The Sun.
London, England, 1852-04-22 00:00:00

THE GT3LO CURRENCY.

TO THE EDITOR 01, THE SUN.

Sia,—l perceive by the Parliamentary notices in the
public prints, that Colonel Thompson intends, on the
27th instant, to bring the question of the geld currency
before the House of Commons, and to move a series
of resolutions for the especial purpose of protect-
ing the fundholders against the consequences of the
dogma so long maintained by themselves and their
champion, the late Sir R. Peel, "that according to
practice, according to law, according to the ancient
monetary policy of this country, the meaning
of a pound is neither more nor less than a certain
definite quantity of gold with a mark upon it to de-
termine its weight and fineness," and that conse-
quently all obligations entered into with the public
creditor can be discharged in no other way than by
the payment to him of 5 dwts. 3 grs. of gold of
standard fineness for each pound of debt or of dividend.
As an old currency reformer, I need not say that I
most heartily rejoice that the bullionists have at
length, by any means, been brought to see and ac-
knowledge the truth upon this vital subject. It must
be a bitter pill for them to have to make so unre-
served an admission of former error. At the same
time, it is a great gratification to all those who, like
ourselves, Sir, have been for so many years steadily
maintaining the right amid the obloquy, the reproach,
and the sneers of ;our interested opponents, to see
that these men are now afraid of being held to their
awn words, and would gladly take refuge in the
very principle they have so long denounced--
namely, that corn or subsistence is the properstandard
of value, not gold ; that, in the words of Adam
Smith, " the revenue of a person to whom
a guinea is paid does not so much consist in the price
of gold as in what he can get for it," and that the fair
interpretation of any bargain entered into with the
fundholder is that he shall be paid the same value
that he lent ; at the same time recognising, as Colonel
Thompson does, in one of his proposed resolutions,
that the real value can be ascertained by the applica-
tion of the principle of a corn rent.
But, Sir, while I still heartily subscribe to this prin-
ciple so long contended for by the monetary reformers,
and so tardily admitted by our opponents, and while I feel
equally with Colonel Thompson "that the contract with
the holders of the national securities ought to be sub-
stantially fulfilled," lam wterly at a loss to con-
ceive how the Gallant Colonel makes out that, on an
equitable adustmeot, a balance of eight millions and
a half is due to the fundholders, and I await with no
little curiosity his exposition in the House of Com-
mons, by which be will have to support this aver-
ment. On the contrary, I believe the fundholder
has been overpaid, not to the comparatively trifling
amount of eight or ten millions, but to much
More than twenty times that sum—that, in
effect, the principal part of our national debt has
been more than doubled by its mode of con-
traction, and by the changes in the currency
effected by the Bills passed by Sir R. Peel and his
confreres, the bullionists. If this be so, which I will
endeavour to prove, it cannot be allowed that Colonel
Thompson should, without remonstrance, endeavour
even to substitute a good system of currency for the
present wretched pretence of a system, upon a false
plea; and that that which is a boon justly due to our
greatly injured productive classes should be urgently
demanded by him on the part of those who alone have
been benefited, and that to a most prodigious extent, at
the expense of all other classes of society. Let us by all
Means have the improvements long suggested by us,
and which our opponents now seem so anxious to con-
cede, but let us also clearly understand on whose pe-
culiar account, and for whose special behoof, these
im_provements are imperatively required.
I will now, Sir, proceed to the proof of what I have
Previously advanced; that the principal part of our
national debt—all that part arising from the prosecu-
tion of the last great war—has been more than
doubled by the systems of currency and finance
hitheito and at present prevailing.
The national debt on the sth January, 1793,
croounted to 238,231,2481., in addition to certain an-
nuities.

From this period to the termination of the war,
tY to the end of the year 1815, them was additional
debt contracted to the amount of 999,592,1661., of
Vaiola 284,581,7311. was afterwards redeemed by the
sinking fund, leaving a net increase of debt con-
noted during these 23 years of 715,010,4351. Now, it
11 Ulla particular portion of the national debt to which
re readers,
in the first place to call the attention of your
ene", and to ask them which is the party entitled to
Plain of its mode of contraction, the national
aitedito
was
is au
or the national debtor.
„,.,:uPPosed by most people that this 715,010,435/
nieet-itilly borrowed and received by the Govern-
ation ; but this is not the fact. There
l't(h7t
so much debt or stock created, but not
did noatmcont of money received. The Government
trentea get 1001 of money for every 1001. debt con-
', 4*
w They borrowed in a much more scientffic
mysteratiner"--ene much more calculated to keep up the
Y and profundity of the Chancellor of the
te''.',"equer's office. Money, at this time, was ordi
r,;'Y Worth, for the common purposes of business,
too, and it would have been
simple, obvious, and unscientific a mode—one too
palpable to the commonalty—to have crewed a stock
Dearing that rate of interest, and to have got that stock
subscribed for at par—that is, to have obtained 1001.
money for every 1001. of stock., No, the principal pert
was borrowed in a 3 per cent. stock. Now, it is evident
that money lenders would not lend money at 3 per
cent. to the Government if they could in other channels
make 6 per cent. of it. They would not give so much
eforA a 3 per cent. as they would for a 6 per cent. stock.
:mad so they only paid 501. or 601, as the case might
be, for each 100/. stock, while this 501. or 601. was
Written down, as a debt against the country and to the
credit of the fundholder, as 1001. Taking the aver-
of all the loans during these 23 years, 3 per cents.,
Per cents., and 5 per cents., I find from an extract
Made from Marshall's Tables some time ago, that
1734 of stock or debt was created for every 1001.
thoney received by the Government; so that instead
of 715,010,4351. having been actually borrowed and
received, not more than 412,000,0001. was so re-
ceived by the Government and nation—the additional
30a millions being merely the necessary result of
borrowing 501. or 60/, and writing it down as a debt
of 100/.
I know it will be argued, and with some degree
of truth too, that the best bargain was made at the
time- that was possible ; that the loans were sub-
'bitted to public competition, and that the highest
bidder obtained the loan ; that it made very little
difference in contracting these loans whether two
principal sums of 50/. each were borrowed, and 31. per
annum interest paid for each, or one principal sum of
1001. was borrowed, and 61. per annum paid for it.
This is very true, applying it solely to the time when
the loans were contracted. But the evil is, that this
moue of
high rate of 13 money has entailed a comparatively
interest for ever. The loan of capital
has long sinc3e, fita4from 6,7, and 8 per cent. in-
terest to 2,
a great raiasisre precliipers cent. ; but the nation is in
cot from availing itself of this
circumstance by the
imprudent bargain of writing
itself down debtor of a for every 601. borrowed,
and thus necessitatingatahpaei/jaymi.ent of 100/. whenever
it should find itself
since off the loans.
Had it not been for this unto°wairCillhyacillregcuuntance, the Government might ong
great reduction in thet
a. mount of the net made a very
ional debt.
Reductions, certainly, have
made,might but
have to the extent to wbi h nothing of c they
need have
been carried. nad the money bee,.
ns
° tral`eh
el is
le
44060
per cent. stock, no more than 400 milli
been borrowed instead of 700 millions; and
millions might have been gradually paid off` h„
Judicious Chancellor of the Exchequer by the creation a
Of a new 3or 1- per cent. stock at par, which would
have saved on the 400 millions some Bor 10 millions
Per annum interest. By the plan pursued, the ori
Rinal loan contractors or their successors and repre:
lentatives, the present fundholder
s, have been secured
lathe enjoyment of a perpetual high rate of interest
for „ the original sum lent, so that the 501. or 601. first
ft.nnoacribed is this day worth on the Stock Exchange
1711. This, as far as it goes, does not look very much
"ge the fundholder having "on an equitable adjust-
cellist" a large balance due to him by the nation. On
the contrary, it appears very strongly to indicate that
_credit has been given him for a very much larger
"1/1 than he ever lent to the nation.
liut, Sir, this is only one portion of the matter in
reation, and not, by any means, the most important.
have not yet touched upon the principle of the
real and true value of" the pound," which the bullion-
813 seemnow, for the first time, anxious to transfer
oom S dwts. 3 gra. of gold to a corn value. Col. Thouip-
thujie.ry properly acknowledges, in his 9th resolution,
the pound" should be the representative of a
r_ 1? quantity of corn, by providing that when wheat
si'L.uo!cl fall below a certain unstated price, Parliament
currency,
endeavour to remedy it by the issue of a paper
w.feaCY, so that 20 shillings, or the pound, should al-
of`Y__%i:tany rate, be or command a certain quantity
s fi'll4 • The Honourable Member thus repudiates
aura. 3 gr& of gold as the true "pound" of account,
resolution)
that the contract with the fundholder (2nd
and
tution) ought to he substantially fulfilled,
t'ue_! this contract was (3rd resolution) to pay him the
tea4Zalue received ; while the other resolutions go
enytral the principle of a corn rent, which, if it mean
till at must mean that the fundholder is en-
hivve receive back as much corn as he lent. We
no objection to widen this principle a
edit deal 44(1 to
tle,l tosaY, that not only is the national cr enti-
ayers_e"oclich corn as be lent, but as much of an
r applye sen t e d
es
(It 6 all other commodities as the money he lent
it: the tune
us ethreenP
at the assertion "
• question
andthis principle to the subject
what ground the fundholder has
ildiuttiannt at:),),alrn,snce_,
ion that he has not only not been over-
e' but
due to him, "on an eTil,
't
'413,411t4det d • he PPand" that was ti2e
- Ur" the. Prillefing 'Pitt of this Mpg'