The Sun.
London, England, 1839-10-08 00:00:00

THE CURhENCY AND A S'LVER

STANDARD.

TO THE EDITOR OF THE SUN.
SIR,—In you paper of last night, you point out
with great propriety the state of the currency, and
credit of this country ; and you look with alarm,
as every other honest man must, to the possibility
of the Bank being exhausted of gold, and of the Mi-
nister stepping forward to sanction the issue of one
pound notes.

You see; to think that the issue of one pound
notes will restore credit and confidence in the City,
mnd place commercial affairs as they had wont to
be. I entirely agree with you in that opinion ;
bar, I differ from you in the recommendation which
you offer as a remedy for the existing, almost un-
exampled state of public credit. You ask why is
Ittnsilver made a legal tender as well as gold ? and
you conclude that a suspension of cash
Payments would not he produced, as we could
always in that case, have silver. You state as the
ground of that opinion, that the proportion of silver
to gold in England is not correct, and that gold is
dearer on the Continent than in England ; and,
therefore, the )
,c;old is carried from England to the
better market. You further think that, if silver
were the standard, that it would remain in England,
and our payments in commerce would continue to
be madly in metal money. In this, I think, von are
in error ; and I am somewhat surprised that you do
riot perceive that the same reasoning by which you
explain why gold is exported to countries where it
Is dearer, will apply, and must apply, equally, cn
the same principle, to silver, were it made
the standard or legal tender, to those countries
Where it is dearer than in England. You
seem to forget that the currency consists at present
of gold and paper, silver being only as counters for
a limited amount. If you make the currency to
consist of gold, of silver, and of paper, let me ex-
amine what would be the result on your own
reasoning. In the first place, I agree with you that
the coffers of the Bank, and the stock of every mer-
chant in the country, will be exhausted of gold when-
ever
.gold becomes dearer at Hamburg or Paris
than In London, and continues for a long time to
be dearer abroad ; and, on that principle, the gold
as left, and is leaving England. Hence the alarm
m the public mind—hence the doubt as to what
will be done to pay the bank notes of the Bank in
'Peel; or by the Chancellor of the Exchequer to
Pay the public dividends, and discharge the ex-
penses of the Government in specie. All is at pre-
Sent uncertainty and doubt ; and hence the state of
alarm and paralysis in all commercial transactions.
I also agree with you that it is a serious reflection
On the common sense of the Parliainent, especially
after the experience they have had in 1825 and
Ibas, to allow any body of men, however respec-
tae in mercantile society they may be, to have the
Power of producing that vicious state of things
which you have described, and which becomes so
injurious to every interest in the country ;
but, above all, highly discreditable and injurious to
the credit and the character of Great Britain. I
now ask you to tell us what it is that makes gold
now dearer in Hamburg than in England ? We
have seen that, in the last year, and up to August,
1838, gold was of equal value, or even dearer in
England than in Hamburg, and the exchanges were
for a great part of the year in favour of England,
the best proof that gold was higher here than in
Hamburg. What, then, has produced the
change ? What has made gold cheaper in Eng-
land than in Hamburg ? The correct answer to
that question will, if understood, apply equally to
Your proposition of the silver standard as it will to
the gold standard. The cause of gold becoming
cheaper in England then is, that paper money has
been issued in excess, and the currency has been
thereby depreciated. Whenever a mixed currency
becomes depreciated, the most valuable part of that
currency will be sent abroad. Gold being the
most valuable, has, therefore, been sent abroad, and
will not be brought back as loug as the paper con-
tinues in excess ; and that depreciation of the cur-
rency accounts for the Foreign exchanges being
against England, by whickahe bullion has been
drained. If the currency Consisted of gold, silver,
and paper, the same result would take place ; the
gold and silver being the most valuable, would both
be sent abroad, la:dbe gold has been, and the pa-
Per alone would remain, as it now remains. I
will further state, that we shall be obliged, if
e paper money continues to be greatly de-
Preciated, to give an additional vaiue to the
silver, to make them tokens, as was done
with the Bank tokens during the suspension of cash
Payments, when a piece of silver, intrinsically worth
only , 4
-s., was
passed at the value of ss. If I
have made my
statement clear, you must be con-
vinced that the making silver a legal tender in the
currency would not answer the purpose you have
in view, the preventing a suspension of cash pay-
:items ; no, do not be longer deceived, the Bank has,
vmrl sheer greediness, and a desire to make a large
interest and profit for its proprietors, scandalously
issued bank notes in excess, amounting to an in-
crease of 14 th or 1-sth of the whole amount of issues,
i• e., to 20 or 25 per cent of the whole circulation,
and, in 1825, that excess has driven from the
front the country nearly all the gold. The issue of
one pound notes will only increase the evils of our
Present situation ; they will complete the exhaus-
tion, they will take the place of the sovereigns we
now have in circulation for exchanging five pound
notes, and for the ordinary purposes of change, and
In a few months, if many notes are issued, every
piece of gold will leave the coun.v The only
remedy to prevent all the metals going out of the
country is, for the Bank to reduce its securities,
sell its Government Stock, call in its paper, and
discount largely to the commercial world. You
will bear in mind that three-fourths of all the dis-
counts to merchants in England, Scotland,
and Ireland are made in ordinary times by private
banks and by joint stock banks ; and that the Bank
of England does not in the ordinary state of public
credit, discount one quarter of what is required and
Obtained. But at present, in the state of uncer-
tainty of the money market, produced in the man-
ner I have stated, by the misconduct of the Bank
°_,l England, every banker reduces the amount of his
discounts, and thus throws difficulty on the mer-
chants.a Those merchants who have large balances,
,MI in ordinary times leave them with their
°Wa.nkers, become uncertain, in the state of alarm, of
llat may happen, and therefore keep their cash at
dhome, and thus it is that the trading interest is
eprived of those two usual sources of discount.
may be asked, will not the Bank of England
givebanks and
the assistance to the merchants which these
ri" and capitalists have refused ? No ; the Bank
cannot, having most unwisely invested the larger
Proportion of the funds it has received from the
Public for the bank-notes issued, and also the larger
I,]?rtion of
the cash deposits of their constituents in
'itnvernment Securities, which are now not saleable,
thus prices as the Bank is willing to take. By
l 3 means the Bank locks up the money it has re-
ce'ed ; and, on the best banking principles, ought
vhavel° had at least one-third of that amount ready,
tavailable securities or in bullion, for discounts.
hc Youl7th doubt that fact, look at their last return on
of
September, when they had
£17,960,000 of note circulation, and
: 7,781,000 of cash deposits.

X 25,741,000
ar:lable in cash on demand; and yet, by their own
-toceaunt) they bad only 2,816.,0001, bullion
e_ Pay the 25,741,0001. Moreover it is quite
iricrtain
-,. that the bank had not more than 21 millions
'-'ondon, and in all its branches, of gold and
bear Le`iin, and bullion—a pretty condition for the
pi;:
(3f Enaland to be in, which has monopoly
• pi;:ited that the public credit of the British Em-
pro be supported, and the currency kept at a
Ilt°l3er •
to value ; and how can it pay the. public credi-
tllB Week in gold, if the stockholders shall
ea-ire to ask for it? Let the paper money be
vah,ed in, and the currency raised to its proper
and there will be no want of gol. o not
ceive
yourself or others about silver as .a
reDmedy.
t.,b, I remain,
Co"dtE TRADER AND ANTI.MONOPOLIST.
4-on, October 4, 1839.

nek7puke of Sussex arrived. at Derby on Wed-
tiou
.tternoon, by the Birmingham and. Derby June-
-14• Railway. The train was kept waiting nearly forty
post es by
theßoyal Duke, who on his arrival took
t
Po, horses, and went on to Newstead Abbey, the sea
iinyal Uolonel Wildman. Although rather lame, his
Highness appeared in excellent health and
ALLtes It is stated the restorations at Ncwstead
end" Y, which have been conducted on the plans and
er the superintendence of Mr. Shaw, the architect
terestantiquary, have rendered it an object of great in-
.
0 Colonel Wildman has spent nearly 200,0001.
a the restoration of this magnificent pile.—Derby
Pape