The Sun.
London, England, 1860-12-08 00:00:00

TO THE EDITOR OF THE SUN.

Sint,—Another artificial monetary pressure in the face of
abundance of money, and possibly another monetary panic,
is at hand ; which will yield a rich harvest to the owner of
money, but great loss to the owners of all other kinds of
property, and to the sons of labour.

When will our landowners, merchants, manufacturers,
and operatives awaken to the direful action on their interests
of our monetary laws, and especially of the Act of 1844 ?
Let them look upon money of all kinds, from cowrie
shells to bank notes and sovereigns, simply as " a security
for the transfer of capital, and regard it as perfectly dis-
tinet from capital, insomuch as money of itself cannot add
to products of the world, whilst capital can. Money, so
long as it is retained as money, and not exchanged for capi-
tal, cannot increase wealth, for although one person receives
interest for its use, another person pays it, and the general
wealth remains the same.

Let them consider further, that the true meaning of
raising the rate of discount is the stoppage of trade, the
interchange of their respective commodities by making
mo,ney, the instrument for carrying on trade, dearer; that
the effect is precisely the same as when the directors of a
railway by raising their fares and rates diminish traffic.
To restrict the supply of money—of "perfectly seund secu-
rities for the transfer of equivalent values of capital," is
surely as absurd as it would be to limit the number of trucks
and carriages on a railway. Should not the sound rule be,
to take care of the quality of the circulating medium and
leave the quantity to take care of itself.
On this principle the business of the Bank of England
was conducted prior to the Act of 1844, the directors being
subject to no other restriction than that which their liability
to pay their notes in gold on demand imposed on their dis-
cretion.

The market rate of discount then depended upon the
demand and supply of the various kinds of ready money,
viz., deposit money, Bank notes, and gold, but since the
Act of 1844, therate depends on the demand and supply of
gold alone ; as the notes of the Bank of England are made
to increase and decrease with the gold in the issue depart-
ment of the Bank of England, and their amount governs
the Bank rate of discount, and the 'Bank rate regulates the
market rate.

For 140 years previous to the Act of 1844, the
rate of discount of the Bank of England never
fell below 4 per cent., nor exceeded 5 per cent.,
excepting for a few months in 1839, whilst, since the act,
the fluctuations have been incessant and often violent,
ranging from to 2 to 10 per cent. ; from the Bth to the 15th
of November last the variation was from 4 to 6 per cent.,
a rise 4.50 per cent. in eight days.

And into whose pockets does the extra rate go, and from
whom is it taken ? Is it not transferred from landowners,
merchants, and manufacturers, to bankers, money-dealers,
and depositors ; from productive to non-productive classes;
for although bankers are most valuable and essential in
providing money, the means of obtaining capital and car-
rying on production, they do not themselves produce any-
thing.

Whence comes it that these powerful bodies of land -
owners, merchants, manufacturers, and operatives so tamely
submit to the gross injustice of our monetary laws; and
more especially how comes it that Chambers of Com-
merce, the appointed guardians of the interests of the com-
mercial community, are so supine on the subject ? Is it
that the members are so much engrossed with buying cheap
and selling dear that they neglect the due consideration of
the laws which so often upset their calculations ; or is it
that they are so little acquainted with the science of money,
the most important branch of political economy, that they
shun the discussion of the currency ? Or is it, that the
majority of the members are under such obligations to their
bankers that they dare not protest against the monopoly
in the manufacture of bank-note money which their
bankers possess, that as borrowers they 'cannot well con-
tend with lenders ?

Are they not aware that as the value of money rises, the
value of their property (capital) falls, and that all fluc-
tuations in the value of money, not proceeding from the
natural law of demand and supply, but artificially created
by unsound laws, are most prejudicial to their interests ?
Are they insensible to the fact that our laws by restrict-
ing the supply of money make it dearer to them than to
their foreign competitors, that the difference to their dis-
advantage with France was lately If per cent., the rate of
the Bank of France being 41 per cent. and of the Bank of
England 6 per cent., and that at the same time the market
rate of discount in Brussels was 3 per cent., and at Ham-
burg only 2f per cent.
If these influential classes will not bestir themselves to
obtain emancipation from the thraldom of the monied inte-
rest, how can we expect that any Government, unsupported
by public opinion, will undertake the task.
The monied interest in the House of Commons is more
powerful than the landed interest ; from the latter we did
obtain the abolition of the monopoly which the Corn-laws
gave them, but the monopoly still remains which the
Money Laws create—a reproach to all Freetraders. It is
strange, but true, that no deference is paid in the House of
Commons to the opinion of a member on the subject of
money unless he be a banker, the party most interested,
and that the more money he possesses the more sound and
disinterested his opinion is considered to be; in the Com-
mittee on the Bank Acts, the evidence of Lord Overstone,
a millionaire, was preferred to that of 3. S. Mill, Esq., the
first political economist of the age.
What Ministers, be they Whig or Tory, dare go down
to the House of Commons and grapple with the over-
whelming influence of the Bank of England and monied
interest there, by proposing that the powers of issuing up-
wards of £30,000,000 of Bank-notes, given by the Act of
1844 to certain privileged bankers, should be taken from
thsm, and transferred to a National Bank of Issue for the
good of the nation ?
Were a national Bank of Issue now in action, where all
could have legal tender notes payable in gold upon demand,
on depositing one-third of the amount in gold, and two-thirds
in Government securities, these drains of gold to France
and America would be comparatively little felt ; the value
of gold would rise naturally, according to the law of supply
and demand, and the rate of discount would be raised pro-
portionately, but there would be no diminution of our
domestic currency, nor apprehension of a deficiency of
legal tender money, the real cause of monetary panics;
both of which evils are created by the Act of 1844.
Verily we are the slaves of the monied interest, and
with little chance of emancipation, unless bankers are
high-minded and patriotic enough, and many are, to
prefer their country's good to their individual advantage,
and will themselves move for an amendment of our
Monetary Laws ; or, a third dreadful monetary panic be
inflicted upon us, as in 1847 and 1857.
These convulsions are the certain results of the conflict-
ing principles at work, of Free-trade in commodities and
restrictions on the quantity of money requisite to pay for
them. Nature's offended laws will eventually vindicate
themselves.

I am, Sir,
Your obedient servant,
HAMER STANSFELD.
The Grange, Burley, near Otloy,
6th December, 1860.

P.S. Were the public aware that the writer of the City
Money Article in the Times is the Secretary of the Treasury
Committee of the Bank of England, the giant monopolist,
they might account in some degree for the support given
to the Act of 1841 by the leading journal.