The Sun.
London, England, 1823-01-28 00:00:00

FOR THE S.U.

ON THE METALLIC AND PAPER CURRENCY.
TO E. SCILLY, ESQ. CURZON..STREET.
SIR--I was very much gratified by the letter,
&c. which you directed to the Right Honourable
ROBERT PEEL in the Morning Clownicle, on
Friday, August 16, 1822; and coinciding with
you, as I do generally on the several subjects on
which you have dwelt, I should not have taken
the liberty of thus addressing youldid I not differ
with you 'on the result of your argument, by
which you disapprove of restoring the metallic
currency ;—recommend the total abandonment
of it ;—and adopt in its stead " the plan ofiMr.
RICARDO, OP OBLIGING TUE BANK TO PAY THEIR'
46 NOTES ON DEMAND IN BULLION BARS."
I will*, Sir, rowlocks the observations I have to
make on this subject, as much as I am able ; and
requesting your candid indulgence, if I have
fallen into any essential error, will thank you to
take the trouble to make such amendments upon
the following opinions as your view of the sub-
ject may suggest.
.Lhave delayed the, observations I had to
make that I might draw your attention to' them,
as well as that of the public, as nearly to the
meeting of Parliament as convenient, allowing
time for the discussion of a matter so highly im-
portant.

I do not perceive what essential difference
there is between paying the value of paper with
gold in the shape of bars, and' in that of coin,
except its partiality; in, the case of coin the
whole public is accommodated, and in that of
bars a few persons only would be so. The de-
mand for .either bars or sovereigns can only be
in the degree in which business is brisk or other-
mise ; in a small or in a torpid community, the
circulation of both will not be very active, but
in Such au one as that of London, the sove-
reigns will change owners every few minutes ;
and the bars, only because they are more vain-
able,, not so often. But bars and sovereigns,
shillings and half-pence, are nothing,more• thou
the change (the break-pieces), the lesser for the
greater; in which capacity the ono or ONE 'mon-
SAND pound noteolsoequ,ally,oomes in for its place
according to its estimated value. But still, not!.
withstanding this similarity, there isnri essential
difference betwen pope': and metal; paper, as a
currency, possesses no commercial value, metal
a very considerable. one ; and therefore metal
being liable to be withdrawn upon every rise of
the market, is of inferior value us a national
currency when compared, with gaper; which,
possessing no intrinsic value, is nut liable to that
inconveniency.
‘Vheo we talk of currency, we are supposed
to comprehend under that idea every thing which
Operates as a general medium for universal ex-
change, as a contrary distinction to the meaning
of the word barter, by which we usually under,.
stand the very circumscribed operation of ex.
chauging a single article of merchandise of limit-
ed utility, for another that is 'quite or nearly
equally so. If this definition •is correct, Bank
of England notes ;—noieg of other chartered
banks ;—.country bank notes;—inland bills of
exchange ;—foreign billsk—exchequer bills ;
in short every other species of obligation, whose
meaning expressed in writing, promises to pay a
certain sum in pounds, shillings, and pence, is as
much a currency of money, as sovereigns, *shil.,
lino, and half-pence are ; and paper money, if.
responsibly backet4 that possessing validity.. of
payment to the amount of its expression, comprises
the superior advantages over metallic money, of
bearing interest if we chuse it should do so ;
lesing nothing by ,wear ;—and of
,being so very
portable, that millions of pounds are as conveni-
ently conveyed and trimsferred, without counting,
as a single pound in metal, whose inconveniency
is so great, that it is estimated that all the popula-
tion of London would not be sufficient to count in
metal, the daily traffic of that city ; nor-would
all the carts and waggons of that Metropolis be
able to
.convey in metal the exchanges Made in
the feur-aud-twenty -hours from the persons who
pay, to those who receive them.
I 'atn, therefore, of opinion, that the idea con-
veyed by the word moncy, is much more unalter-
able, or less mutable, when expressed on paper,
than when it is expressed on metal. I haVe
myself, in foreign countries, for 'the - convent-
ency of carriage, given a larger expressed
amount of gold, for a lesser expressed amount
of paper :—and was 'once under such cir-
cumstances that I must have left the metal
behind, if I could not have procured paper, and
probably should never have- seen it more. In
my then exigencies, gold was of no More use to
me than it was to Alexander's horses.- During
the war of the French Revolution, on the Other
hand, the bills of the accredited Agouti of the
,British Government, in all foreign countries,
from 1807 to 1812, were generally at a discount
of 18, and even 9,2 per cent.; and on the Penin-
snits of Spain, I believe, 26 per cent.; not, hose:.
ever, so much in opposition to gold and silver, zs
to provisions ; for the British armies were, like
that of Macedon, distressed for food ;--and when
the Americans, as neutrals supplied their neces-
sities, they took our bills at the market price,
which, from a variety of causes, easily accounted
for, end those independent-of 'the scarcity of
coin, then happened to be in favour of the metals.
But in the Mercurio Peruano it is related, that
on the occasion of a breach of one of the Gorda.;
leras of the Andes, so large a vein of pure silver
was once displayed, that the price of that metal
fell -at Lima to nearly one half its former
value. In these several cases, and in which of
them more than in the other, I would ask, did
the value of money say money without refer.

TRICE SEVENP.ENCL

dice to either paper or coin exclusively), rise or
fall

The metallic currency now in circulation, bears
a proportion to the above enumeration of paper
currency (viz. Bank notes, Sic.) so very' small,
that its amount, in real effect, independent of its
quality as break-pieces, 'cannot possibly proauce
any essential consequence upon the affairs of this
nation, so superior as it is in commerce to the
other communities of Europe using metal only :
in fact, as is hinted above, the coin now hi cir-
culation in this kinfdorn is.merely large and small
change, which passing' thrbugh hint:mei:lWe dif-
ferent hands every day, assists in ,giving circula-
tion to those individual pieces of currency, paper
or metal, that are of bigher value; and were It
not that piecep
_of paper currency are most liable
to he forged ills proportion as they are of smaller
expressed value, there can be no doubt, that pa-
per shillings, &c. would answer the same pur-
pose as those do which are made of metal.
I believe, then, that. experience will at length
oblige the world to confess, after interest and pre-
judice have had their play, that metal of any sort,
as a medium of exchange, though necessary, is
of very limited consequence when compared
with its ally, paper; and that' if the Par-
liament is firm, the dispute will end, as that
of the beginning of the cenfury:did, in the asto-
nishment of the disputants, that there could be
found persons so ignorant and So idle as to keep
up the ball on a subject whose ri,erits and deme-
rits were so obvious to every pelun of mathe-
matical understanding.
The subject of forgery, also touched uponLSir,
in your letter, is one of very great importance,;
but the remedy though simple in itself, is ren-
dered difficult by the interests of various kinds
that bring emolument to those who have the ma-
nagement. We ought to resort to the old prac-
tice, never to issue notes of a less value at least
than ten pounds, but not less than twenty would
be better.; and, by some means or other, render
it expedient/hut all persons should book the dates)
—the numbers,—and the names of those from
whom they receive,--and to whom they paN (hem.
In regard to the -coin, it should be sunk by
means of alloy to a certain degree below'its esti.
mated value, suppose 24- per cent.; and that
amount should be expended in rendering the
coinage like unto a medal,- inimitable by any
means of inferior expence :--the old practice of
weighing and gageirig may also be resorted to
if necessary, as I believe it would riot be. But
if the Bank of England, as you very justly ob.
serve, by the issue of their small notes, and by
being permitted to reap such enormous profits
as it has done tiering the last 25 years, is suffered
to controul this important article of public econos
my, forgery will continue in practice;---and. I
may also add, that if the IVlint'continues to issue
coin bearing such coarse impressions as are at this
time in circulation, and so calculated in regard
to value as to give a profit to coiners, exporters,
and melters, we never shall possess any stability
in our metallic circulating medium ;—The con-
tinuance of both the evils will prove the means
of prolonging disputes upon a subject which no-
thing belt avarice could have rendered per-
plexed ; and in addition to the'pecuniary evil,
the lives of many desperate wretches will con-
thole to be sacrificed to no good purpose what.
3
ever. I am, Sir your very bumble Servant.
SENEX.