The Sun.
London, England, 1823-01-27 00:00:00

be regulated 'by the market price of article'. If, therefore,
Treasury bills were formerly drawn upon England ?or two bun-
dred thousand pounds, four hundred thousand will now be re-
quired ; and for every twenty thousand pounds that such a
bank may add to such a currency, she will double the expen-
diture of Government ; and, glutting thutiAhe Sydney market
with an indigestible mass of two hundred thousand pounds
worth of additional Treasury bills, will thereby create a large
fund, out of which she can herself readily draw to meet any run
that may happen to take place for the consolidation of her own
notes.
Supposing the Mint of London was kind enough to furnish
the Bank of England with sovereigns for as many pound-notes
as she chose to carry there, then would that bank be precisely
in the same relation to the Government of the Mother Country,
in which the Bank of this Country has hitherto been to the
Government of the Colony. No restraint would then exist to
an excessive over-issue of paper on the part of the Bank of
England. The check, however, that actually operates is as
follows:—If the Bank over-issue her notes, she raises the price
of every commodity, and of bullion among the rest. For in-
stance, in ithe. year 1814 the Bank rose the price of gold,
by her excessive over-issues of paper, to 31. is. the ounce.
Had the Restriction Act not been in force, she would con-
sequently have been obliged to have purchased with more
than sixty-two of her own one-pound notes every pound
Weight of old she might have required ; which gold, on
being carried to the Mint, could have been coined only into
forty-four guineas and a half, and must have accordingly con-
solidated less than forty-seven of the same notes, if presented
for payment. By any run upon the Bank at this time, the
proprietors would therefore have incurred a runious loss of up.
wads of thirty per cent; and a class of individuals would im.
mediately have arisen, whose sole trade would have consisted
in realising a profit from_ her loss, by purchasing bank notes
with bullion, exchanging those notes for "uineas, melting those
guineas into bullion, and purchasing bank notes again.
Now the Treasury bills here perform exactly the same func-
tion with respect to our paper currency, as the legal coin in
England. If, therefore, the Bank in this Colony be obliged to'
suffer in its purchase of those bills, by the high price to which
silver may attain in consequence of her over issues—then, and
then only, shall we possess a guarantee against the excess of
her paper ever becoming injurious to the best interests of the
country,
I cannot here forbear to express my surprise at the want of
information which seems to exist with respect to that invalu-
able coin, which has for centuries been disseminating its bene-
fits over every other portion of the earth--a want of informa-
tion evidenced in the " embarrassing and • ruinous conse.
quences" which you, without hesitation, predict as likely to re-
sult from the system lately adopted by the Commhotariat, of pay-
ing for the supplies required by Government in Spanish dol.
lars ;—a coin, which, from the extension of its circulation
over every part of the commercial globe, may justly be defined
the money of the world. Like the air which we breathe, un-
limited in the extent of the blessings which it showers over all
mankind; like the ocean that surrounds our continent, a grand
circulating medium assisting io waft to every part of the world
the various products of her deversified climates. Driven, in-
deed, from the United Kingdom by her monies of sterling de-
nomination, it still however maintains all its pre-eminence in
every one of her colonies. Confined in its advantages to no
faith, kindred, or Government, I refer you for an antidote to
your dismal apprehensions of its ruinous consequences here,
to those sterling benefits it has for ages been bestowing on the
British and Protestant North American Colonies ; on the
French and Papal Canadas ; on 2,llahomedan India ; and, on
the whole world. And, while reading the history of the pros.
perity of those places, in the history of the introduction of that
coin 7 pause an instant while you turn •to contemplate the ad-
versity that has ever been attendant on a ruinous over-issue
Of raper.
kor, Gentlemen, it ought to be retnembered, that the injury,
formerly effected by diminishing the quantity of bullion con-
tained in money of the same denomination, is now perpetrated
to a more ruinous extent by the depreciation of paper. The
standard of a currency is as effectually degraded by a body of
bankers over-issuing paper, as by a Government debasing the
coin. .4 hank note, which will purchase sixteen shillings
worth of silver only, but which is forced on the public at
twenty, is a circulating medium fully as pernicious as a guinea
which is ordered by eaavernment to pass for six and twenty
shillings. If, therefdre, our Bank, by their over issue of paper,
make the dollar, which is elsewhere current for four shillings and
twopence, passitere for five shillings (a supposition well known
to he in perfect'accordance with fact), that they virtually de-
grade our standard I must ever maintain :—and I insist the
more pointedly on this, because I observe, in two parts of your
Address, that the dollars, lately introduced by the Commis-
sariat, are termed a depreciated currency !—And, truly,
they have been depreciated ; but it is only by the over-issue of
paper.
The high
.price of bullion, in any country, is a proof
of the over-issue of its paper. The whole history of the
Bank of England, since the Restriction Act, sufficiently
shows it. Till the year 1799 (being two years only after
the Bank of England had suspended its casts payments),
the market price of silver was about tive shillings and
a penny per ounce, and the notes in circulation, at
that time, amounted to ten millions. In the year 1012, the
Bank circulation amounted to twenty-five millions, and in this
year the ounce of silver was six shillings and sixpence. Know-
mg, then, that the Sydney Bank Directors, in the exercise of
the power of trading in bullion conferred on them by their char-
ter, purchased, until very lately, always at five shillings, that
same Spanish dollar, which in payment for the English pound
note, is exchanging for four shillings and two-penee,—this fact
must speak for itself. The Sydney pound-note, when compared
with the same note of the Bank of England, is under. a depre-
ciation of 20 per cent. An alarming depreciation indeed, con-
sidering that our chartered Company has not yet been esta-
blished much more than five years !
When, therefore, I behold the inhabitants of this Colony,
on the one hand, slumbering in the most perfect indifference_,
whilst the Proprietors of an Institution, of five years growth
only, have already depreciated the incomes of every one of us
!full 20 per cent., and if allowed to pursue an unchecked career,
will render them shortly of no value at all ; whilst I perceive,
on the other; their groundless alarm at the introduction of the
only remedy that this inveterate disease will admit, I cannot
forbear to call to my recollection the inhabitants also of Lima,
who, accustomed from infancy to earthquakes of annual viii.
tation, view, with perfect indifference, these most tremendous
inflictions of Providence ; but no sooner did thunder clap up.
on one occasion, and a few drtnai of rain fall on that terrest-
rial paradise, which is watered only by the dews of Heaven,
than all conditions rushed in an instant to the churches, re-
ceived hasty absolution from the priesthood, and awaited, in
awful expectation, the approaching dissolution of the world.
I know, Gentlemen, that until lately, the effects here of an
over-issue of paper have been neutralised by the effects of a si-
milar over-issue in England. The currencies of both countries,
having been depreciated together, their noses exchanged be-
tween themselves as they ought—to have exchanged--atpar.
By the destruction, however, of 140 banking-houses in Eng-
land, in the year 1014, the tone of her Paper was gradually re-
stored, and all further depreciation prevented by the memora-
ble bill of Mr. Peele. Since which, however, the Government
of this country, continuing notwithstanding to exchange it 9
Treasury bills on a par with Sydney Bank paper has been vir-
tually paying on all importations a bounty of 20 per cent. A.
bounty on importations ! A novel experiment truly, of mei.-
cantile policy, left for this late age, and this young Colony,
first to attempt Toobtain this bounty, however, the men.
chants of the Colony were importing a deluge of British
manufactures; to obtain the same' bounty, the Traders of
India were sending their specie to the market of New
South Wales. Hitherto, the demands for Treasury bills
had not outatepped the wants of the Colonial Govern-
ment. Now, however, the case appeared alterecl. Ever
circumstance scented' to indicate that clernandi for' these billa
would be made on the Commissary to treble the amount of
the wants of his department. Affairs had arrived at a crisis, and
it was necessary to adOpt souse effective measure to stem the
double inundation. It was easy for the merchant importers of
British manufactures to advise me to ruin the hopes of the
many persons, now on their passage with cargoes of dollars,
by refusing them permission to enter into competition with
themselves for the purchase of Treasury Bills. F.qually easy,
no doubt, would it also have been for the India Traders to re-
quest that those same bills might be solely reserved -for their
dollar speculations to the exclusion of all adventurers in British
could never assent
jtoustieceitheervoenf thesMajesty's COlonial Government, however,
betwe
eepnnamtain
sivectiotinttionlts,mausnat
nhioalndutfialectiu)arleasnice—hoti,s
y o
the same
e receive t e m
weetnah,pte
weapon,
dispose of the so eagerly sought Treasury Bill only to the
highest bidder. Very sorry would I, for my own part, be to
make use of so dangerous a weapon to paralyse the Freedom of
Commerce as
instrumentaanfet ihr°ki dyi: e rois seerstiruei
ids o Merchants,
anxioustheape
and Free Colonists of New South Wales, now offer to my ac-
to place in my hands, what security could I afterwards offer to
Wthater e
cyeoputnaneclve.o.
culatioas of the merchant importers of dollars, would riot, with
equal success, be diverted against the fortunes, Gentlemen of
you, the authors and advisers of the short-sighted measure. If,
then, by any purchases, which the Commissary may be autho-
rised to make on the principle of free
competition, your proper.
ties be really depreciated, as ou state in your Address full 20
per cent.; however sincerely must lament the " d
that this will occasion, cannot be diverted from ntment
verted from the plan I
sin at present pursuing, for the purpose of continuing to your
speculation a monopoly of treasury bills, which has raised thus
much above the level of its natural •raps ,
price, every article formerly
purchased by Government,
• Gentlemen—ln conclusion, I
cannot too publicly express the
satisfaction I experience from
the pleasure of meeting the Land.