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

THE GoLo CURRENCY.

TO THE EDlTetz uP 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 e our interested opponents, to see
that these men are now afraid of being held to their
*wet words, and would gladly take refuge in the
very principle they have so long denounced—
namely, that corn or subsistence is the proper standard
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
*pally with Colonel Thompson "that the contract with
the holders of the national securities ought to be sub-
stantially fulfilled," I am utterly at a loss to con-
ceive how the Gallant Colonel makes out that, on an
equitable adjustment, a balance of eight millions and
* 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 he 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 behoot; these
improvements 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 past arising from the prosecu-
tion of the last great war—has been more than
doubled by the systems of currency and finance
hitherto and at present prevailing.
The national debt on the sth January, 1793,
amounted to 238,231,2481., in addition to certain an-
nuities.

Prom this period to the termination of the war,
ay to the end of the year 1815, there was additional
debt contracted to the amount of 999,592,1661., of
11i1ich.284,581,731/. was afterwards redeemed by the
sinkinga_ fund, leaving a net increase of debt con-
tracted duri these 23 years of 715,010,4351. Now, it
particular por
is this tion•of the national debt to which
wish in the first place to call the attention of your
readers, and to ask them which is the party entitled to
complain,A of its mode of contraction, the national
Itltor or the national debtor.
18811pposed by most people that this 715,010,4351.
re„,ae-actuslly borrowed and received by the Govern -
and the nation ; but this is not the fact. There
f: certainly, so much debt or stock created, but not
dmount of money received. The Government
tra ?nat get 1001. of money for every 1001. debt con-
clad. They borrowed in a much more scientific
Alamystery uner—one much more calculated to keep up the
and profundity of the Chancellor of the
„s-e''achequer's office. Money, at this time, was ordi-
narily worth, for the common purposes of business,
',and 8 per cent. interest, and it would have been
ts'mPle, obvious, and unscientific a mode—one too
Palpable to the commonalty—to have created a stock
Dearing that rate of interest, and to have got that stock
subscribed for at par—that is, to have obtained 100/.
money for every 100/. 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
for, a 3 per cent. as they would fora 6 per cent, stock.
And so they only paid 501. or 601, as the case might
De, for each 1001. 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-
age of all the loans during these 23 years, 3 per cents.,
4 per cents., and 5 per cents., I find from an extract
I made from Marshall's Tables some time ago, that
1731. of stock or debt was created for every 1001.
money 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
3_ 03 millions being merely the necessary result of
borrowing 501. or 601, and writing it down as a debt
of 1001.

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-
mitted 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 6/. per annum paid for it.
Iheis,ois very true, applying it solely to the time when
raodie oarfs were contracted. But the evil is, that this
hi oh
rate4isfin,g money has entailed a comparatively
ginterest fur
6, 7,ever The loan of capital
has long silica fallen from '.
in-
terest
to 2, aand 8 per cent.
n, and 4 per cent. ; but the nation is in
a great measure precluded from availing itself of. this.
circumstance by the imprudent
itself down debtor of1:ol bargain of writing
and thus necessitatin for every 601. borrowed,
gotabpealliaeyemfent of 100/. whenever
it should find itself
Had it not been for this untowaprclaycica
il)g
off the loans.
stance, the
Government might long since have made
great reduction in the amount of the nationaal dveebr3t7
h
Reductions, certainly, have been made, but to
might have
nothing of the extent to which they
been carried. Had the money been raised in
per cent. stock, no more than 400 nail,lioapynwna
tidsi
inetc these
ab::atyuai oovi6donea
instead of 700 millions -
been borrowed instead
millions might have been gradual]
judicious Chancellor of the Exchequeryb
per cent. stock at par,
of a new 3 or 0
have saved on the 4.00 millions some 8 or 10
By the plan pursued, the o°rli-s
per annum interest
ginal loan contractors or their successors and
repre-
sentatives the present fund, holderin have been secured
in the enjoyment of a perpetual high rate of interest
for the original sum lent, so that the 50/. or 60/, first
subscribed is this day worth on the Stock Exchange
9911. This, as far as it goes, does not look very much
" on an equitable like the fundholder havingOn
adjust-
ment" a large balance due to him by the nation.
the contrary, it appears very strongly to indicate that
credit has been given him for a very much larger
sum than be ever lent to the nation.
But, Sir, this is only one portion of the matter in
i
question, and not, by any meanr, the most mportatit.
We have not yet touched upon the principle of the
real and true value of " the pound," which the bullion-
ists seem now, for the first time, anxious to transfer
from 5 dwts. 3 grs. of gold to a corn value. Col. Thomp-
son very properly acknowledges, in his 9th resolution,
that "the pound" should be the representative of a
Riven quantity of corn, by providing that when wheat
should fall below a certain unstated price, Parliament
Should endeavour to remedy it by the issue of a paper
currency, so that 20 shillings, or the pound, should al-
ways, at any rate, be or command a certain quantity
of wheat. The Honourable Member thus repudiates
dwts. 3 grs. of gold as the true " pound" of account,
and says that the contract with the fundholder (2nd
resolution) ought to be substantially fulfilled, and
that this contract was (3tal resolution) to pay him the
real value received ; while the other re,olutions go
to affirm the principle of a corn rent, which, if it mean
anything at all, must mean that the fundholder is en-
tled to rrceive back as much corn as he lent. We
have no objection to widen this principle a great deal
and to say, that not only is the national creditor enti-
tled to as much corn as he lent, hut as much of an
average of all other commodities as the money he lent
at the time represented.
Lot us then apply this principle to the subject
In question, rind see what ground the fundholder has
" the "'ertion that he has not only net been over-
paid, but that a balance is due to him, "oil an equit-
able adjustment." The
" pound" that was lent by the
kndholder daring the
principal part of this long