The Sun.
London, England, 1856-01-08 00:00:00

THE BANK CHARTER AND THE

CUR tiBNCY.

Mr. Goddard has addressed a letter to the Right
Hon. the Chancellor of the Exchequer, of which
the following is a copy :

- -
Sir,—l had the honour a few months since to petition
the Right Hon. Lord Palmerston on the subject of the
Bank Charter. The object of the petition was to show
that the vacuum caused by the withdrawal of bank•notes
from circulation should be filled as pointed out in the
bill of 1844, and that, in accordance with the doctrines
upon which that bill was based, the Bank of England
should be permitted to increase its issues on a deposit
of Government Securities, commensurate with the in-
crease in the requirements of the Government and the
people, since the passing of the Act.
The first measure has been carried into effect, and it
is understood that the second has been under the con-
sideration,of the Government.

I neveifor one moment considered that the adoption
of those measures would place the circulating medium
upon a permanent footing. My arguments simply went
to show that they were necessary to the integrity of the
bill of 1844. On the contrary, I consider the authors
of that bill framed it upon erroneous data.. They as-
sumed as the groundwork of the bill, and the grand
basis upon which it was founded, Ist, That the liability
of money composed of gold and silver, to vary in amount
from time to time, was a valuable characteristic. 2d,
That this characteristic should be maintained in a mixed
money of gold, silver, and paper ; and 3dly, That mak-
ing the paper payable in gold on demand would preserve
this characteristic, and that this mixed. money would
vary in value and amount, precisely as the gold and
silver money would vary without the addition of the
Now, IE6 liability of gold and silver money to vary
in amount, and consequently in exchangeable value,
through being melted, hoarded, exported, imported, or
through an increase or decrease from the mines, instead
of being a valuable characteristic, and worthy of imita-
tion, is a very great defect, and arises from those metals
possessing the two-fold characters of money and merchan-
dise ; and, secondly, the value of money composed of
gold and silver and paper payable in gold on demand,
does not and will not vary either in value or amount, as
money composed cf gold and silver only would do. lam
ready to maintain the correctness of these assertions,
and will do so triumphantly, against all the arguments
that can be brought against them.
With these preliminary remarks, the object of this
communication is to propose a plan whereby the circu-
lating medium can be put upon a sound footing, end at
the same time sleet the requirements of the Govern-
ment and of the people. lam not so sanguine as to
suppose that any perfect system of money can be do
vised at the present time, nor that the community is
prepared to accept of a perfect system could it be
devised. The science of money is unquestionably but
very imperfectly understood, and a people appear to be
incapable of accepting and acting upon a truth much in
advance of their own enlightenment on the subject to
which it refers. My plan is as follows, viz. :--
lst.—The private and joint-stock banks to be con-
tinued on their present footir,g, permitting them, how-
ever, to increase their issues on depositing in the hands
of commissioners Government securities to three-fifths of
the amount, and gold bullion to two-fifths of the amount
of such increased issues.
2d.—The law relating to the establishments of Banks
to be amended, divesting it of its impracticable clauses,
and allowing them to issue notes upon depositing Go-
vernment Securities to three-fifths of the amount, and
gold bullion to two-fifths of the amount of such issues as
aforesaid. The notes of all private and Joint-Stock
Banks to he payable, as at the present time, in gold or
Bank of England notes, at the option of the payer, on
demand.
31—The Bank of England to deposit under lock and
key, in charge of Commissioners appointed by Parlia-
ment for that purpose (the Lord Chancellor, and the
Governor of the Bank of England being of the number),
eighteen millions in Government Securities and twelve
millions in gold bullion, and to be permitted to issue
thirty millions of Bank-notes, and these notes, in con-
sideration of the security so deposited, to be a legal
tenthr so long as the said securities are held by the said
Commissioners.
4th.—The mint to be open for coining gold at the
present price and standard, and the gold coin to con-
tinue to be a legal tender ; and further, lest in time of
war, or of great national exigencies, the gold coin
should in some way be taken from circulation to an
inconvenient extent ; it should be the duty of the afore-
said Commissioners, or of some others appointed by
Parliament for the purpose, to ascertain from time to
time the market price of gold, and this price or value to
declaredbe in the Gazette fortnightly,bii
cat
iocommencing
an d duri
on
g the
fortnight succeedingnigth
goldpublication,
coin to pass at and to be a legal
the
Monday,h
the
tender at the price so declared, whether 205., 20s. 3d.,
20s. GJ., &c., to the sovereign ; but never under 20s. to
the sovereign.
This plan would involve no mechanical or organic
change. It may be adopted without any trouble or ex-
pense to any one, worth considering. It would give to
the circulating medium all desirable security. The action
upon the gold coin would be an unerring index to the
state of the import trade, and would tend continuously
to keep it in a sound state ; a result which the authors
of the bills of 1819 and 1844 have in vain attempted to
obtain. it would give full employment to labour ; per-
manent prosperity to the agricultural and to all the other
great interests of the nation ; and the country would be
carried through the war, or through any war waged in
defence of the rights of the nation triumphantly.
I have the honour to remain, Sir, your most obedient
servant, SAMUEL A. GODDARD.
To the Right lion. G. Cornewall Lewis,
Chancellor of the Exchequer.
-1
A