The Sun.
London, England, 1864-05-25 00:00:00

THE CURRENCY QUESTION,

TO THE EDITOR OF THE SUN;
venturing an opinion on so important a subject
as that of the course which cught to be pursued in respect
to a monetary system for India, I do so in ignorance of
the customs and habits of the natives of that populous, rich,

„
and extensive dependency of the British empire, but with
an understanding that the silver which finds an entrance
into that country, either in the form of bullion or coin, is

sought after to be hoarded, or converted into ornaments.

Now, there is no possible means of staying or preventing
an extension of such a course, co long as the people of that

country continue to improve their condition, Whatever

may be tho amount of silver coined, it will be melted down

and disappear, so long as we continue our present system

of currency.

1 base all my argument on money on one broad principle,
and cannot understand that a sound and wholesome system

n one country can be insufficient in another.

I have ever been eatiefled that the monetary system of
England is fearfully defective, and if evidence is required we
have only to suppose the same causes in force in England as
now exist in India to establish the fret: Let us suppose there

to be no Savings Banks in England, and no funded debt
where savings can be invested to afford an interest, is it not

reasonable to suppose that if the operative classes are in a
thriving condition they will hoard gold and silver ? and if
they were to do so, would it not effectually defeat our
present system of currency ? If so, it follows that a
national debt savings bank or other securities affording an
interest, are absolutely necessary to prevent persons hoard-
ing the precious metals.

If a currency be based on a gold or silver standard, and
the prices of these metals be fixed, there cannot be any
great demand for them without its causing a scarcity of
money, which we know from experience will depress the
price of all descriptions of wealth and throw labourers out
of work and cause great distress, and until the people are
reduced in circumstances they will not trench upon their
savings, or bring forth their hoarded gold and silver.

If measures were passed, giving to coin a higher nominal
value Vian the metals possess, and if they were convertible,
the coin would be exchanged for bullion which would disap-

pear, and thus effectually destroy the whole system on
which our monetary system is based.

_ -- ------
that of the metal. So long as the stamp
A stamp gives to a coin a perfectly distinct value from
is respected a coin
will pass for its full denominated value as a piece of money,

although the intrinsic value of the metal may be little or
nothing.

The founder of Sparta made it a fundamental principle
that its money should not possess intrinsic value; and it is
notorious that whilst its coin was made of worthless iron—
iron purposely rendered worthless by being deprived of its
malleability—for which it was the scoff of surrounding
nations, the people of Sparta, were the admiration of the
whole world, and so they continued for nearly 500 years;
but so soon as Lysander began to break through the severe
prohibition of Lyeut
'llB against the use of gold and silver
money, from that time historians date the commencement
of her decline.

In respect to our silver and copper coins in circulation,
littleth e
iintrinsic
ino os i e
value respect hofawst
0111.1
metals. very many years been paid to
Many of the silver coins
in circulation are so
understood
eor
sf them,oodin
as when issued by 10 or thatl2 per
they are not worth so much
sweated, leaving the knaves and
Per cent., at therefore admits
of their being greatly
swindlers a large profit. in respect to our copper or
bronze coins there are manynd
of then not worth so much
in metal, as the sum they represent by 50 per cent, pieces
and slices cut off, without in any
medium
their character as pieces of
respect taking from
the
thisiellomunotfrye-xtchhaatnbgye.our present
money, or as of an altered
laws a pound currency is 123
1.274 grains of gold of stan-
dard quantity (that is to say, it contains about the 1-12th
part alloy), and that a shilling and a penny are fractional
parts of such gold pound, the silver and copper (or bronze)
areltpuisnwcheelld
coins being nothing more
than tokens representing the
sums expressed.
Why (if the coins before mentioned are mere tokens,
ing a value that doesrepresent not respectively belong to
them) should not the Government take measures for check-
ing dishonest practices with the silver and copper tokens,
by issuing them so depreciated in intrinsic value as not to
admit of their being sweated with any great advantage,leav-
ing the silver ones, however, of such worth as not to make
it a source of profit to forge or coin them.
We learn than in China or Japan there exists a paper
currency with notes fur a less sum than a farthing.'lWhere
would have been the real difference if instead of paper the
stamp or figure giving such notes a nominal value had been
affixed to parchment, leather, worthless iron (as in Sparta),
or to copper or bronze of little intrinsic value (as in Eng-
land), since none of them would circulate for the intrinsic
value of the materials, whilst all of them would equally re-
present the sums expressed.
There is undoubtedly an advantage in having a small
metallic coin as compared with an equally small paper cur-
rency, since it is not liable in a like degree to wear and tear,
or to be lost.
All trade was originally conducted on a principle of barter,
and there can be no departure from it so long as credit is
not afforded, and one product of intrinsic value is exchanged
for another—no measure of legislation can change a trans-
action of barter into money. A stamp attached to a piece
of gold only guarantees the purity of the metal. There is no
universal law which constitutes the precious metals money ;
therefore it follows that the acts of one nation are not
binding on another, and an act of Parliament has no more
control over the currencies of the world than an ant of
the natives of Australia would have over the currency of
England.
An English gold coin of full weight, called a sovereign,
circulates as a piece of money for a pound, the stamp con-
stitutes the piece of money a pound, and the gold on which
the stamp is impressed is of the value assigned to it by the I
stamp. There are not two values attached to a sovereign—
the stamp attached to a piece of gold does not add one
farthing to the value of the metal. It is true, an act of
Parliament renders the stamp on a gold coin inoperative
when it has lost a given weight, but it takes nothing from
the intrinsic value of the gold remaining ; the stamp is
cancelled, but the gold, like silver or anything else, is left
as a conmodity to find its value in the market ; its price,
however, which measures the value of the gold, and which
belong to the stamp, is fixed•
In the case of a Bank of England note for £5, it retains
an unaltered nominal value so long as it continues in circu-
lation, however much it may be torn or soiled; if, however,
it were possible to give to the material of the note an intrin-
sic value, either to the full amount of £5, or only to a part
of that sum, questions would certainly arise (if a note were
torn) whether persons should adhere to the nominal or intrin-
sic value. If an English cJin called a sovereign be used in
payment of a debt for the sum of a pound, the debt is dis-
charged in substance; or if it be exchanged for something