True American. [volume] (New Orleans [La.]) 1835-18??, 1837-03-17
EXPLOITATION OF GOLD.
H. Liverpool, Dec. Sd. 1886.
To THE EDITOR OF THE ALBION.


By being always buyer Of Gold when at n
shade under the Mint price, she prevents stock
accommodating until part is forced to the Mint to
be coined, aad as coin to 60 into circulation. This
coin would increase prices, but it would force out
OF circulation Paper, if Of both together there was
more than the public wanted This would de-
crease the circuat on of Bank of England Notes.
but increase the amount of Deposits. The Bank
OF England, on the "satc and sound" principle laid
down by Mr.. llorsley Palmer, as explained in INV
letter of the 26.h September, considers, that her
circulation and deposits may safely be allowed to
amount 10 thrice the of Gold in her Golfers
BY buying Gold, SHE acquires the base on which
70 found an increased circulation. To effect this,
she increases her issues, nancy becomes pleuii-
iul, easy to be drained, the rae of discount is
lowered, The quantity OF capital obtained in lhr
Shape OF crecit on commercial bills multiplied, and
a much greater rise in price is produced 'lhan
would have occurred had the Currency been CON
tned TO G"ld.'' This hastens and aggravates the
evil that will be the natural effect of Exporta-
tion Gold
When Gold from hi.h prices or other causes is
Exported, The Bank of England Looks calmy on,
and as the experience Of 1926 and the present year
SHOWS, waits until the drain upon her for bullion
Is SO great that, instead of holding the amount of
one 'h'rd OF her liabilities to pay on demand, she
does aot hold above one-sxth. She then awakcs
Ike man out OF a sound Sleep that finds his
house on fire.
She should, by the sale ofSecurities, have absorb
ed her circulation gradually Gold went out of
the country. that the natural effect Of an Exporta-
non OF Gold might have been felt on prices; but
| she should have pported credit by DISCOUNTS
that the effects prices, the result of our ar!fci
system, should not be felt only very slowly, that
all men might be assisted fulfil their m entarv
| engagements.
On the contrary, instead of essening the circu-
lation, she contracts discounts. With liabilities
20 pay on demand 80 millions, and stock of Cold
OF millions, the base of only Is millions, Con the
''snte and sound" principles Of Mr. ]. II. Pamerl
she exerts her giant strength with Is million
power, 10 produce, suddenly possible n ssscar-
city of moneys and sfall in prices,n that ought
only to have been the result of an Expectation OF
Gold TO the extent Of IS millions! This sudden
this ''only rameiy' is a dreadful aogravnon to the
ordinary evils resultisg from artificial system
of credit, by the E1noraon of G ald, and is vo.
la'ion of the duty of the Bank Of England, as on
planned hv Mr.. Ward, for il is ga pernicious effect
That you'd not hare occurred had The Currency bee,
eoafnei to GOa.'
How the United Banks of England" would ac
in the event Off demand for Gold for Expectation
| have shown in my letter in the bon of the
28'h November. size would work like the tspow
full body commanding and regulating the crcu.
lang me sum" herein supposed She woulo
strive TO mitigate the evils resulting from our ar
,ifical system of credit. And why? Because
being governed by the Banks and Bankers, he
constituency, they would use her power to produc,
", to assist their customers, that is, the publ,
generally, to fulfill their engagements, to pay the
accrptanccs, that the Banks might have no .bat
debts, and, therefore, might make ''good divi
dens."
She would lie, the natural e1tc, of the exporta
ton of Gold be felt on prices by hsr reduced cir
rulatioa, but she would wari off the artificial eff
fhcts resulting from violent reduction of credit
She would throw in the whole power of her cnp
ital 10 continue discounts until existing engage
mens were of, and facilitate the renewal o
those which could not be immediately fulfilled
Thus, time would be gnined, and the reduction o
the amount of mercantile bills be effected grad
ualy, assistance might be procured from abroad
cargoes would arrive, the natural effect of The Elk
Poraiion OF Gold would operate through the reduc
ton of the circulation, and, in the end, ssa sufi
Glen, quantity of Gold would return to pu, us on
par, as TO album! lance of circulating medium an
prices, with the commercial world generally, an
especially Europc.''-I remain, Sir, yours rcspcc,
fully. A LIVERPOOL. MERCHANT