The Sun.
London, England, 1845-01-14 00:00:00

THE DISTRIBUTIVE AGENT OF

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INDUSTRY.
(From the Sentinel.)
The road, the canal, and the railway are called
into existence, when society has need of them to
distribute wealth through the various districts of
a country. As population increases, and the
products of industry are multiplied, these con-
trivances are improved and enlarged; thus show-
ing, that modes of transit and conveyance are re-
quired to expand, just as labour and its results are
more and more augmented and ramified. Every one
perceives, that, unless this moving power existed,
there could not be any intercommunication, nor could
commodities be distributed; and consumption, which
is the sole end of production, could not take place,
except in the locality where the commodity was pro-
duced. These are obvious truths, and they lead all
men to recognise the utility of the road, the canal,
and the railway.
There is, however, another distributive agent
of industry with whose real nature the public are
not well acquainted, and that agent is money.
Adam Smith assimilates money to a road, because
it is an instrument of transferring and circulating
real wealth from one person to another, just as a
road is the instrument by which real wealth is
transported from one town to another. If the
road is covered with turnpikes at which heavy
tolls are levied on the transit of goods, of course
those goods must be charged a proportionately
high price when they reach the consumer ; so
also, if the money of a nation is made of a costly
material, the consumer must pay for this costli-
ness. Were any one to insist that the rails on a
railway should consist of bars of gold, instead of
bars of iron, he would be deemed a lunatic ; for
it would be said, and truly said, that, provided
passengers and goods could be conveyed from
London to Liverpool as safely and as expedi-
tiously on iron as on golden rails, why incur a
useless expense in laying down a dear material,
when a cheap one would answer the purpose ?
However, when we come to apply this reasoning
to the Currency, people hesitate to carry out the
parallel between money and a road, and find it
difficult, if not impossible, to believe that an iron
currency would prove just as good a distributive
agent of industry as a gold currency. Never-
theless, Lycurgus established an iron currency
in Sparta, and it worked well for five centuries, and,
when it was changed for gold, ruin and revolution
followed. Time was, in this country, when our
currency was formed of wood, and the people were
happy and the revenue prospered. These precedents
are adduced simply to show prejudice that the mone-
tary affairs of a country can be conducted without the
aid of the precious metals.
The Earl of Ripon estimated the average quan-
tity of gold in this country at twenty-two mil-
lions. When we consider that the interests of the
debt and the annual charges of Government are
much more than double that sum, it is obvious
that the quantity of bullion, as stated by Lord Ripon,
is an inadequate agent of distribution ; and when
to this is added the enormous transactions of a year
in the various departments of business, common
sense must admit, that so scarce a metal as
gold, which cannot be multiplied as trade is en-
larged, is not a suitable instrument with which
to carry on internal commerce. In pursuing the
parallel between money and a road, what should we
think of our authorities, were they to narrow
the Strand, Fleet-street, Cheapside, and the Poultry,
in proportion as the traffic increased from the west
end to the City ? Yet this is precisely the plan on
which Sir R. Peel is acting, for he is narrowing the
distributive agent of industry, and thus impeding the
circulation of real wealth from man to man.
Sir R. Peel is strangely in contradiction with him-
self. He professes to be a Bullionist, and yet, curiously
enough, bas-es 14,000,000/. of the Bank circulation
on mere credit ; for to that extent his Bill of last
May allows the Bank to issue money, without pos-
sessing in its cellars an equivalent amount of bul-
lion. Is not this a recognition of a paper cur-
rency ? Is it not, to all intents and purposes, a
practical violation of his own principles ? It so
happens, that the nation owes 14,000,0001. to
the Bank, and this purely accidental amount
of debt is deemed by Sir Robert to be the equivalent
of so much bullion. When a statesman acts with
such gross inconsistence, what pretensions has
he to hold the helm ? Why, in the name of justice
and common sense, make a distinction between a
debt due to the Bank and a debt due to the fund-
holder ? If national paper is a sound representative
of the one, why not of the other ?
It is in reference to taxation, that the distinc-
tion between money and the precious metals be.
comes of paramount importance. Money need not
possess any intrinsic value, for it is simply the agent
of distribution. It is a token or representative,
not a commodity. But gold and silver are values
of themselves which cannot alter. Now, when a
tax is laid on a commodity, its value is not in..
creased, though its price is increased, and the
amount of the tax is the measure of that increase ;
for, were it otherwise, the producer would not
obtain tl:e ordinary rate of profit. All indirect
taxes are levied upon this principle ; that is to
say, whatever tax the producer pays in advance
to the State, he gets back from the consumer by
additional price. But, to do this, there must be
a currency capable of expressing that additional
price. From 1797, when Mr. Pitt suspended cash
payments, to 1819, when Peel's Bill restored cash
payments, there was such a currency in paper as
represented taxation. Since 1819, that currency
has been abolished ; but, as the taxation was
not abolished at the same time, the producer
has been made to pay it, since he has had no
means of charging it to the consumer. Why
so ? Because gold can only represent na-
tural value, not taxation prices ; and, as Par-
liament keeps gold cheap, whether it is abundant or
scarce, and has fixed it at the scale at which it ruled
in the time of Elizabeth, when there was no public
debt, and a very trifling revenue, wages and profits
must fall to the low standard of untaxed gold. Hence
it is, that ever since 1819, industry, not property, has
had to pay the dividends, and nearly all the expendi-
ture of Government. Now, there is no remedy for this
evil (unless we pay off the debt by a direct tax
on property), except a restoration of the currency
under which more than half the debt was contracted;
or, in the language of free trade, gold must cease to
be a protected metal, and be snbject to the competi-
tion of supply and demand.
The extension of our foreign commerce is
looked forward to as the means of employing
labour and rewarding industry. We hope that
day may soon arrive, when our ports shall be
open to universal intercourse ; but it is our duty to
warn the working classes, that their wages can never
permanently rise, however foreign trade may be
extended, under Peel's system of currency ; because,
as soon as prices rise, while gold remains cheap,
the foreigner will take away the gold ; and as
the Batik, in self-protection, must then con-
tracts its circulatien, prices will again fall, and
wages sink with declining profits. Thus, the condi-
tion of the working-classes can never continue pros-
perous for any long period, because, as soon as their
labour becomes valuable, the distributive agent of in-
dustry, money, is withdrawn, and the products of la-
bour will cease to be purchased by the foreigner when
they become dearer in the market than gold.
The father of Sir Robert Peel, a man of great
sound sense and vast practical knowledge, fore-
told what would be the result of returning to
cash payments. He said the measure would
double his son's property and ruin the country,
—a prediction which time has verified; for as-
suredly a country is already ruined when the
millions seek in vain for employment, and capital
seeks that profitable investment in foreign lands
which it cannot find at home. We beg the attention
of our readers to the following comparison between
an abundant and a restricted circulation, which we
borrow from one of the letters of the late Sir Robert
Peel :

"A restricted circulation never fails to create
every evil which can afflict an infthistrious people
scarcity of money, unpurchased. manufactures, de-
ficiency of employment, unpaid rents, dejected
agriculture, and unproductive commerce. These
are the mischiefs which necessarily distress
the individual,and embarrass the commu-
nity while its circulation is deficient; and, in
our peculiar circumstances, the mischiefs are greatly
aggravated by the amount of our taxation. When
money, on the other hand, is abundant, it may always
be procured at moderate interest. Bills of Exchange
and other private securities, are readily discounted ; and
every individual who has property or credit is accom-
modated with loas, according to his necessities. With
an abundant circulation, ingenuity is put to the stretch
to find new means of rendering it productive ; hence
employment multiplies, every individual finds the
means of subsistence, the manufacturers are all occu-
pied, our merchants send out additi▪
onal adventures,
the shipowners have freights at thei▪ r command, the
production of the husbandman is consumed by a busy
people, rents are more easily paid, and taxes more
easily collected. Such are the benefits resulting to
individuals and to the State."
We earnestly entreat all who may have been
seduced by the plausibilities of the Bullionists, to
weigh well this calmly-formed opinion of one of the
ablest and most successful merchants this country
ever pr ,duced. If the doctrine insisted upon by
the father of the present Prime Minister be true,
it is obvious that this country, with increasing
population and the increasing trade that
must be transacted to avert the pauperism of the
imperiously demands a moneyed agent of
distribution susceptive of expansion. That agent
cann.t be metallic, for there is no expansive
quality in the precious metals. We must, there-
fore, seek it in paper, as Mr. Pitt sought and
found it. Let gold rise and fall as all other cow-