The Sun.
London, England, 1845-08-25 00:00:00

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!price at which it was Current before there was ah: indirect
taxation imposed upon the country. Gold at Si. 17e. 100.,
and wheat at 4s. 6d. per bushel, did very well 200 year. ago,
when scarcely any indirect taxation existed ; but to attempe tar
enforce such prices for the general products of industry now,
would be to consign all the productive classes to unremunerated
toil, if not tw absolute beggary ; but more especially the agri-
cultural classes, who could not, in their distress, have necour,e
to steam. machinery as their manufacturing brethren coold.—
(Hear. ) After Some further arguments to show that the low
standard price of geld peremptorily forbade any rise in the price
of wheat or other corennodities, the lecturer directed attention
to a machine he had Very ingeniously constructed, called a
currency clock, on which were shown the relative proportions'
in value to each other of gold, silver, wheat, and the wages of
labour on the level of an annual taxation by Customs and
Excise of 17,000,0001., which he showed would consist with
455. per quarter for wheat, with gold at 3/. 17s. 10id. per
ounce; with silver at ss. per ounce; and the wages of the
labourer at 7s. 6d. per week. There were the prices with
which the country could prosper under an annual taxation of
17,000,000/. But as taxation increased wheat ought to rise
in proportion; and that proportion he maintained, as the result
of close observation, should be—that for every million of indi-
rect taxation per annum beyond 17,000,0001., Is. was necessary
to be added to the price of the gleaner of wheat to compensate the
farmer for the increased taxation he sustained.—( Hear, hear.)
At the present time the indirect teetation was twenty millions
beyond the seventeen millions, so :Ms. were necessary to be
added to the price of the quarter of wheat to remunerate the
grower properly; 20s. added to 455., the:original price with
seventeem millions of taxation, would make: 655. per quarter
for wheat, which he thought would commend itself to every
practical farmer as being about the price whic;: he felt would
afford him a fair and not extravagant remuneratiole.—( Hear. )
But though the wheat rose, the gold could not rise that was
held down by the standard price of 3/. 17s. Mid. peer ounce.
Here then was an absurdity, a distinction in the price sef two
things of equal value—one was fetching 655., the other sto,ld at
the scale of only 455. Was that asystem to be established as oNe
which would exchange equal values fairly and upon equal terms;`
—( Hear; bear.) He had now to show them that this fixed,
unvarying peice of gold pulled down eventually the prices ot
all other prodtctions from a remunerating price to its own
level' This was affected by the certain export of gold by the
foreigner whenever, by the high price of other things, gold
became the cheapest article for him to take in return for the
goods he has sold us. The foreigner was naturally anxious
to take back a return cargo; he therefore looked round to see
what would be advantageous to is im to buy to sell again ; but
he found wheat at 655. per quarter. " That won't do," says
he, " I can get it at Dantzic at 30‘. ; I won't take wheat."
He looked again ; he saw iron at 61. per ton. " That
won't do," he says again, can- get it, at ;Sweden
at 41. per ton." But there was one article which he
saw had not risen, an article too which was tt.Q easiest of soy
to carry away—gold. Gold has not risen with toz other coo:I-
-nv:Allies, and therefore was to him too cheapest commodity,.
and he took it. But, says an Englishman to this foreigner,
" You ought not to refuse taking our productions at our prices,
even if they are what you call high, fur you have had the bene-
fit of bringing your gonsls to the same market, and obtaining
similar priers for them, and after all our prices only give vs a
fair return for our own expenses." " That is all very well,
rejoins the foreig7ner, " but I like to take the cheapest which
I can find—your re'on, your lead, and your wheat, are all much
dearer than your golca.• I like your gold best. I prefer taking
your untaxed gold to ys tr, taxed articles." Away, therefore,
itehneggthoildofwtirlite.,
what
Sutp:..sueltd.ltbie the oltimate result ? Why, that
s operation. m
to be courued for any
the c .untry, and consequently the Ba.lk of England, would be
drained of its gold. So long as goods ~,,ere higher than gold,
gold would be chosen by the foreigner in 1,-reference to goods.
—( Hear, hear.) But the Bank of Englandi being compelled
by law always to provide gold on demand, was obliged to have
recourse to energetic though destructive measures to get the
gold hack again into its coffers. Then came the pressure
upon the productive classes, agricultural and manufactur-
ing. The Bank of England knew that the cause of the
gold going abroad was its comparative cheapness, and
however grieved it might feel in putting an end to a
prosperous state of things induced by remunerative prices,
stern necessity compelled. 'f he Bank must have the gold
back at all hazards, and it took measures fur bringing down
corn and all other productions, which were so much higher
than the gold to the level of gold, for the Bank knew well
enough that that was the only effectual method of stopping
the export of gold and bringing it bask to its owe coffers. This
was done by the Bank beginning to withdraw Its supply of
notes, refusing discounts, or selecting only the very highest '
character of bills for discount; raising the rates of interest,
contracting its accommodation to country bankers, and various
other methods which it had at its command: By the use of
these means the general eirculatingmedium became contracted;
everybody somehow or other found himself short of money ;.
there was no effecting sales without submitting to a reduction
in prices, and in proportion to the intensity of the pressure was
the fall of prices, which fall only ceased till things were-
brought down as low or lower than the price at which gold
was fixed. They were, therefore, placed on the horns of a.
dilemma—if the Bar.k managed to keep the gold in the
country, it only did so by keeping all our produce so low in
price as to ruin the agriculturists and manufacturers, because
they did not get back what they had, paid in taxation. On the
ether hand, if they got remunerating prices, and paid their
workpeople for their labour, then away went the gold, and the
Bank and our monetary system were both in danger
of being brought. to a standstill.—( Hear, hear.)
In illustration of this, the lecturer referred to the panic of 1825,
which he said was a memorable lesson of the vascillating and
insecure nature of our present monetary eystem. He then
proceeded to consider the causes of that panic. Sir R. Peel's
Currency Bill of 1819, he said, instead of lowering prices only
4 per cent., as its abettors had prophecied, speedily pulled
them down 40 or 50 per cent. Wheat, which had been 705.„
80s., and 99'. per quarter, was brought down by the latter end
of 1822 to about 38s. ; meat, which had been sold for 4s. 6d.
or ss. per stone, was reduced to 2s. rid., and other things in
like proportion, This unexpected reduction in the income of
the sellers of coCamodities, without a proportionate reduction
of the national debt, caused such depression and ruin, that the
Ministers were sjareeed, and hastened to relieve the distress by
the re.issue of one-pou,:d notes, thereby inducing greater ac-
commodation by the count;''Y bankers. The end in view was to
,-yhich had fallen so low ; that was
increase the prices of goods
what was wanted; but, as he had already shown, the prices of
goods could not permanently rise I."ithout the gold leaving the
country, unless gold and silver were ,eermitted to rise in the
same proportion. The Ministry were toad this by persons who
understood the currency. but all argument was in vain—they
persisted in forcing tie the prices Of goods. while they kept gold
retu'it turned Out as
no. 10141. and the
had been anticipated. left the cotinzey—tbe Bank Post Ira
stock of bullion—the nation was convulsed fre.'n end to end, and
had the panic continued twenty-four hours .
Mr. lluskis-
.sorted to.
-
son said, that a system of barter must have been
What was wanted, continued the lecturer, was a systes: which
would let gold rise in the *erne proportion as taxation re'ist'd
the price of other things. If gold thus rose it would not tee
exported, and a pet manently remunerating price both for corm
and everything else would be obtained.—( Hear, hear.) And
here he would pause to inquire how, under the operation of the
present depressing system, was it possible for the farmer to.
avoid pressing unduly on the labourer ? It was the result ne-
cessarily engendered by the operation of the low price system,
and it could not be otherwise, unless they enabled the farmer to
pay better wages by giving him better prices for his produce.
It was all very easy for gentlemen of the manufacturing dis-
tricts, who counted their profits by thousands, to declaim
against the low wages of the agricultural labourer, and exult-
ingly to point to the condition of their own work-people by
way of contrast, thus taking credit to themselves for superior
generosity. This, however, was a very fallacious way of look-
ing at the matter. If they really wished to contrast the matter
fairly, let them compare the amount of wages paid with the
amount of profits realised from the wages.—( Hear, hear.)
But in order that gold might be able to rise in proportion to
other things, they must have a kind of currency which
would allow of this taking place ; they ;oust have
another vehicle or medium exchange ; and that could
be obtained by the issue of a fixed amount of Government Ex-
chequer money, based upon the proceeds ot the annual taxes.
In such a currency as this, gold could rise or fall like all ocher
commodities, according to supply acrd demand, and in subser-, •
vience to the amount of taxation imposed upon goods. But
here they were met with what Sir Robert Peel, and those who
agreed with him, thought an insuperable objection. " What."
say they, " are you foolish enough to recommend that the
paper currency of the country should he convertible into gold
at the market price, instead of the fixed price that we have
now? Pray what would your pound be ? What would your
pound note mean ? This year, perhaps, gold would be 41. an •
ounce, and then your one pound note would exchange in the
market for a quarter of an ounce of gold ; next year gold
might be Si. an ounce, and then your pound note, instead of
being the fourth-part of an ounce of gold, would only be the
fifth-part of an ounce ; and if gold were to rise to 61. an ounce
then your pound note would be only the sixth-part of an ounce.
Why, your pound would be always changing, upsetting all
contracts, and alternately robbing all debtors and creditors.
No, no ; let us have a pound which is fixed and invariable
in value. Let us have a pound which will always command a
certain definite quantity of gold or silver ; then we know
what we are about. But if the pound is to be a thing con-
stantly changing in value, nobody will know what they are
doing." Ile had put this question in as strong a manner as
he possibly could, because, in the first place, it was an ex-
ceedingly prevalent one, and, secondly, because he was
anxious to grapple with it in its most imposing form.
The whole matter resolved itself into this simple question—
ought or ought not our money denomination, whether pound,
dollar, shilling. or franc, to be or represent at all times and
under all circumstances a certain definite (that was, an ascer-
tainedgd
haunmd
bsliyl v
ye rr
e? s u
mS ierd Rt
He tr
(u ta lin i lecturer) Y f
el m and n ,iit
ought.invariable)
say it ought not, and joined issue with him on this point. His
position was, that neither in this nor any other country ought
the money denominations to represent under all circumstances
a fixed and invariable quantity of gold or silver, and if they
overthrew Sir Robert Peel upon this point, they, upon his crwxs
confession, overturned the whole ants currency scheme, Aar he-
nad said the whole of his measure rested upon that assumption.
—( Hear, hear.) The lecisrer next remarked upon the
sources from which the revenue of the country was derived.
Eight-tenths of it, he said, was derived from duties upon com-
modities, and the price of them ought to depend upon the
amount of taxation imposed ; for, as Mr. APCulloch had justly
observed, " when taxes are placed upon commodities, their
prices must rise in a corresponding proportion, otherwise the
producers will not obtain their ordinary rate of profit." After
some further able arguments upon the evils connected with a
fixed, unvarying price of gold, the lecturer proceeded to re-
mark that the system regulated the quantity of money in cir-
culaCon, not by the wants of the people and the demands of
agriculture and commerce, but by the quantity of a certain
foreign metal which it was probable could be procured by the
Bank at the price fixed for it ; and there was no class of
persons whose interests had suffered so much from this cause
as the agricultural class. In London and other great
towns great facilities were afforded by bills of exchange
and promissory notes, so that the pressure which would other-
wise be felt was relieved in a great degree by these substitutes.
But in the country districts, where bills of exchange wore
alinoa unknown, the want of an abundant supply of circulating
medium as most severely felt. The lecturer then alluded to
the restrictions placed upon the issues of country bank sby the
recent Act of Parliament; after which he said—However
clear and demonstrable this subject might appear to himself
and to the meeting, yet he was aware that in an assembly of
thinking men to whom a difficult subject had been for the first
time brought under their consideration, that some such
thoughts as the f dlowihg would be prevalent :—." Well, it ap
pears, as far as I can judge, very plain and very true; but Si
R. Peel and other eminent men are of a different
opinion, and
I wonder why this is : they surely must see
other light, or perhaps they are acquainted •
with something
more respecting it that has not been brought forward by the
lecturer to-day. I should very much like to hear a little more
of what such parties as those have to say to it. I should like
fully to und, rstand the opposite opinion, that I might be able
fairly to judge between them, for at present I have only heard
one side of the question." He (the lecturer) would therefore
to the best of his ability, and without knowingly withholding
anything, give them Sir B. Peel's view of the subject, as tie
forth in his public speeches upon the question, and then
leave them to draw a fair comparison between their views.
Sir R. Peel's view appeared at first eight to be very
correct and simple, and indeed it was true, as far as it
went, for it was wrong rather because it was incomplete%
and did not embrace all that was necessary to be con-
sidered, than that it was wrong in itself abstractedly. Sir B. .
Peel's philosophy of money appeared to he embodied iii the fol-
lowing reflections :—" What is money ?'' He answered
‘, The measure of value, that is the instrument we make use of