The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1844-06-07


you have determined that silver shall perform the
lower Office OF gold throughout England and Wales,
90 hope that nothing will induce the house to dis
.aro Inc relations which exist In our monetary sys
tenn: That which we have in operation new is in
conformity with the views and the opinions OF one
whe, In my judgment, is the greatest recent author
NY on the subject of coin-I mean the first Earl OF
Liverpool, who, in his letter to the King-a letter
which contains as much good sound sense as any
publication which has ever issued from the press
urges as strongly as possible the adoption as our
principle of coinage OF the very principles which
are established among u.s. Lord Liverpool, after
giving the subject great consideration, writes In
1904 to this effect -'' After full consideration OF
this extensive, abstruse, and intricate subject,
opinion First That the coins of this realm,
which are to be the principle measure OF property
and instrument OF commerce, should be made
OF one metal only. Secondly, That in this
many years past, and are now, in the practice and
opinion of the people, the principal measure OF
property and instrument of commerce. II has been
shown that IN IN country like Great Britain so aus
commercial connections, the gold coins are best
adapted to be the principal measure of property in
this kingdom, therefore the gold coin is now the
principal measure OF property and standard coin,
as 1t were, the sovereign archetype, by which the
weight and value OF all other coins should be regu
lated. 1t is the measure of almost all contracts
and bargains and by it, as measure, the price
of all commodities bought and sold is adjusted and
ascertained For these reasons the gold coin should
be made as perfect and kept perfect as possible.
Thirdly, 1t is evident that where the function Of the
gold coins, as measure of property, ceases, there
that Of the silver coins should begin and that
where the function of the silver coins in this res
pect ceases, there that of copper should begin. 1t
is clear, therefore, that far only these silver and
copper coins should be made legal tender and no
further, at least not in any great degree; and it
follows that the coins both of silver and cop
per are subordinate, subservient, and merely
representative CONS, and must take their value
with reference to the gold coins, according to the
rate which the sovereign sets upon each of them"
This Is exactly the principle which at present regu
lates our currency. The adoption of gold instead
OF silver standard has been determined upon Tor the
considered mere subordinate or auxiliary coin
an arrangement which, think, is the best that can
be made tor the security OF your monetary transac
tons think that system which gives man with
d. note the command of gold whenever he pleases
to apply tor 1t affords greater security for the du
ration OF settled convertibiity than that system
which obllges man who has l0N in gold to take
It to the Bank and get 1t EXCHANGED tor notes. |
have been told that the paper system is better cal
cuated to diminish panlcs, and to give greater Sc
curity to public confidence; but in my judgment
the best guard against political panics is to have
gold coin a1 1 throughout the
mine the measure OF value, and the right which
the country has. to regulate the coin, SO far
as it is the medium of exchange. l now come
to that part which is the immediate subject of
my motion. / may here be allowed to state
the principle which should regulate paper circu-
latlon. refer to prOmlssory notes, payable to
bearer on demand, must be understood to speak
of them, only. When ! speak of money, mean
the coin of the realm; when Of paper currency. l
mean a promissory note, payable to the bearer, in
the coin OF the realm, on demand. will not trou-
bic myself or the house by referring to the vast va,
riety of other descriptions of paper / will say
little or nothing on the great question which has
been discussed so often by the bank committee, as
to deposits, cheques on bankers, or bills Of ex-
change, partaking of the nature of credits These
securities perform different Office to that of pro-
missory notes. Promissory notespass at once from
hand to hand; no personal guarantee is required
they do not require an endorsement; they perform
the functions OF money; and their operation is, In
fact, the same as that Of money. do not say that
the various transactions connected with paper credit
and the circulation OF paper have not an effect on
the supply OF the precious metas-l do not deny
mize the quantity of precious metals; but the only
consequence OF this is, to strengthen the necessity
tor keeping up the amount OF precious metals IN
another way. There may be an amount OF
hve or SIX millions given to other markets,
but this circumstance will alter the value OF COM
modties in relation to the value of gold to such
trifling extent that il 10 hardly worth taking into
consideration think all experience shows the
necessity OF not allowing paper issues to become
too large. Twill refer to some instances IN support
OF this position. AT an early period of the his
tory Of the Bank OF England, about 100 years ago,
when public opinion was so far in favor of its sta
blity that the shares opened at GO and went up to
ll2,-at this early period Bank paper was so much
deprecated that guinea, In relation to Bank
note, was worth 30s.-silver was deprecated in
and the dd ian De
in this emergency? What did the Bank do, after
having advanced large sums OF money on mort
gage, made loans to government, lent money on
goods sent silver abroad and by these proceedings
elevated the price of the guinea to 30s. I? The d.
rectOrs took the opinion OF the most eminent men
of their time and, after due dellberation, they,
at all risks, determined to diminish the amount
of the notes in circulation. The result was, that
the monetary balance was re-established, and the
exchanges were restored to favorable position by
the simple action OF their proceedings on the opera
lions OF commerce. In the history OF the Scotch
banks the state of things will be found to have
occurred. The exchanges were greatly unfavora-
BILE to the Scotch banks. The directors said that
the promissory notes were only part OF their paper
circulation, they were the same their notes, and
they said it was impossible to NEEDLE with their s
sue OF notes. But as this state OF things could not
go on they at last adopted the course taken by the
Bank of England when in situation OF similar en-
barrassment-they diminished the number of their
notes, and the same result was the consequence.
Now the same principle will be found in operation
IN the case OF the Bank of Ireland. Some years
ago il required fI8. of Irish bank notes to make
purchase OF 10W. Bank of England notes. The
price of Bank of England notes was Of much
greater value in comparison with Irish bank
notes. committee was appointed to consider this
subject The Irish Bank directors denied there
llad Deen any over-lSSue OF notes on their part
they declared they had only issued Just so much as
had been demanded by the legitimate course of
trade. Hear. But the committee told the direc-
tors there was no possible way OF restoring the ex-
change to par unless they diminished the amount
Of their notes The directors were at first reluct
ant to adopt this advice but the exchange still
continued unfavorable, they said at last, let
duce our circulation and accordingly they did
reduce their amount of issue from e., zoe, 900 to
100000, and the result OF this step was that the
Irish bank-nete speedily attained its original value.
Hear. Does not this show, then, that notes pay
able on demand exert an influence on the exchange,
and on value, which notes of other sorts and bank
ers' checks do not 7 So, therefore, / say, do not
attend to those writers speakers who say that
bills OF exchange and similar sorts of paper circu.
that if these bills were presented for payment the
Bank could not meet the demand; therefore it is
of no use adopting regulations with respect to
promissory notes. unless YOU extend these requta-