The Sun.
London, England, 1859-03-18 00:00:00

THE SUN, LONDON, FRIDAY EVENING, MARCH 18, 1859.

rose to four times their former amount, and a vast
impulse was given to industry. The wages of
labour, and the price of industry rose at the same
time, and debts were rendered so easy as to amount
comparatively to nothing. The United States of
America were saved during the war with England
by the issue of a currency bearing a forced circula-
tion. The greatest republic of modern, like the
greatest of ancient days, owed its existence in the
last extremity to the same sovereign remedy.
Then, come to our own times, to 1792, when, as
you all know, the French issued a paper currency,
having a forced circulation. It was that that fitted
out the immense armies that enabled France to
conquer all the monarchs of Continental Europe.
England followed the example. In 1797, Pitt
passed an act suspending cash payments by the
Bank of England, and it was that increase of cur-
rency which enabled us to carry on the war with
France, and brought us through that terrible
struggle. Our allies followed the example, and in
liil3 they issued paper currency guaranteed by the
sovereigns of Russia, Prussia, Austria, and Great
Britain ; and that bought all the stores for the
armies, paid all the troops, and passed without ob-
jection, and without the least depreciation,
from Kamschatka to the Seine. So power-
ful is a paper currency, when issued in a
wise way, that the little country of Hun-
gary, when engaged in a contest with the power
of Austria, issued a paper currency of 14 millions
sterling, which enabled them to maintain the
armies that maintained an equal contest with Aus-
tria, and, but for Russian intervention, would have
rendered Hungary independent. (Cheers.) Thus
you see how many nations have been saved from
ruin by a paper currency, and to many empires it
has given the fruits of conquest. But there are
dangers equally great on the other side; a paper
currency is to 'nations the elixir of life ; but, taken
in undue quantities, an elixir will destroy as well
as save. France furnishes one remarkable ex-
ample of that. I have told you that France issud
bank notes with a forced circulation, which every
one was forced to take. They were transported if
they did not take them. The necessities and pro-
digality of France were such that whereas when
they began this system, their currency was about
60,000,0001., they Issued paper aftci paper WI it
reached the enormous amount of 750,000,0001. ster-
ling. You may easily conceive what effect that
had on the state of the country. It altered prices
so much that at a later period of time it was com-
mon to say that a breakfast for six persons cost
one Louis d'Or, or 28,000 francs in paper, which
was the same as to say a pound in gold, or 1,200 in
bank notes. The result was utter confusion in
regard to the value of property, and debtors who
could only lay hold of a few guineas, by theft or
otherwise, were able to discharge debt to an inde-
finite amount. The consequence was the subsequent
misfortunes of France, her inability to raise up a
free government, and her present subjection under
a despotism as powerful as that of Louis XIV. In
Great Britain the effects were not so disastrous, but
effects, nevertheless, did take place which we still
labour under, and which I will show you are the
main cause of the extraordinary contradiction be-
tween the two sets of facts I have laid before you.
The circulation of Bank of England notes rose from
11,000,0001. at the beginning of the war, to
45,000,0001. at the close of the war. All the other
banks increased their circulation in the same pro-
portion, and in 1815 the circulation was 60,000,0001.
That was a much greater quantity than was required
for the circulation of the country at that time, and
nearly double what the country has now. And
what was the effect of that ? Prices of everything
immediately rose. I will explain shortly how it is
that a plentiful currency raises prices ; but in the
meantime I say that in the year 1815 and preceding
years, prices had undergone such a change that the
national debt was raised to 800,000,0001., being at
least 300,000,0001. more than it would have been if
the currency had not been so much expanded under
the pressure of necessity. Had it not been for the
change in the prices of everything, the nation would
not have needed to borrow more than 300,000,000/.
subsequent to 1797. But the money was borrowed
at a time when we were obliged to borrow 500 in-
stead of 300, in consequence of the change in the
value of money. Private debtors borrowed in the
same way, and so 500,000,0001. of private debt were
borrowed. in England which would not have been
borrowed had prices remained as they were. Rents
were tripled in value, and all other articles in pro-
portion, and the parties borrowed in the expecta-
tion that they would not fall. But it may be said
that if everything increased alike in value there
would be more money to pay for everything, and
we would just be where we were. But alas ! we
have contracted our currency since 1819, and so,
while, during the war, we borrowed 60 per cent.
more than we would have done under a contracted
currency, we have now, by contracting the currency,
contracted the resources of the people that have to
pay for it, and that in a still greater proportion.
The 'lutes in circulation in the whole empire in
1814 were 59,000,000/. ; in 1618, 58,325,000/. ; in
1823, only 36,283,0001.; in 1847, 37,300,000/. • in
1849, only 33,130,000/. ! The average paper under
discount of the Bank of England was in 1810,
20,070,000/. ; in 1823, 3,853,000/. ; in 1840,
7,280,000/. ; in 1847, 20,710,000/. ; in Nov., 1849,
only 9,810,000/. ; in Oct., 1855, 19,240,000/. ! What
have been the effects upon capital, and industry,
and wages of these astonishing fluctuations in the
supply of money ? The result has been a constant
fall of prices from 1819 to 1851, attended with vast
profit to the monied, and utter ruin to the working
classes. The consequence is that the riches of the
country accumulate in the hands of the money-
lenders, the currency laws having made a man with
100,0001. worth 200,0001. That is the reason why
the nation is not able to make her armies adequate
to her strength ; the whole wealth of the country
has run into the hands of the monied class, and the
whole burden of that wealth has fallen upon the
working classes. (Cheers.) Now I must, in order
to let you fully understand this point, request your
close attention to what lam now going to say. I
am now going to touch upon a point which has
been, as mathematicians would say, the asses'
bridge to the whole community. Most people never
have been able to get over it; and ninety-nine
people out of every hundred to whom this propo-
sition is stated turn away, and say they don't
understand it. And yet it is a point upon which
their own fortunes depend. The proposition that
I have to state to you is very simple. It lies at the
foundation of the whole question of the currency ;
and if you once get hold of this proposition, and.
master it, the whole thing will follow as a matter
of course, and you will at once be able to under-
stand how all the effects I have mentioned have
come to pass. You know that everything
that is plentiful becomes cheap. If bread is
plentiful it becomes cheap ; if oatmeal is plentiful
it becomes cheap ; if beef is plentiful it becomes
cheap. There is no division of opinion as to that.
But, then, there comes the next thing: money is
an article of commerce, as well as bread, oatmeal, or
beef. If money is plentiful, money becomes cheap,
for the same reason that if beef is plentiful beef
becomes cheap. But, observe the effect of money
becoming cheap : it is, that everythinglelse as mea-
sured in money becomes dear. For example, if the
price of a boll of oatmeal is 205., and if the shillings
in the country are increased in number one-half,
then the man with the oatmeal says to you, " Oh,
money is plentiful just now; I won't let you have
my oatmeal for 20s. now; you must give me 305."
And, then, you have got so much money that you
are quite willing to pay the 30s. In short, the
effect of what I have stated is that prices inevitably
rise as soon as money—that is the currency—be-
comes plentiful. When money is withdrawn, when
the currency is contracted, when the gold goes
away, the prices fall. If the money is taken away,
then it becomes more valuable. And what is the
meaning of the money becoming more valuable ?
It is just this, that an article will be got for a less
amount of money—that is prices fall, and with
them the wages of labour come down. Therefore,
just fix these two principles in your minds, and
you will at once see the key to all the extraordi-
nary effects I have mentioned ;—that the increase
of the currency, whether in gold or in paper raises
prices,
and the contraction or withdrawal of the
currency, whether in gold or in paper, lowers
prices. Attend to the effect of that, and you will
perceive how it is that the currency is such a vital
thing to profits, to trade, and to tie wages of labour.
By increasing the currency, speculation immediately
rises, great profits are made wages are increased,
universal prosperity prevails. Take away the cur -
rency, withdraw the gold and the silver, and the
notes. and everything falls in price—down comes
the profit ; everybody that has commodities finds
that every day they get cheaper. The grazier finds
no market for his cattle, the farmer can get no profit
by his grain, and the manufacturer cannot get his
goods sold. In short, the contraction of the cur-
rency leads all classes to misery ; the increase of
the currency makes all classes prosperous. But it
won't go on for ever. If you increase the currency
too
rnuch, after the manner of the French with their
assigna ts, the whole good will be destroyed ; but if
you wisely do it in moderation, an increase of the
rr
ccyionnecoefstsharie leyarmreankeys
npeecoeps!are
ihiyapmpyak,
ewshtihleema
ccounteran
t
miserable. (Applause.) c I have' told you of the
state
which in 1815 had risen to 47
millionsio
manadttaershaiint
97;
-whi
when the paper acquired
a forced circulation,l7llBl9, cash payments were
reverted to. It was then settled that the Bank of
millions
of s
England were to be allowed to issue 14 millions
sterling of notes upon securities, and the, private
banks about 12 millions more on the same basis.
These were issued in paper, without their being
required to retain gold for the amount. But still,
under this system, the currency was rendered per.

fectly dependent loon gold, because there was only
a limited amount if securities on paper, and that
limited amount wa; not one-third of the circulation
required. Well, in .823 a relaxation took place, and.
the Bank of England notes were declared a legal ten-
der at every place sive at the Bank of England. In
1826, small notes wcre abolished in England, which
was a most fatal step, for the whole small circu-
lation was turned into gold, and in 1844 the
present Currency Act was passed. The Currency
Act of 1844, whici was applied to Scotland by
the Act of 1845, wts to this effect :—lt declared
that the Bank of England was to be obliged to
receive all the gold that was brought to its door
from any part of fie world ; and that for every
note issued above X 14,000,000, they must have five
sovereigns in their coffers, which they were forced
to retain in the issue department. Theintention of
the Act was to make the Bank of England the great
emporium of the gsld throughout the world. It
fixed 31. 17s. 10W. as the price of the ounce of
gold, at which it had to take all the gold which was
brought to it. At the same time the other banks in
the empire had a certain amount of notes given them
that they might issue without having sovereigns for
them. That was the immediate change made by the
Act of 1844, and you know what has been the state
of the country sincethat time. It has been this, that
the currency may be said to be almost entirely de-
pendent upon the retention of gold, because the
Bank of England is obliged by the Act to retain as
much gold in their coffers, and not to issue it to the
public, as they have notes out; and in general the
Bank of England his about two millions of notes out.
They must have seven or eight millions in their cof-
fers which they are not allowed to issue in whatever
extremity. The consequence of that is this, that the
Bank of England are under the necessity of con-
tracting their issue whenever the gold in their coffers
approaches even the low level of seven or eight mil-
lions. And why are they obliged to do that ? Be-
cause, whenever they find their gold going down,
they know they are coming to the limit—they know
there will be a great demand upon them by the
country banks, and if they go below eight millions
they are bankrupts, because they cannot go below
that. (Hear, hear.) In order, therefore, to prevent
that calamity, they are übliscd to taho nicaauL CN of
precaution ; and hence they put on the screw the
moment they see the gold descending, and when
other banks see that, they put on the screw also from
the pressure of the same necessity. (A laugh.) I
will now run over the different crises, and show
you how it is that all the crises may be at once ex-
plained, and may be referred to the erroneous cur-
rency system which prevails. There was first of
all the crisis of 1818, which immediately followed
the resumption of cash payments by the Act of that
year, and I crave your attention to the immediate
effect which that had on the exports and imports of
the country. In 1818, before the Act passed, the
exports of the country were 45,000,0001., and the
imports 35,800,000/. In 1819, the year after the
bill passed, the exports were 34,252,0001., and the
imports 29,000,000/. ; so that both the exports and
imports fell off 10,000,0001. the moment the bill
passed. Now, what was the reason of that ? Mr.
Wallace, President of the Board of Trade, said in
the House of Commons (and these are his own
words), that "such was the state of the country,
that it bore all the symptoms of a dying nation."
(Hear, hear.) In 1823, as I have said, the Bank of
England notes were declared legal tenders, except
at the Bank of England itself, and that was an im-
mense relief. There was a great increase of the
paper issue, but soon after that there came a great
drain, in consequence of the South American specu-
lations. The South American mines were opened
at that time, and there was no end of speculation
then, in consequence of which there were 12 mil-
lions of sovereigns drawn out of England to carry
on these South American speculations. The result
of this drain was that the Bank of England were
almost obliged to apply to Government for a suspen-
sion of cash payments, when some clerk bethought
him that there was a box of old notes in the bank.
These notes, to the amount of two millions, were
issued, and saved the country from bankruptcy.
(Applause.) Well, gentlemen, things went on, and
the Americans must have a crusade against the
notes too. In 1835 and 1836 they had an immense
number of banks, which had spread an amount of
prosperity throughout the Union, altogether un-
paralleled in the history of the world—greater even
than any progress made by Britain in the same
time. One-third of the whole number of notes
issued were represented in gold. But they must
needs make a crusade against the banks. It was not
a crusade for money, but a political measure. The
seaboard had become too strong for the small free-
holders in the back provinces, and the cry was, not
as in France, " Down with the aristocracy !" but it
was " Down with the banks !" Under the influence
of this pressure President Jackson and the Congress
passed a bill to this effect, that no payment of taxes
should be received except in gold ; and secondly,
that no payment of tho public landhold should be
received except in gold—in short, they were deter-
mined to revert to a metallic currency. What was
the effect of that upon America and upon England?
The effect upon America was that there was such
an overturning of everything that no less than
nine-tenths of the whole commercial wealth of the
country was destroyed ; and the imports into Ame-
rica from this country, which in 1836 had been 12
millions, sank down in 1837 to four millions. The
effect oithis was an immense drain of gold from
En gland to America to meet this crash—the amount
sent being about 9 or 10 millions. The consequence
of that in England was, that the gold in the Bank
of England was brought down in 1839 to 2,225,0001.
Now, what was the effect of that ? We were saved
from bankruptcy only by a loan of two millions
from the Bank of France. The consequence was a
long period of lassitude, and a great amount of suf-
fering, which continued for about four years—the
longest period of suffering that ever was expe-
rienced. Things, however, got better, and consider-
able relief' was experienced by the railway expen•
diture in 1845-6. In 1846 the free trade system in the
importing of grain was introduced ; and the great
object I have in view is to show you that that
change in our system in regard to grain must be
followed in regard to a change in our currency, if
we are to avoid the continual recurrence every one
or two years, of the disasters that occurred in 1848.
(Cheers.) In 1846 the Irish famine occurred. That
caused a great importation of grain, amounting to
10,000,000 quarters ; before that no more than
2,500,000 had ever been imported in any year. This
grain went far to abate the suffering, but it was al-
most all paid in gold and silver. It was stated in
the House of Commons that there were 33,000,000
stg. paid for foreign grain at that time. I will show
you 'what was the effect of that upon the country.
In 1847 the exports were 58,800,0001., and imports
90,921,0001; in 1848 the exports were 52,800,000/.,
and the imports 93,547,000/. ; in 1849, the exports
were 63,500.000, and the imports, 105,000,000/. Now,
attend to what is the effect of this great balance
of imports over exports ; that is the vital thing you
have to consider. Recollect, lam not complaining
of free trade. I take free trade as the settled, fixed
policy of the country. I argue upon it as such; and
what I say is this, that you must make your cur-
rency laws similar in a certain degree to your corn
laws or the country will be ruined. (Cheers.) In
1849 there was a balance of 40 millions of imports
over exports. The paupers of that year numbered
1,731,000, and the emigrants were 280,000. You
see how close, how immediate have been the bad
effects of this great drain of the precious metals. I
will now give you the counterpart ofall this, which
is, if possible, still more illustrative of my argu-
ment. I need not tell you what was the effect of the
gold discoveries in 1852. I will merely mention
that, in consequence of these discoveries, the an-
nual produce of gold over the whole world, and for
the use of all its inhabitants, was increased from 8
or 9 millions to 36 millions. The gold came in in
such quantities that the paper was issued in similar
quantities, and that is the history of the prosperity
of these times. I will tell you what the state of the
currency was brought to by this great change. In
1846 the gold and silver in the country amounted
to 39 millions, in 1856 they amounted to 69 mil-
lions ; the total currency in metals and paper in
1846 was 79 millions, in 1856 it was 149 millions.
So you see there was an increase in the currencyof
30 millions in consequence of the gold discoveries.'
Here is the history of the resurrection of England
inmillionsand of
in the suppression of the
gold were added to the
currency by the good providence of God, who opened
n dtihae n Crimeanwar-3ow ar
these huge banks of issue in California and Aus-
tralia. And what was the effect of that ? Why, it
was that prosperity again was spread over the land,
not by the wisdom of men, but by the blessing of
God. (Cheers.) That was the occasion of the
immense exports and imports of those years which
I have already read to you. It was that which en-
abled us at once to raise our taxation from 55 mil-
lions which it was before, to 75 millions, just in the
same proportion as the currency was increased,
and without the slightest oppression being felt
by the people. It was that which enabled us to
fit out an army which put a stop to Russian am-
bition on the shores of the Crimea. It was that
which enabled us to increase our Indian army from
29,000—that small driblet which it was in 1851—
to the magnificent army of 100,000 men, who now
assert the power of England on the shores of the
Ganges. (Loud cheers.) It was the good provi-
dence of God that gave us that strength because it
gave us the money, which all the foolishness of
men had not been able to take away. The very
effect, however, of this great prosperity that was
poured upon the country in consequence of the gold
discoveries, was to open up another and equally for-
midable source of evil ; and that is the cause that
produced the crisis of 1857. I will tell you what
that source of evil is. The effect of the present

currency laws making the currency of the country
entirely dependent upon the retention of gold, is
that the moment that the gold begins to leave the
country credit is shaken and everything comes
down. Now, on the other hand, when gold is plen-
tiful prosperity flows in, there is a great increase of
profit, a great rise of wages, and a great increase of
consumption—consumption by the working classes
above all. And that was what took place in 1845
and 1846 during the railway mania, when the im-
portations increased to an enormous degree. I will
show you how true this is. In 1846 the imports
were 75,900,0001. ; the three following years they
were respectively 90, 93, and 105 millions. The
same effect took place to a still greater degree dur-
ing the four years of prosperity from 1852 to 1857,
when, as already stated, the balance of imports over
exports became so prodigious that it amounted to
55,406,0001. in 1854 ; to 47,972,250/. in 1855 ; to
56,764,0001. in 1856 ; and to the enormous sum of
65,000,0001. in 1857. Now, consider what is the
effect of a great excess of importations over expor-
tations. Why, the balance must be paid in gold
and silver ; and that is the fatal circumstance in
our present condition to which I wish to draw
your attention. Under the present law, two or
three years of prosperity are inevitably followed
by disaster, and the reason of that is that the
prosperity raises the wages of labour, increases
the consumption, and thereby increases the impor-
tations to an immense degree. During the last
three years the balance of importations, from 40 to
65 millions a year, had to be paid in cash. I do not
say that there is any loss in sending money out of
the country mild getting in grain ; but what I com-
plain of is this, that you establish a system of cur-
rency which makes the credit of every bank, the
credit of every merchant, the wages of every
labourer, the profit of every shopkeeper in the
country dependent on the retention of gold by the
Bank of England—(hear, hear)—and at the same
time you establish a system which makes that re-
tention perfectly impossible. (Cheers.) I have
shown you what the balanbe is, and I will now tell
you how it happens that the balance in an old
country like this will always be against the rich.
The reason is this ; the rich country brings to the
market a far greater demand for consumption and
a far greater power to purchase than the poor
country. For example, we deal with'Russia to an
immense extent. We import four or five millions
of quarters of grain from the south of Russia or
Poland. Our imports from Russia are eight mil-
lions ; our exports to Russia are 1,500,000. Why is
that ? Because Russia is a poor country, and is
not able to buy our manufactures, while England is
a rich country, and able to buy its grain to an in-
definite extent. Look at India. Colonel Sykes,
the late chairman of the East India Company, told
us lately in the House of Commons, that last year
our exports to India were 12 millions, and our im-
ports from India were 23 millions, the 11 millions
of balance being paid in cash. Now what is the
reason that they will not take our produce, while
they take our gold to any extent ? The reason is
this :—ln India we have 181 millions of subjects,
and they have only 370,0001. paper currency among
them. The paper does not go beyond Bombay,
Calcutta, and other great towns ; the rest of the
population have no currency at all, except gold
and silver, and from the unsettled state of the
country, the tyranny to which they are subjected,
and to constant wars, the great wealth of the coun-
try is turned into gold and silver ornaments for
the persons of the people. There is the history of
the absorption of the ,recious metals in India, and
that shows you the great importance of attending
to the currency now that we have entered into a
closer connexion with that country. By uniting with
India we have got 100 millions added to the na-
tional debt, and in addition to that we have got a
province to our empire, which will annually
absorb from 20 to 30 millions of our gold and silver.
Therefore, India must be a perpetual drain upon
our monetary sources, and what I want you to con-
sider is this—if our present currency laws continue
and we have a constant excess of imports over ex-
ports, occasioning an annual drain of from 40 to 50
or 60 millions, how is that state of things to be re-
conciled with the currency laws which say, the
moment the gold and silver go out of the country,
up go .the discounts, and the merchants must pay
10 per cent. upon the money they get—and they
are very lucky if they. can get it on these terms ?
For 100 years before the passing of the Act of 1844,
there had been no change in the rate of discount.
It had always been 5 per cent, except a few months
in 1839, when it was 6 per cent. SincelB44 the rate
of interest has been changed 50 different times in
the Bank of England, and it has varied from 2
to 10 per cent. a year. This variation has been the
ruin of many commercial houses of the first credit
and respectability, and a most serious impediment
to all engaged in large. undertakings. I remember
asking the head of a great mercantile firm who had
failed in 1857, to what he ascribed his failure, and'
he replied to the rise in the discounts, which he
said made a difference of 40,000/. a year to him";,
and in our country how many masters and mer-
chants are there to whom the rise in discount from
2 or 3 to 8 or 10 per cent. would make a difference
of 15,0001. or 20,000/. ! Under the system of Sir
Robert Peel in 1844, the Bank of England must
raise their discount when the gold goes down, be-
cause if they do not they will become bankrupt.
But in doing so, they only shift the burden off their
own shoulders, and place it on the shoulders of
trading and manufacturing men. (Loud applause.)
Now, here I will make, one remark. We have been
told that all these evils are the resuit'of undue specu-
lation and the abuse of credit. But I go a step far .
ther, and ask what is the abuse of credit owing to?
Why, it is owing to this, that the banks are forced,
when gold is plentiful, to reduce discounts to a great
extent, and thus inflame speculation. When the Bank
of England lowers their discount the Scotch and
Irish banks do the same, and the country is thus
flooded with credit, and speculation is encouraged.
There was a banking establishment in this city, of
which much has,been said. We have heard enough
from the London journals of the ignorance and reck-
lessness with which that bank was carried on. I know
nothing about the matter. lam neither a friend to
the Western Bank, nor an enemy; but I think that
they were most imprudent and reckless in their
conduct. But this I will say, that the recklessness,
of the Western Bank, which created so much misery,
was a recklessness forced upon them by the mone-
tary laws of England. We never heard of such a
thing before the currency acts came into operation,
and I am happy to say, for the honour of Scotland,
that the old Scotch laws have enabled them, not-
withstanding all that recklessness, to redeem their
honour, for they have paid their debts in full.
(Cheers.) There are many people who will tell you
that all the evils that I have described are owing
to the weight of the debt and the taxation. But
that it is not so.I will prove to you. The count.y
never was so prosperous as it was from 1810 to
1815, and at that time we maintained 1,000,000
armed men, and raised by taxation 76 millions. You
remember the great prosperity. from 1852 to 1856:
Well, the sums raised by taxation during these
years were from 72 to 76 millions annually. There-
fore, you see the evils l alluded to are not the re-
sult of debt and taxation, for when currency is suffi-
ciently plentiful, we can-pay the debt and taxation
perfectly well. I wonldnot have dwelt so long upon
the distress which has occurred, if I did not think it
possible to find a remedy. I think it is perfectly
remediable, and though I will not venture to state
positively what that remedy ought to be, I think I
can suggest the principle upon which it ought to be
based. (Cheers.) Bythe present currencylaws specula-
tions are inflamed, and undertakings of the greatest
magnitude are set on foot as they were in 1816,1855,
and 1856, and just when they are approaching their
completion, and when the greatest possible advances
are required to carry them on, then is the time
that the imports exceed the exports, and the dis-
counts are raised. The way of remedying this is as
follows principle of Sir Robert Peel is this,
the more gold in the country the more notes. Well,
what is the effect of that ? The country continues
in prosperity when currency is plentiful. But
speculation of the wildest kind is set on foot, wages
rise, profits are great for a time, consumption
rapidly increases, the imports come to exhibit a huge
excess over the exports, and the gold is withdrawn.
Sir Robert Peel then says, diminish the notes in
order to bring back: the gold. The discounts
are raised to 10 per cent. or altogether refused, and
general ruin ensues.' How would a similar conduct
do in other similar cases ? Suppose the case of an
army when the supply of beef ceases. Sir Robert
Peel says, " if the beef is taken away take away the
bread also, and then they will be all right."
(Cheers and laughter.) But I say, if the beef is
taken away, issue more bread. (Cheers.) If the
gold is taken away Sir Robert Peel would take
away the notes also, and leave the country without
a penny to pay its debts. Now,
.my principle is
that, when the gold is taken away, issue more notes-

and 'then we will be able to get over the crisis.
(Loud applause.) Between the years 1810 and 1815
there was not a guinea sent into the country, never-
theless there was no monetary crisis at all. Why ?
Because there were plenty of notes issued. The
monetary crisis has only been a creation of modern,
times, since 1819, when the system, of paper
currency was established. A. very curious fact is
that, in 1848, when there was a dreadful monetary
crisis, the stock held in the Bank of France, which
had formerly been 10 or 12 millions,-suddenly fell
to 2,800,0001. What did the Bank do ? They issued
18 millions sterling of notes, bearing a forced circu-
lation. They did not issue 750 millions, as they did of
assignats, but they issued a reasonable amount, which
never became excessive or was depreciated, and the
consequence was that credit was immediately re-
stored, and 120,000 men, who had been thrown out
of employment, were re-engaged, and before the end

(From the Glasgow .Daily Herald.)
Sir Archibald Alison has delivered his views at great
length on the Currency and kindred questions, which latter,
in his opinion, are more numerous and more momentous
than the generality of mankind have imagined. The address
of the honourable and distinguished Baronet will be read
with interest by all classes, especially by the working, for
whose especial benefit it bears to have been given. Whe-
ther his conclusions will meet with an equal degree of con-
currence from the intelligent classes of his countrymen, is
a very different question. Ho says :—" It is a question on
which depends the liberty, independence, and existence of
the British Empire. I tell you, and I stake my credit on
it, that if the present system of ihe currency laws continues,
no amount of wisdom in your statesmen, no amount of
valour in your soldiers, can prevent us from rapidly
declining below our neighbours. I say that the liberty,
independence, and the very existence of Great Britain,
depend upon a right adjustment of the currency laws!'
If the currency laws be so far wrong, and fraught
"with the very existence of Great Britain," it is high time
thht our statesmen bestirred themselves to save us from
such fell results. Unhappily for the country, our wisest
statesmen, without respect to their political tenets other-
wise, with our political economists of highest repute, do not
see the ills apprehended by Sir A. Alison. That may be their
fault. They may change their views when the flood of light
shed forth in our City Hall on Tuesday night descends on them
"alike golden shower." In the meantime, however, they
are diametricallyopposed to the views propounded by Sir
Archibald Alison.
For our humble selves, we speak with all deference, and
the most unfeigned respect for Sir Archibald Alison, when
we declare, unhesitatingly, that we cannot subscribe to his
views on the Currency. In an address so lengthened, ne-
cessarily embracing so many and important topics, it is im-
possible for us at present to do more than touch upon a few
of the more salient propositions. Sir Archibald commenced
by informing his auditory—by whom be was deservedly
most cordially received—that our population, our shipping,
our imports and exports,. or trade generally, had enormously
increased from 1818 up to 1858, a period of 40 years. This
is self-evident. Corresponding with this increase, we are
told, and we were startled by the assertion, that our navy
had alarmingly deereased. It appears that in 1812 (when
were in the thick "of the great European war), we had "245
ships of the line in commission, and 272 frigates, and
altogether 1,000 vessels bearing the Royal flag." Then
comes the climax,—" At the end of this year, 1859, Eng-
land will hair() 36 ships of the line and 40 frigates, and
France 40 ships of the line. Now, gentlemen, here is
a picture I" It is. Further, the
.picture is heightened
by the reminiscence that during the American
Revolutionary War we had 126 ships of the line
in commission ; prior to that, in 1760, nearly a cen-
tury since, we had 113 ships of the line in commis-
sion. We have therefore declined in naval power. Now,
without instituting any comparison between our navy and
that of Franco, we ask, with all deference, where is the use
of raking up such naval statistics; still more, where is the
end of lending them such a peculiar application ? What-
ever the number of our ships of the line, frigates, or cor-
vettes, in commission, or ready for being put into commis-
sion, at the present moment, it is notorious that our naval
power, whether in the time of Rodney, Nelson, or at the
opening of the last Russian war, could not for a moment
compare with that which is now, or shortly will be, avail-
able. Why, our gunboats could destroy the most powerful
fleet that Britain ever fitted out ere the application of steam
power. We do not look to the navy list as affording any
real indication of our naval might. Still, it ought to pass
for something, looking to the statistics which Sir Archibald
has adduced, for prior and more palmy periods. Well, it
gives a number of vessels, of all descriptions, but entitled
to bear the pennant, of nearly nine hundred, including
about 161 gunboats. A very large portion of these are,
of course, in the non-effective schedule. We admit our
navy is not what it should be, but we trust will soon be ; still
we have not so declined since 1766. Then, our army stands
very deficient at present, according to Sir Archibald, as com-
pared with what its force was when we were at war with
France, and finally fought the battle of Waterloo. We will
not enter on that question, beyond saying that our army,
deficient as it may be, has lost none of its former well-woe
renown, either on-the plains of the Crimea or in the wide
expanse of Central India.
Our pauperism, our emigration, our criminal statistics,
are also all unsatisfactory, or not keeping pace with our
progress otherwise as a powerful nation, "There is," as
Sir Archibald Alison says, using the words of another also
rather distinguished literary authority, "something rotten
in the state of Denmark;" and he adds, on his own autho-
rity, " I am now to tell you what I conceive to be the cause
tbyo telling you the remedy.
Tofh allecausethi ofbe the erroneous state of
the currency.
anltwihialllco conceivenelude
When I say that such vast results are to le
and
ascribed to the state of the currency, I am aware that I am
making a stsong statement! for I am thus giving an ex
planation We that are most inexplicable," It is in

deed a "strong statement," however inexplicable the data
may be. But we must refer our readers to the address
itself for the explanations or reasons adduced in the sup-
port of such startling promises. We cannot very well
make out whether Sir Archibald approves of paper cur-
rency as opposed to, or auxiliary of metallic, for he appears
to blow hot and cold on the question. But we can gather
from his statements the general proposition that, " a
plentiful currency raises prices," that the suspension of
payment in specie by the Bank of England, by Pitt's Act, in
1797, "gave that increase of currency which enabled us to
carry on the war with France, and brought us through
that terrible struggle. We had imagined that the war was •
carried through by borrowing and adding to the national -
debt, as we now feel to our cost. Further, we learn, "So
powerful is a paper currency, when issued' in a wise way
(the qualification is necessary), that the little country of
Hungary, when engaged in a contest with the power of
Austria, issued a paper currency of 14 millions sterling, and
it was that which enabled it to maintain the armies that
maintained an equal contest with Austria, and, but for
Russian intervention, would have rendered Hungary inde-
pendent." We would have been happy had such been the
result,though,with due deference, the agency would havebaea
due to a different source from the mere issue of a paper cur-
rency. What is the issue of a paper currency by a nation
any more than a trader carrying a bill to his banker to be
cashed ? In both cases, the, creditor or party so advancing
looks to the credit or solvency of the party giving the pro-
mise. On that security the value of the document depends;
on no other. There is no royal road to geometry; as little
is there any magic process by which paper, coming, it may
be, from filthy rags, can be converted into gold, corn, wine,
or any substantial article bearing an exchangeable value.
These are commonplace elementarypropositions and we
would not have stated them had we not found Sir Archibald
putting forth such axioms. "If you increase the currency
too much, after the manner of the French with their assignats,
the whole good will be destroyed ; but if you wisely do it in
moderation, an increase of the currency necessarily makes
people happy, while ,a contraction of the currency neces-
sarily makes them miserable." If for the word " currency"
in the above passage, the words " beef, mutton, and corn"
were substituted, we would adopt, it, but not as it stands.
Gold is in itself capital, like houses, lands, flocks, or raw
or manufactured produce. Gold is also selected, along with
silver and paper, for the purposes of currency. Paper •
itself is nothing but the interposition of credit. But we
must close, with the expression of regret that, in this in-
stance, we are not more at one with Sir Archibald Alison.
We cannot help it, as we are as much bound as he is to
state our honest impressions; whether they prove erroneous
or otherwise. We cannot, however, take leave without ad-
verting to another statement, among many, which we do
not think will find much favour on our 'Change :—" I am
neither a friend to the Western Bank nor an enemy ; but I
think that they were most imprudent and reckless in their
conduct; and this I will say, that the recklessness of the
Western Bank, which created so much misery, was a reck-
lessness forced upon them by
.the monetary state of Eng-
land." Our simple comment is—Why were not the other
Scotch banks forced into the same slough of despond, seeing
they were subject to the like monetary condition of Eng-
land, be it real or imaginary ?
As to the remedy for those various evils, it is thus given
—" If the gold is taken away, Sir Robert Peel would take
away the notes also, and leave the country without a penny
to pay its debts. Now, my principle is, that when the gold
is taken away, issue more notes, and then we will be able
to get over the crisis." If this issue of notes would enable
as to get over a crisis such as that of November, 1857, it
ought to enable us to do what would be still better, viz.,
prevent us getting into it. With all respect, we believe
the said issue of notes would enable us neither to avoid nor
get over those periods of commercial crisis, which have
their source in undue trade and improvident speculation,
and would occur, as they have already done, independent
altogether of the currency—or whether it was paper, me-
tallic, or a combination, as now exists.

COUNTRY MA_RKETS.

BIRMINGHAM-MARCH 17.

We had small supplies of all descriptions of grain to-day,
and wheat met a slow sale at about late rates. No change
is made in the prices of any other article, except beans and
peas, which are rather cheaper, the latter nearly neglected.

LOUTH-:

:ARCH 16.

We have still to report a want of animation in the de-
mand to-day for wheat, and prices tending downwards.
Wheat ...38s to 42s Oats.... 2ss to 28s
White do .45s:to ..s Ditto, old ........—s to —s
Barley .37s to 40s Beans 42s to 46s