The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1837-08-19


of the resumption OF specie payments by the bank tho
enlightened Of England REQUIRED to the pro
hbhion of all notes under the denomination Of five
pounds This return to sound policy, however, was
not accomplished, has il been maintained, without
enoounterng strenuous and perseyerng opposition
There is something instructive in the history OF
this reform of the currency in England, that Il deserves
TO be traced somewhat more III detail In 1872 law
passed directing complete resumption Of specie
payments by the bank in three years TO wit, 1922 and
at the time It enacted that IN two years after,
In 1924, all small notes under the denomination Of five
pounds should be prohibited. The first provision
carried fully into effect at The designated period but
such the influence Of the country bankers and other
associated interests that before the appointed time for
the suppression Of the small notes arrived, the latter
provision repealed and the final suppression Of the
small adjourned to 1888, the year Of the
piraon OF the charter Of the Bank Of England But the
great commercial convulsion Of 1925 which swept banks
merchants farmers every thing before IT, with tho de-
structivc fury Of tornado, after occurred and
forcbly admonshed the British statesmen Of the neces-
sity OF seeking remedy-n part. at lcast-ln more
solid constitution Of their currency Accordingly, in the
beginning Of 1926, Lord Livelp pool and Mr. Robinson,
the the First Lord Of the Treasury, the other the
Chancellor Of the EIchequer introduced and carried
bill providing for the prohibition, after April 1929, Of
all small notes under the denomination OF five pounds
This hw slouy and zcalousy opposed at the time
of enactment and repeated attempts subsequent
y made 10 procure its repeal before the period fixed
for its operation. But these efforts happily
yang; and the doctrine Of Adam Smith, in regard to
the prohibition Of all under the denomination OF
FIVE pounds reesabshed in 1929, after experiencing the
bitter fruits Of temporary departure from It, may
he considered rs the final and settled policy Of the Br
fish Government II has received the sanction and sup
port OF her ables statesmcn-of Liverpool, Of Peel OF
Canning, Of Huslisso, Of Brougham Of Wellington !;
all OF whom upon the fullest experience and consdera-
ton, have. from time time borne their testimony
the value and importance OF this essential restriction
upon paper circulation
And what has been the result in practice Why, to
give to the people Of England virtually metallic cur
rency; for gold and silver form there the daily habua
medium Of all ordinary transactions. bank note,
cep special occasions is sort Of phenomenon. On
this point have precise information 1t appears, from
statistical returns referred by the Chancellor of the
EKchequcr in the House of Commons, few years ago.
that the amount ofgod then in circulation 49,
900, 900 TWENTY-FIVE millions OF pounds serlng( and of
silver Is, 600 600, (eght millions Of pounds s,erlng.)
do not speak Of gold and silver locked up in vaults Of
banks but of that which passes daily from hand TO
hand, in the ordinary transactions OF business Mr..
Gallatn, in his instructive pamphlet the currency,
published in 1890 states the metallic circulation Of Eng
land at precisely the same amount. Allowing nothing
fH augmenta SINCE the people OF England have
then, actual circulating medium OF gold and silver to
tia, amount OF about hundred and fifty millions Of
dollars The Secretary Of the Treasury, {whe, doubt
less. has to the most authentic Of in
formation on the subJect) In his annual report at the
a the session, states the whole paper
ejaculation of England, at this time, at hundred and
ffy-two millions OF dollars. We may, therefore,
csIdc that what Mr. Galan says in the pamphlet Just
rsaerredto. substantially correctthat '"by the sup
pcsson Of all OF less denomination than Is ster
Ing, tho OF the circulating metallic currency in
England has become equal that OF bank notes of every
description" One-half Of the entire circulation
of gold and silver, constantly passing from hard
Ia hand and performing all the Offices Of exchange in
the ordinary business Of life, and thus forming, in fact,
tire practical currency OF the country IL IS this large
infusion OF The precious metals which has preserved the
csrrcncy Of England in the main, in healthy condition.
uaer system Of banking which her Prime Minister him
self Lord Iverpocl,) in 1895 pronounced to be, N
other respects the most insecure the most rotten, the
wsy worst, which 1t is possible to conceive Much
has been SAID recently know, Mr. President OF great
commercial embarrassmens in England, which at
trhuted nv many to deranged Of her currency
These eInbarassmen,s, IN my opinion, are viewed IN
mach too serious light but if they not 1t mus. be
borne in mind that al commercial countries, heweuer
SOLID the constitution OF their currency, will occasionally
be visited by revulsions trade IT. too, they be
considered indicating arrangement IN the currency
of England, the Of that arrangement is to be
found those defects of her system OF banking which
referred to by Lord Liverpool as makngit so inse
and precsrlous and not surely, IN that sautary
check- the prohibition OF sma notes On the contrary
the alb undance Of gold and silver which that restriction
in the common circulation Of the country Is the
giea preseave Of the system, and the anchor which
cnab ii to ride in safety amid fluctuations aud tenn
pests that mi ht Otherwise ovswhelm or subvcrt H.
1t l this abundant supply Of the precious metals, fill
ing I'd saturating the ordinary channels OF circulation
which desire 10 see brought about in coun-
try That is the end to be aimed at. What are the
meG1ss by which 1t is to be accomplished We have
seen that in England has accomplished by the prohi-
blt'on of all bank Of less denomination than l5
SiIni!a ar WILL doubtless, accomplish the same end
here and, must add noting else mil, Il in vain
to bring gold and silver coins into circulation
with' 'ut previous suppression OF all notes OF cores
pond ng determinations. The reason is obvious. If
there exist m any country two distinct currences both
of the answering equally well the purposes OF doines
tic ci collation. but Of them possessing only local
vahe confined to the country OF its emission, while the
other has universal and equal value throughout the
worh in quest Of the riches and productions OF foreign
iatio u.s. leaving the former home to perform Of
flee which,, does equally well, though 1t would be
Who'll y without use OF value abroad The total ncom
path ty therefore, OF paper and metallic currency Of
the same denominations has grown into an axiom
Edm und Burke, (whose sagaclty in questions OF this
sort well known at the memorable period OF the biil
brou ht forward by Mr. PITT for the suspension of specie
payr by the Bank Of England in 1884 in letter
writ en- during his last illness, to Mr.. Canning which
the after gentleman brought most tonchngy to the no
tice OF the House OF Commons, III debate OF great
inter and instruction this whole subject at much
recent period, QS26,) used these memorable
word Tell Mr. Pit, that, If I've consents to the issue
OF o. ,e-pound notes, he will never see guinea again
The prophecy. sir, became history. NO ono saw
gum ca IN circulation IN England while the bank con
tnu' I'd the Issue OF one-ponnd notes.
III 1923, when a great struggle again took place IN
the British Parliament on the final contamination OF
the ion rrsore metallic currency, there not a
sing distinguished who did not bear his testimony
to I'll @ truth Of Mr. Burke's axiom The Chancellor
OF III C Exchequcr said, that OCCASION there was
natu raj anpahy between tive onc-pound note and the
reign. They would exist together, for the note
drove the sovereign out Of circulation" The
Duk of Wellington, who was emineny rractca
and spoke from the teachings of experience sald
tho experience of the last few years had proved the
truth Of the theory that one pound notes and gold
sove roIgns would circulate at the same time, If