The Sun.
London, England, 1850-12-31 00:00:00

MR. MUNTZ and the CURRENCY
TO THE EDITOR OF THE TIMES.

Sir,—l would net have troubled you with a se-
cond letter had you not been both personal and
abusive in your article of the 21st inst. I shall not,
however, like you, go into the clouds for evidence
against you and your tenacious reasoning—you have
already been there too long, and there are too many
there like you. There can only be one excuse for
your conduct, and that is, that since my corres-
pondence with your paper, in 1847, you may have
replaced the then editor, for all the charges you now.
endeavour to substantiate against me were then met
and refuted. To those who know me and my position
as a commercial man, your charge or insinuation that
I wish to pay my debts at 14s. in the pound is an
absurdity, and to them I need not address myself ;
but to all the rest of the world where your paper is
read, and where I am only known as a member cf
the British Legislature, I am bound in duty to my-
self to ask you to show how I, who always have three
times the amount owing to me that I owe to others,
and who can pay all that I owe three times over, can
be otherwise than a loser by any alteration in the
rate of convertibility of paper money, such as I have
proposed.
As to your facts and arguments, I have first to say,
thatyour premises are all false, your arguments contra-
dict each other, and you are utterly ignorant of the
real effects of the proposed alteration upon prices or
wages; you call your own sophistry honesty; and,
as is usually the case, being the great supportfr f
thieves yourself, you first call out " Thiel" against
every one who dares to differ from you. You com-
plain that lam never tired of explaining my words,
but that is your fault, who always intentionally mis-
construe them ; and simple as you say my doctrine is,
it is evident that your ignorance of all financial and
commercial affairs, which are not understood either

in the clouds or the heathen m 3 thology, renders
you quite incapable of stating it, if you can compre-
hend it.

I entirely deny your statement, that the national
debt was contracted in heavy money of full tale and
weight of gold at 3/. 17s. lOid. per ounce ; and I
challenge you to show your authority (or such an ab-
surd idea. Why, your own account of the greasy
bank-notes, shillings and sixpences as thin as wafers
and knives, and cabinet gold guineas, sold at 275.
each, in former days (which I have seen sold at 325.
each), proves that you know your statement to be
false.

Why, so far from the national debt being borrowed
in heavy money, more than all the present amount of
800,000,0001. was borrowed at the rate of 601. and

under for Three per Cent. Consols, and the money in
which it was borrowed was worth no more than 104.
in the pound in property and produce if compared
with gold at 31. 17s. 100, per oz., and 13s. 4d. if
compared with the then price of gold, which not
being required for money, never advanced in the same
ratio as other articles ; so that in fact the country
really borrowed only 250,000,0001. Then it should
also be recollected that before the Bank Restriction
Act debts might be paid in silver, by weight or in
tale ; and also that wheat could not be imported at all
till the average was 48s. per quarter (Winchester),
and when as low as 40s. a bounty of sixpence per
bushel was allowed upon the export of it. But the
great question is this—ls the coin of the United King-
dom of the same value as the circulation ? Any one
who says they are of equal value must be very igno-
rant or very credulous, or both. Can any one really
believe that a country which keeps in active circulation
40,000,0001. in bank notes, to say nothing of bills of
exchange, with about 60,000,0001. in coins, has a circu-
lation of the same value as the coins ? Why, the idea
is preposterous. If such were really the case, why
have any paper in circulation ? why not convert it all,
and solve the question ? Why do you all boast of
being able to keep 29 or 30 millions of paper in cir
culation, whilst 11 millions of it remains in the bank,
and reduces the active circulation to about 18 mil-
lions ? You will say the paper is all cenvertible. I
ask how, when, and where ? Why, your very parti-
cular friend, the late Sir Robert Peel, declared in my
presence more than once that convertibility alone would
not maintain the value of the paper; and therefore he
carried the Bill of 1844, which I supported with a
view of proving the Bill of 1819, and which the coun-
try is now approaching the full effects of. There is
no better way of judging of the difference in the
real value of the &mutation as compared with
the coins, than to look how small an amount of it
is sufficient to alter prices temporarily. The addi-
tion of four millions of bank paper to the average
active circulation of 18 millions made all the rise in
prices in 1845 ; and the withdrawal of that four mil-
lions, with free imports, has brought the prices of
produce, both commercial and agricultural, to the
lowest rates within the memory of man. It is there-
fore clear that if an addition of four or five millions
to the cash money of the country of 100 millions can
make such a difference in the value of produce, the
alteration necessary in the value of the circulation to
keep wheat at an average of 50s. is nothing like your
proportion of 14s. to 205., whatever may be found to
be the necessary alteration in the coins to enable us to
maintain that extra four to five millions of additional
paper in circulation. You wi!l say that all our ex-
changes with other nations would be altered by any
change in our coins. No doubt they would, or else
the additional paper would be withdrawn from circu-
lation to buy gold for exportation.
Again, you will say that a foreigner having money
in our funds would be a loser, which would be a
breach of national faith. I admit it, and thus far
I think that national faith should be carried out. The
foreigner who has money in our funds ought to be
paid in full weight and tale; but national faith be-
tween our people—between a fundholder and a land-
holder, farmer, or manufacturer, is complete non-
sense. The Government are as much bound to sup-
port the just and relative position of the one interest
as of the other. Just take the case of two farmers,
both occupied in agriculture in 1814, both having
made 20,000/. by growing wheat at an average of 80s.
per quarter. The one retires, and buys into the funds
at 60/., and is now worth full 30,000/. ; the other,
having continued farming, possibly with some little
profit, but probably with considerable loss, is now
called upon to pay his share of the interest of the
30,000/. which was gained by wheat at 808., although
be must grow the same article at 40s. per quarter.
You may call this national faith, I call it national
robbery. But you say that no alteration of the circu-
lation will improve the condition of the farmer, that it
will only enable him to cheat his creditors and relations;
that his wheat will be only worth 355. of the existing
coinage, and it will purchase no more sugar, tea,
spirits, or tobacco, &c., than it does now; also that
his labourer will require and obtain 13s where he
now gets 9s. Upon all these points I am at issue
with you. All these articles are subject to very
heavy duties, and those duties would remain without
alteration. The price of brandy, with 20s. per gallon
duty upon it, would be about 275. 6de but whatever
change took place would only affect the 7s. 6d., and
possibly might raise brandy to 295. ; it would be less
in tobacco, tea, and sugar, as the duties are lower in
proportion, as would the rise in price be rather more.
Now, as to wages, there are two questions; the one
is, that Os. per week now is far above the ratio of
wheat even at 405., as may be seen by reference to
the rate of wages when wheat was the same price
about 1775 to 1785, before an increase of
paper circulation had affected prices. Wages
then were about 6s. per week, and will be
so again if wheat remain at 40s. The other ques-
tion is, whether in case of an altered circula-
tion to keep wheat at an average of 503. agricultural
wages would advance ? I am decidedly of opinion
that they would not, and all previous times appear to
me to prove that 93. per week for agricultural wages
is quite in ratio with wheat at 50s, I will just say
here, as I did in 1847, that I am not so ignorant as
to propose to carry
.out any such change instanter ;
all such changes ought to be made as slowly as they
reasonably could, the slower the better, to allow for
the completion of distant transactions. It must be
evident to every one who has well considered the sub-
ject that the pretended power of convertibility is ideal
and delusive; that the only real use of convertibility
is a means to regulate the quantity of paper in circu-
lation, and prevent it from being issued in excess.
But if the point of convertibility, or value of the
coins, be out of accordance with that range of prices
whieh is necessary for the payment of the taxes, rater,
rent, and other liabilities of the country, the conver-
tibility can only be maintained in that partial manner
which it is now, and which is sufficient for the wants
of the community, by such low prices of manufactures
as shall force themselves all over the world, but
leave no profits for the manufacturers. In 1845 and
1846, when the foreign exchanges were neglected,
and prices of manufactures were advanced so as to
afford a profit, the gold was exported instead of the
manufactures, and the utter impossibility of main-
taining the 1844 Bill, excepting with very low prices,
was clearly proved. The conversion then of four
millions of paper into gold out of twenty-two mil-
lions nearly caused bankruptcy and anarchy, and the
attempt to have converted four millions more would
have completed the farce. Mad the then Government
been as honest as they pretended to be, they would
not have suspended the 1844 Bill until it hrd been
acknowledged to be a bad Bill, for they and their op-
ponents had together maintained that it was per-
fection. When I addressed you on the 18th inst. I
was not aware that you had written an article upon
Californian gold, and therefore " I did not think to
catch you upon the hip," but by that article you have
caught yourself upon the hip. Who do you think
will believe your sophistry upon that subject ? If
you are half as honest as you profess to be, be-
lieving, as you say you do, that all our debts, public
and private, have been contracted for payment in gold,
in full weight and tale, how can you avoid supporting
a law for reducing the Bank price of gold to whatever
rate the importations from California may bring it ?
Do you mean to say that, whatever the reduction in
Yaluel the' weight of gold alone should pay all debts)