax, jeer, timber, or anything that would feed, clothe,
or shelter us, there would then be full compensation in
trading with them. But it does appear that all the
people who are employed in raising gold, and in produc-
ing food and manufactured goods to buy gold with, are
giving so much labour and energy for nothing, and the
food used for such purposes is consumed without any in-
trinsic value being obtained in return—there being no
real value in gold beyond its u,e3 for ornamentation.
The estimated amount of gold raised in California and
Arietralia is already fifty millions sterling annually, a
suns exceeding the landed rental of England ar.d Ira•
Land ; and this is in addition to the supplies coming from
other parts which were found sufficient before these fields
were discovered. And so long as the standard price of
gold is guaranteed by Government at 31. 17s. 10Ad. per
ounce, and that any one has goods or property to dis-
pose of, there never can be an accumulation of gold in
the coffers of the Bank of England. And should the
supply still increase, that increase will raise the price of
food proportionately higher ; and as food advances ma-
nufactured goods fall, owing to the great consumers, the
working classe', requiring all their income, or nearly so,
to buy food with, which leaves them but little to buy
clothing and other manufaentred goods. Hence it is that
our home trade is flat, and spinners' and others wages
are reduced to meet the low price of manufactures.
We are told that we require a medium by which we
can convert Bank of England and other notes into an
article of standard value, and that that article is to be
gold. Concluding that the present quantity, 50,000,0001.
a•year only is raised, it wilt be 500,000,0001. increase of
gold coin to the world in ten years—a sum that would
derange and destroy every interest in the universe—and
where then will be our golden standard of value ?
There is also every probability of new gold fields
being discovered, the extra influx from which would
at once set aside its slue—for gold represents nothing.
Hut if we had V. and other notes circulated
by bankers who should deposit approved deeds
of estates in the hands of Government, aid
then to be allowed to issue notes for two-thirds of their
value, which would really make such notes deeds of
estates, and as stable as our institutions—for estates
yield every requirement of life, and are the true stand-
ard cf value—these notes might justly be made
legal tenders, the cost of making which would be com-
paratively nothing, and the stability of this circulating
medium would he beyond dispute. We find that
the Scotch and Irish system of Banking without that
security works so admirably that it is sometimes diffi-
cult to induce the people there to take gold in payment
for goods, as they prefer their one-pound notes, knowing
that their banks are established on sound principles,
each bank having numerous shareholders, many of whom
are very wealthy, and their whole property is liable for
the payment of their notes.

We have now only to look at our monetary dealings
with foreign countries, where we find gold holds a simi-
lar value to that of our own, and it is a great medium
of exchange in every civilised nation ; but the same
cause that will be the destruction of our gold circula-
tion will be theirs also. If we send goods to Turkey,
Spain, Russia, or America, and they pay us for them in
gold, that gold has been bought by them with produce
of some kind, or produce has been given to those who
raised it, and we could get that produce, or paper repre-
senting it, in exchange for our goods ; an enlarged sys-
tem of banking would arrange for and meet this without
difficulty ; and our notes, and those of many other
countrie4, based on deeds in the hands of Government,
would pass through bankers and mercantile hands with-
out any extra cost or obstacle, and would be sufficient to
meet all the differences of exchange arising between dif-
ferent countries.—Yours faithfully,
Cork, 15th Dec., 1855. J. P. BOOTH.