The Liverpool Standard and General Commercial Advertiser.
Liverpool, Merseyside, England, 1840-02-04 00:00:00

THE CURRENCY.

We are indebted for the following extract to Mr, Jones
Loyd's pamphlet, " Remarks on the Management of the
Circulation ; and on the condition and conduct of the Bank
of England and of the: Country Issures, during the year
18,39:
" ON THE CONSEQUENCES WHICH DEPEND ON A GOOD OR
DAD MANAGEMENT OF THE CIRCULATION.
" Doubts have been raised as to the effect which any de-
gree of mismanagement of a paper currency, so long as it is
convertible and the issuers of it continue solvent, can produce
either in creating, intensifying, or prolonging the evils of com-
mercial oscillations. Whilst some parties attribute the fluc-
tuations of trade, and the not unfrequent recurrence of mer-
cantile and commercial difficulty, almost exclusively to mis-
management of the currency, other persons have taken a very
different view of the subject. I Fluctuations in trade, they
contend, are necessarily connected with the very existence of
commerce ; variations in the relation of supply and demand
arise out of natural circumstances, and will produce alterna-
tions ~of prosperity and depression, whatever be the circula-
ting medium, and in whatever manner regulated. The case
would not be different were the circulation wholly metallic.
Speculation, according to their views, originates in causes
unconnected with the state of the currency ; and although an
undue amount of issue may aggravate the evil where it exists,
yet prices are out indirectly and distantly connected with va-
riations in the amount of the currency, whilst other causes
affect them more immediately and more powerfully.
" It is desirable, no doubt, that a correct understanding
should exist on this point. Exaggerated views of this, as of
any other subject, may very possibly have been indulged in
by those who direct an exclusive attention to the examination
of it ; but we must not on that account run into the opposite
extreme, and close our eyes to the serious consequences to a
trading community which depend upon the regulation of the
circulating medium. The currency, in which all transactions
are adjusted, has the same reference to the healthy state of
trade which the atmosphere in which we all live has to the
physical constitution of our bodies; irregularities and disorders
may arise from a variety of causes, but the duration and viru-
lence of them will materially depend upon the pure, healthy,
and well-regulated condition of the medium in which they
exist. A well-managed currency cannot prevent the occur-
rence of periods of excitement and over-trading, nor of their
necessary consequences, commercial pressure and distress ;
but it may tend very powerfully to diminish the frequency of
their return, to restrain the suddenness of their outbreak,
and to limit the extent of their mischief. The connection,
again, between fluctuations in prices and variations in the
amount of the circulating medium, is a question of extremely
difficult solution in its detail ; and, probably, after the most
laborious investigation of it, we can only come to the conclu-
sion, that the immediate effect upon prices of any variation
in the amount of the circulation may be over-estimated,
whilst there undoubtedly exists a very intimate connection
between them. Indeed, unless this be admitted, the whole
doctrine of regulating the circulation, by reference to the
state of the exchanges, falls to the ground, and we are left
without any principle upon which the management of the cir-
culation can rest.
" Whatever differences of opinion, however, may exist as
to the extent to which either fluctuations in the state of trade,
or the rise and fall of prices, are attributable to an imperfect
regulation of the currency ; these, it must be admitted, are
secondary considerations only. Unless the paper circulation
of the country be regulated by a fixed rule, not fitful and ca-
pricious in its operation, but constant and invariable, its
convertibility at all times cannot be effectually secured, and
the maintenance of the value of the currency, as measured
by its ancient metallic standard, must become precarious and
uncertain. Upon this point the events of the past year pre-
sent us with an example pregnant with the most valuable in-
struction.
" The monetary systems of the two principal commercial
communities of the world have been subjected to a severe
trial. In England, a combination of adverse circumstances
has caused a prolonged period of unfavourable exchanges ; a
heavy drain upon the bullion of the bank has ensued ; the
necessary reduction of the amount of the paper circulation of
the country has been delayed till some time subsequent to
the commencement of the loss of bullion, and has not at any
time been carried to a corresponding extent. The conse-
quence of this has been a reduction of the bullion to a point
which justly cansed very serious alarm, and a general con-
viction that the monetary system of the country had been
brought into imminent danger. The difficulty, however,
there is reason to believe, has been overcome ; the bullion is
increasing, and the regulation of our paper currency, by re-
ference to its ancient metallic standard, we may reasonably

expect will be maintained.
' How striking is the contrast if we turn to the United
States. Connected as that country is with England in all
its commercial relations, it was impossible that the circum-
stances which caused a heavy pressure upon the monetary
system of one country should not, at the same time, seriously
affect that of the other. The drain upon our bullion, and
the measures necessarily taken to counteract it, were imme-
diately felt in their effects upon the banking system and upon
the currency of the United States. The strength and soli-
dity of the system upon which the circulation of each country
is established, were thus simultaneously brought to a con-
clusive trial ; and the different result in each case might have
been reasonably anticipated from the different principles upon
which the management of the circulation in each country is
based.
" In the United States, the paper circulation is under no
general systlin of control. The duty of maintaining the con-
vertibility of the notes, and the corresponding power of re-
gulating their amount, does not rest w►th a specified body
or institution ; unlimited competition exists amongst banks
of issue ; and these banks combine with the business of issue
all the ordinary banking business of deposit and discount.
The inevitable tendency of this system is evidenced by re-
cent occurrences ; it has proved unable to sustain the trial,
and, after a feeble struggle, has altogether broke down. The
controvertibility of the paper circulation has not been effec-
tually maintained. The country is subjected to all the fluc-
tuations and confusion which attend a suspension of specie
payments, and will have to grapple hereafter with the formi-
dable difficulties which must attend the effort to restore a
sound system of currency.
" This result was not unforeseen by those who had care-
fully investigated the principles of currency ; supposing the
cabinet of Washington to be sustained in its views by the re-
presentatives of the American people,' and that the Union
is left to be supplied with a paper currency by an unlimited
number of banks, acting in competition, and without any
control from the action of one powerful central body, we may
anticipate, with certainty, a succession of catastrophes such
as we have lately seen, occurring at intervals more or less
distant according to circumstances. [Norman on Currency,
I 1838, p. 60.] This striking anticipation of a monetary con-
vulsion, which has subsequently occurred, is calculated to
create confidence in the truth of the principles upon which
the prediction was founded, and to establish the assurance
that a careful investigation of general principles will always
prove to be the best guide through the intricacies of practical
details.

" In England, the paper circulation is established on the
sound principle of vesting in one institution the power of con-
trolling its amount, and the duty of maintaining its converti-
bility ; but that principle is very imperfectly carried out; the
power of control is incomplete ; rival issues, though of a su-
bordinate character, are permitted ; banking functions are
united with the management of the circulation, though in a
more limited degree than in the United States.
" The consequence is, that our system, by virtue of the
sound principle upon which it is based, has sustained the trial
to which it has been subjected • although, in consequence of
the inconsistencies and imperfections which attach to it, the
struggle has been difficult and prolonged, and accompanied
with many well-founded apprehensions as to the result. Had
'the power of the Bank of England over the circulation been
complete, and not counteracted in the first instance by the
country issuers ; and again, had the Bank been left fo pursue
her simple duty of regulating the circulation by reference
only to the state of the exchanges, and not been subjected to
improper demands upon her in consequence of her connec-
tion with the government and the commercial world, her
difficulties would have now greatly diminished.
" It is not always safe to judge of measures solely by events ;
and mankind are perhaps too ready to take a fortunate result
as the evidence of wisdom, and failure as a proof of folly.
But in those cases in which events can be clearly connected
with the preceding circumstances, and be shown to be their
natural and legitimate effects, we may safely infer from the
nature of the results, what is the character of the system
from which they proceed. In the case before us, it seems
impossible to doubt that the different fate which has befallen
the monetary system of the two countries is the consequence
of the different principle upon which those systems are
founded ' • and if we are intent upon profiting by experience,
and wish to derive from past errors the lessons of future
wisdom, we shall surely find in the respective condition and
conduct of the Bank of England and of the Issuing Banks of
the United States during the last year, abundant reason for
repudiating the principle of competition in the management
of the currency ; whilst we shall perceive more clearly than
ever the necessity of strengthening and extending the influ-
ence of the Bank of England as a bank of issue, and at the
same time restricting, as far as possible, its connection with
the business of deposits and discount."

SPRING ASSIZES.—The Judges appointed for the North-
ern Circuit at the ensuing Spring Assizes are, Mr. Justice
Coleridge, and Mr. Justice Erskine, and the periods for
holding the Assizes are fixed thus :—Appleby, Tuesday,
February the 18th. Carlisle, Thursday, February the 20th.
Newcastle, Monday, 'February the 24th. Durham, Satur-
day, February the 29th. York, Thursday, March the sth.
Lancaster, Thursday, March the I9th, and Liverpool,
Tuesday, March the 24th.
THE NEW CHURCH AT SKIPTON.—A new edifice entitled
Christ Church has been opened at Skipton in Craven, York-,
shire, and consecrated by the Bishop of Ripon ; the clergy-
man licensed by the bishop to preach in the church is under-
stood to be a genuine Puseyite, as might be supposed from
the arrangement of the new church. The chancel is one-
third the whole length of the church, and is raised from the
floor of the nave by an ascent of four steps. On the north
side of the. topmost of these four steps stands the pulpit ; on
the south; the leCtern.-WhenCe the lessodi are fetid. In the
centre of the topmost stands a fixed faldstool, holding the
Book of Common Prayer, turned towards the altar, so that
the officiating clergyman, in saying all the morning and even-
ing prayers, kneels on the step with his face towards the altar.
The sentences and exhortations are read and said from a low
desk on the lowest step looking towards the people. Half-
way down the chancel, on another step, stand the altar rails.
The altar itself is of stone, finely carved, to correspond with
the architecture of the church, in the early English style.
It is covered with a crimson cloth, the fringe of which hangs
only an inch or two over the edge, leaving all the carving
uncovered. On it stand two massive wooden candlesticks,
highly carved and richly gilded. In the south wall, within
the altar rails, is fixed the primitive credence, on which to
place the sacred vessels and sacred elements, previous to
oblation. It is of carved wood, and covered with a cloth
like that on the altar. Christopher Sedgwick, Esq., of
Skipton Court, has superintended the construction of the
new church. A correspondent of the Record, the organ of
a large body of Evangelical churchmen, bitterly complains of
these evidences of Popery in the Anglican church. He says :
The substitution of a faldstool and lectern, neither of
which are once alluded to in the Book of Common Prayer,
instead of a reading-desk, is opposed to various directions
which are given, to the effect, that the
andentiresueruvdiecrestboeud bpery-
formed in such a manner that it be b
the whole congregation, which can never ntebveergliieeattehr pecat of it
arseina
church of any ordinary dimensions,. if _ _
be read by the officiating clergyman, after the Romish
fashion, with his back turned to the people. But the substi-
tution of an altar instead of the communion-table, is a most
flagrant violating of the rubric and canons, by which it is di-
rected that, instead of the Popish altar formerly used, there
should he placed either in the chancel or body of the church,
in which latter place it usually stood, at least during the ce-
lebration of the Communion,
at the early period of the Re-
formation, a table, and a table, only styled " the table,"
" the holy table," " the Lord's table," but to which no other
latpapveel ala ctiaornv eisd evaeltraarare
ffloy ds-t
one,
But
upon here,
which,
1:e
moreover,contrary, we
placed two massive candlesticks, highly curved and richly
gilded ; whilst the animus with which the innovation is in-
troduced, is made yet farther apparent, by the wholly un-
authorised addition of a primitive evidence, as it is termed,
the compilers of our
material sacrifice and offering in the sacrament of the Lord's
sanction the. idea. o. f a
repudiated or side table,
A_ n attempt, it is said,
Liturgy,semi-Papistical
promulgated anew, with r •
doctrine recently **reference to this
supper, abnuottio
*
u essentiallyh ~holly
11
y
since-to introduce these anti-scriptural was
made a short time .
into of the and
innovations one new churches of
anti-protestant
blessed sacrament.
the diocese of London,
and which would have been carried
Bishop of
into effect had not the BtLondon expressed his de-
cided refusal to consecrate the
church, unless the intention
Chronicle.
were abandoned."—Preston