The Sun.
London, England, 1844-01-15 00:00:00

15, 1844.

THE CURRENCY.

PAPER MONEY VINDICATED.

A certain measure of value is necessary, if we would hold
commerce with foreign countries; and the average price of
wheat over the Continent of Europe in gold or silver gites that
m, a•ure. If three quarters of an ounce of silver be the average
value of a bushel of wheat in England, and that quantity be
coined into "s. 10id. (at ss. 2d. per ounce), the quarter will
be worth 31s. If one ounce of silver be its average equivalent,
the price of the quarter will be 41s. 4d.5 To preserve perfect
uniformity of price in gold or silver at all times, on the average
of seven or ten years, it should be the duty of Parliament, on
any petition to that effect being presented from those who con-
ceive themselves aggrieved, to ascertain whether the measure
had departed from the standard ; that is, whether since the last
arrangement more or less silver or gold had become the average
nfeutal equivalent of a bushel or a quarter of wheat; and to
alter the shilling and the pound sterling in weight accordingly.
Unless this be done, a sudden influx of the precious metals
might take place, from new discoveries of mines, or from im-
proved methods of working those in use, which would have
the effect, in a few years, of altering the measure of value to so
great a degree that fixed sums payable for a long series of years,
might not be of half the worth they are at present. How many
payments made by public companies and other corporatebodies,
on account of trusts confided to them centuries ago, are reduced
to comparatively nothing, from the want of such a committee
for the supervision of the coin as that which is proposed ! How
many charities have been injured by inattention to this plain
duty of Government ! Perhaps nothing has so much contri-
buted to deter people from making charitable bequests in
money, as the thought, that in the lapse of years it will have
become of little value. But without taking so wide a range,
every landlord who lets a farm or house on lease, and every
tenant also who takes either, ought to be protected from such
natural increase or diminution in the value of our coin as he
finds to be attended with practical loss or inconvenience to
himself. From 1287 to 1338 that quantity of silver which is
now coined into 38s. Bd. would purchase, on the average a
quarter of wheat. From 1339 to 1451, the price of a quarter
was 21s. 3d. of our present money. From 1453 to 1560, it
took only 103. of the same money to buy a quarter of wheat.
During the whole period silver had beeome so enhanced in
value that one shilling was worth in the last hundred years as
much as three had been in the first hundred years, and as two
in the middle period ; so that. in the course of a century he who
ontracted at the beginning to pay a certain sum, then called
1001., had to pay at the end what was still called 1001., though
it was really worth 2001. From 1561 to 1700 the value of
silver decreased in comparison with corn, being on the avertge
of that whole period exchangeable in the proportion of 455,
against the quarter of wheat, by which the receivers of fixed in-
come were injured, being paid not quite 25/. in the name of 1001.
Under the direction of a " Ccmmittee for the Supervision of
Coin," the pound in gold or silver will always represent, or be
exchangeable for, an equal quantity of wheat, taking the ave-
rage of a number of years. Let it be supposed, then, that 31s.
or 355. cr 40a. is the true measure of value for a quarter of
wheat in England ; as there is no doubt that this sum repre-
sents the natural value of wheat, it is just and necessary as a
measure of value between different nations' for without this or
some such measure they could not adjust the value of their re-
spective commodities in the common market of the civilised
world. But what is just and necessary between the inhabitants
cf different countries may not le equally or at all so between
the different inhabitants of the same country. Before we can
determine whether they are all entitled to be treated as the
inhabitants of another State, and paid according to the natural
measure of value, we must see whether these are not some cir.
eumstances affecting the value of money, applicable to them,
and not to the foreigner.
They differ from hint in the fact of being liable to a different
degree of taxation. Every man is protected in his person and
property by the State in which he resides, for which protection
he has to pay the State ; and this is evidently a payment which
neither ought to be nor can be exacted from the inhabitants of
a foreign State by, another Power, but which may reasonably
enough be required of the denizens of each particular country.
Whether it ought to be so required from them, as to cause any
difference in the price of commodities, will depend upon the
mode of taxation.

Such taxation as falls upon realised property, independent of
trade, needs not and will not add to prices. Whatever sums
are levied as a tax on land, or on capital in the abstract, as on
property in the funds, are directly taken from the parties, and
need not add to prices. If the landowner says, " 1 pay all the
burdens of the State, and for some of them, at least, I ought to
be reimbursed ; it is but fair, therefore, that I should be allowed
to demand more rent for my land than before this tax was
levied :" the answer would be, " If you increase the rent of
your land, the farmer must have an increased price for his
corn ; and the manufacturer who consumes it, paying that
advanced price, must have an increased price for his pro-
du:lions. If he gets this by our interdict of foreign goods,
except under payment of a certain duty, which is the only way
he can get it and keep it, you must pay a higher price for every
thing you buy, and the outgoings would, in that case, greatly
exceed the additional sum you receive from your increased rent.
If we do not protect him from foreign competition, he cannot
produce his goods with so much advantage to himself here as
abroad, and he will soon transport his manufacture to countries
where corn is cheaper, by which means you will lose far more
in the end than the tax for which you are contending."—Such
taxes then as these, which do not require or necessarily lead to
an advance in the price of commodities, may be levied without
causing a difference to the individuals of a country in the price
paid by them and by those of other countries. But this is not
the general character of our taxation. There may be, therefore,
other circumstances connected with it which will have an effect
on prices, considered with reference to individuals of the same
country.
'That there are such circumstances will be clearly, evident,
when we consider that our large revenue is nearly all derived
from duties on the followiog articles :—Malt, hops, beer, wino,
spirits, sugar, tea, coffee, tobacco and snuff, corn, butter, cheese,
currants and raisins, cotton, wool, silk, printed goods, hides and
skins, paper, soap, candles and tallow, auctions, licenses, coals.
glass, timber, bricks, &c. From the taxes laid on these articles,
under the head of Customs and Excise, we raise the sum of
forty millions annually, and from the Stamps, Assessed Taxes,
and Post-office about fourteen millions more, making in the
whole about fifty-four millions for the year 1830. All these
taxes, or nearly all, are not directly drawn from the parties
who are intended ultimately to pay them : they are first paid
by the producer or vender, and he charges them, with some
profit for his outlay, to the consumer, whence they arc called
taxes on consumption.
Now how is the producer to charge these taxes to the con-
sumer, unless he can add them to the natural price ? There is
clearly no other way. But if he adds them to the natural price,
his commodities will then be so much dearer than the same kind
of articles produced on the Continent by all the difference be-
tween our taxation and that of other countries. The conse-
quence of this will be, that the Englishman cannot afford to
take the same price in the common market of Europe which
will compensate men of other countries ; he must have more,
or he must lose the extra amount he has paid in taxes. He
cannot get more in an open market, and therefore he is shut
out altogether ; or he loses the amount of his taxes, in which
case, the producer, and not the consumer, pays those taxes
which are then erroneously called taxes on consumption.
Perhaps you will say," He has got the home market to him-
self, and in that he gets repaid his tax." If Government were
to lay protecting duties on all the above commodities, and the
preventive-service men were to exercise a vigilant scrutiny, we
might probably succeed in keeping up such a price at home, in
general, as would repay him ; but he is at all times liable to be
injured in the extent of his trade by the successful issue of
smuggling transactions ; to guard against which additional
sums of money must be spent, which will render additional
taxes necessary.
We will suppose, however, that he could be protected from
competition with foreigners in the home market, on all articles
specially taxed ; what in the next place is to save him from that
same competition in all other things? Men who pay taxes
on corn, beer, clothing, &c., on everything, in short, which
is needful for their support or comfort while engaged in pro-
ducing the various commodities by the sale of which they
live, must charge for everything they produce a
price as much higher than the natural price as that
taxation which is peculiar to them amounts to. They
must therefore be enabled to advance every commodity that
can be offered for sale to a higher price than their conti-
nental rival, or they are not repaid in the same degree that he
is. All competition must therefore be guarded against in the
home market, in every kind of goods, or the Englishman has
not justice done him. As this cannot be done, it follows that
with a metallic currency ho cannot escape suffering in the de-
gree in which he is taxed beyond these persons who are engaged
in the production of commodities in other countries.
But it will be said that there are some articles which the
foreigner produces, and the Englishman cannot pretend to
produce, such as wine, brandy, &c., and he is at least not liable
to injury here ? 1 fear, however, that this fact also will militate
against him. Whatever is imported for sale here ought to be
paid for by the export of some other articles. The foreigner
has a bill on England for the amount of his wine, which he
wants to make the roost of. If he buys English goods with it,
lie mnst pay so much more for them, as the taxation adds to
natural price. Ile prefers going to a cheaper market, and con-
sequently receives gold for his bill, with which he can buy more
goods in other countries than here. Heavy sacrifices are made
by the Englishman to prevent this; and, especially after his gold
has been carried away, his price lowers; for he has then to
tempt the foreign purchaser, in order to get it back again, by
the superior cheapness of our commodities compared with those
of less taxed countries. In doing this he loses even more than
the taxes which he has paid; and that he loses these is the
point which I have been proving.
If this representation be true, it will follow that prices in
a metallic currency cannot be maintained in England, for a
continuance, higher than they are in neighbouring countries, or
than natural price warrants. Ity a desperate struggle for life or
death, our productive classes have for a long time upheld them,
in defiance of every disadvantage under which an unwise Go-
vernment has compelled them to labour ; but prices still are
gradually sinking, and must soon find their true level. For
sixteen yearst the productive classes have been paying the
greater part of forty millions a year in taxes, which ought not to
have been required of them ; taxes which should have fallen al-
toget her on the consumer ; and they still remain crushed to the
earth by this terrible visitation upon them of a burden which they
were never intended to bear, nor can bear much longer. Forty
millions to be taken every year from the working classes, to
compensate for errors in legislation not committed by them, but
by their rulers, besides the greater part of 14 millions more for
stamps and postages, houses and windows, the whole of which
ought to be paid by the rich, or by those Who are above want, ac-
cording to their respective means, is an impost of such magni-
tude, to be made without reason on men who are wholly
unprepared to meet and unable to bear it, as cannot fail to ex-
cite feelings, not merely of discontent in those whom it affects,
bat of indignation.in every liberal mind.
It came suddenly upon the people, and such was their con-
sternation at the time, such their perpetual harass of mind ever
since to be able to stand their ground, that they have not yet
had leisure to inquire how, or why, er by whose fault, they are
thus overwhelmed with difficulties which thicken as the years
roll on. In the interim, they aro told by those public writers
and public speakers who profess to be their friends, that all is
going on right. " Wait a little longer (they say), and we will
get the taxes repealed which oppress you." But if a mistake has
been committed, if those taxes ought not to fall upon them at all,
why should they wait a day ? Why should they not petition at
once that these taxes should be charged as before to the con-
' sumers of commodities? If Government will not furnish the
' means of carrying them to their destination by an issue of
paper money, they can, at all events, commute them for a pro-
perty tax, and so relieve the producer. But whatever is done
should be done quickly, fir thousands of lives are lost while
we hesitate.

THE CURRENCY.
TO THE EDITOR OF THE SUN,
Dear Sir,—Your Correspondent, Mr. Pedic, has favoured
us with an article on the Currency, exhibiting much industry,
but, unfortunately, based upon erroneous principles. lie assails
a most mischievous institution, but does so upon utterly untena-
ble grounds.
As the error is in principles, more than in details, and, as the
latter are voluminous, 1 shall confine myself to one sentence,
which is the key to r. Pedie's position.
This gentleman, after comparing the average issue of the
Bank of England, for the three months ending January, 1841,
with the i,.sue in those ending January 1843, and showing that
the issue in the latter exceeded that of the former by five mil-
lions, proceeds thus :—" This expansion of the currency, it is

I have stated the natural price of corn in silver or gold
thus hypothetically because opinions differ on the subject of its
actual eruouut.
P This was mitten in 1533•