The Sun.
London, England, 1858-09-06 00:00:00

THE CURRENCY QUESTION.

(From the Money Bag.)
We quote the following remarks on the currency
question from this clever and spirited exponent of
broad and liberal principles :

We all know how fluctuating the moneyed denomination
of gold has been. In 1832, 300 grains of gold bore the
moneyed denomination of a pound. ; in 1466, 240 grains
was called a pound ; in 1552, 174 grains ; in 1650, 140
grains ; in 1750, 129 grains ; and now 123 grains of gold
are stamped as a pound. These alterations were just and
reasonable ' - for As-the commerce of the world extended, and
the quantity of other commodities largely increased, the
purchasing power of gold increased. The same quantity of
gold would command a greater portion of other commo-
dities. In order, therefore, that the debtor or the tax-
payer Might not give more than was just, the weight of the
legal pound was diminished.
The bullionist party deny that Government ought to pro-
vide legal tender paper money receivable for taxes, in which
paper gold (like any other commodity) might find its mar-
ket price. The currency reformers say that Government
ought to do so. And they say, moreover, that from 1797
to 1819, when the Government did provide legal tender
paper money, the purchasing power of the pound—which
is the really important element of money—was subject to
fewer and less violent functions than at present, that the
rate of interest was more equable, and that periodical panics,
with all their attendant and disastrous evils, were unknown.

The bullionist party in grasping at the shadow of stability
in money matters have lost the substance. They have
enacted that a pound shall always be exactly 123 grains of
gold. The working of their system has been this. After
a panic or monetary crisis, when all commodities have been
depreciated in moneyed value our merchants have been
forced to export largely, and foreign nations have given
up a little gold for a considerable portion of goods. • Gold
has then flowed into the country. This gold, stamped at
the mint, or taken to the Bank for its more convenient
paper representative, the bank-note, has accumulated.
Money has then become very plentiful, and therefore the
use or interest of it very low. Every kind of enterprise
has been stimulated by cheap money, and the continuance
of this cheapness has caused enterprise to degenerate into
speculation. Prices have risen. It has thus becothe pro-
fitable to withdraw our gold to purchase commodities in
cheaper markets. The circulating paper medium being
then necessarily withdrawn money becomes scarce, and the
use or interest of it high. The scarcity and dearness of
money both press upon the springs of productive industry,
the price of all commodities declines, alarm extends, panic
ensues, the convertibility of the note becomes a transparent
fiction, and on the eve of a state of barter, the Act. which
causes all this evil is abrogated.
Had we " inconvertible paper money to the amount of
£20,000,000, which experience has proved to be necessary
for our domestic circulation, it appears highlyprobable that
the difference between the paper pound and the gold pound
would be so small, so fractional, that it would be merely a
matter of accurate calculation with bullion merchants. As
soon as any appearance of a rise in the price of bullion
occurred, bullion imports would restore the equilibrium,
and the national paper money and the sovereign would be
at par. But supposing, from the enormous discoveries of
gold for instance, the price of gold should decline through-
out the world—for that is the tendency which monetary
affairs are now taking—no evil would result. It
would be long before any considerable depreciation of
gold would take place. The national pound note
might indeed become worth a sovereign, and a
few pence more. As time wore on the depreciation of gold
might increase. But the expanding commerce of the world
would long absorb great quantities of the precious metal.
Contracts of every kind would adjust themselves to the
rise in prices. And freed from panics and monetary crises,
this country would pursue without interruption its path of
commercial prosperity.