The Liverpool Standard and General Commercial Advertiser.
Liverpool, Merseyside, England, 1850-04-09 00:00:00

POLITICAL EXTRACTS.

FREE TRADE IMPOSSIBLE UNDER A RESTRICTED CUR-
RENCY.—Liberty is favourable to production ; therefore,
whatever restrains production is an unwise policy. Trade,
therefore, ought to be perfectly free, but so also ought the
instruments by which trade is carried on. Were Parlia-
ment to enact a law permitting ships to be constructed of
any tonnage or draught of water, and at the same time
enact another law limiting the depth of water into which
ships might be launched, it is plain that the two laws
might be antagonistic, and that the construction of a lar-
ger class of ships would be prohibited ; but not less absurd
is it to proclaim the principle of free trade as a rule of
conduct, and prevent that principle being carried into ope-
ration, by limiting the monetary instrument of exchange;
for the circulating medium of currency bears the same re-
lation to the distribution of commodities in the markets of
exchange, as the floating medium of water does to the na-
vigation of ships. Withdraw currency, trade stagnates ;
withdraw water, the ship is stranded. Therefore, free
trade in commodities, without free trade in money, is fal-
lacious in theory and a contradiction in practice. Free
trade evidently implies more trade than can be realised
under a system of protection, or recent debates in Parlia-
ment must have been an idle waste of words. But it has
been shewn that trade can only be carried on by the aid of
currency, unless we return to barter ; more trade, there-
fore, requires more currency. Nevertheless, Sir Robert
Peel, Lord John Russell, and Mr. Cobden, the champions
of free trade, all insist that the trading and commercial ,1
classes shall only use a stringently limited number of
monetary instruments, while they promise those classes a
prodigious augmentation of business. These gentlemen
commit the mistake of willing the end and refusing the
means. What judgment would the shareholders of a
railway pronounce on the sagacity of their directors, who,
having published in their report a confident assurance of
increased traffic, refused to increase the number of their
carriagei, wagons, or locomotives. Yet such directors
would not be more foolish than those advocates of free and
more trade, who persist in the use of metallic money,
which is inexpansive in its nature.—Tract No. 5 of Na-
tional Currency Reform Association.
THE ANOMALY OF ABUNDANCE OF MONEY ATTENDED
BY COMMERCIAL AND INDUSTRIAL SUFFERING.—It is a
fallacy to suppose that a heavy accumulation of gold in
the cellars of the Bank of England, a low rate of interest,
and millions of unemployed bank notes, are proofs of
mercantile prosperity. When foreigners leave our gold
and take payment of their imports in goods, it clearly
proves that our.goods are cheaper than our gold, and that
the producer can not add the tax to the intrinsic value of
his commodities. It is a state of low wages and low pro-
fits, inducing that kind of cheapness which is expressed
by a great deal of labour for a very little money. The
phenomenon of money being a drug, while the people are
pennyless, has been admirably described by Mr. Thomas
Attwood, and to those who unfortunately are unacquainted
with his writings, the following statements will be as novel
as they are unanswerable :

" The rise of the value of money in its principal is attended
with a correspondent fall in the value of its interest or use.
The money which exists in the country, instead of being scat-
tered and diffused generally throughout the general uses of
industry, is disproportionately drawn up from those uses into
the money markets of London ; and there it lies, inactive, in
the hands of bankers, and brokers, and retired capitalists ; or
it is employed in jobbing and dealing in the public funds, or in
lending upon short and undoubted securities, where few are
willing to borrow, and still fewer are willing to employ. The
money of the country, instead of being employed throughout
the country in enabling the population to produce and consume
the masses of their own, and of each others' productions, is
drawn up from those great and vital operations, and is deter.
mined in masses into channels where its holders have not the
means of employing it themselves, nor the confidence to lend
it permanently to others, who, in their turn, have not the con-
fidence necessary to induce them to give it operation. A kind
of apoplexy is thus promoted in the circulating system; the
head is deluged, whilst the great limbs and interests of the
country are starving. The money market is glutted in the way
of temporary and secure loans; whilst the markets of property
and labour are everywhere deficient in that supply of money
which is necessary to give ' remunerating prices,' to enable the
property and labour to interchange with each other, and to
discharge the debts, taxes,' and obligations imposed'on them.
It may, perhaps, be asked, how is this apoplexy produced,
and by what means is the money of the country determined
into the money markets of London? By what means is the
money sucked up from the employment of industry, and from
working the great processes of production and consumption,
in order to glut the markets of interest, and there to lower the
interest of money, at the same time that the principal of money
is raised in value? To understand this clearly, clear ideas
must first be obtained. The principal of money must be essenti-
ally distinguished from theinterestot money; or, in other words,
the purchase or ownership of money must be distinguished
from the mere borrowing and lending of it. In one case, the
ownership •of money is transferred in exchange for property or
labour. In the other case, the mere temporary use of money,
or the mere right of employing it for a short period, is trans-
ferred in exchange for some given rate of interest per cent.
Entirely different as these two operations are, nothing is more
common than to see them confounded together in men s minds.
The :banker, the broker, and the jobber speak of the plenty of
money; and they mean thereby the facility of borrowing it
cheaply upon good securities. • But when the farmer, tLe ma-
nufacturer, and the labourer speak of the plenty of money,
they mean thereby the facility with which their consumers pay
them their debts, and with which they obtain good prices for
the sale of their' agricultural and manufactured produce and
their labour. ' This kind- of plenty of money,. this facility of
acquiring the .ownership of money, may exist, and sometimes
does exist, at the same time when a great scarcity of money is
found to exist in the market where the use of money is borrowed
and lent; and, eke nersd, the plenty of money in the market
of interest, may exist (and ,does now exist) at the same time that
a great scarcity of mouey exists in the markets of property and
labour, where the ovvneirshy of money is bought and sold."
—2:rad Aro..sq/"Raiimeal Currency Worm Association.