Loudon free press. (Loudon, Tenn.) 1852-1855, 1853-10-21
From the New York Courier and Enouirar

Vi HiSt PlihCiPieo % cSSeitidi to the lnVeStlga-
ton of every subject. The position you assume
that bills of exchange are money is essential,
and must be accepted or rejected before we can
proceed. If they are money then we have an
important addition to our subject, which must
receive its proper attention.
We are aware that in the discussion of the
subject in England in former years, the posi-
ton you take was adopted to some extent and
it is adopted by Mr. f. Peshine Smith, in his
late work on Political Economy, but we believe
it is not general and feel confident that al pres.
ent there is little authority for the position
which involves the subject inextricabe difficult
ties; for if bills of exchange are money, then
its quantity, which is its essential quality, can
never be determined; it has escaped from all
our knowledge, ard all control of law, and its
investigation may be abandoned in despair.
1t is true that bank credits, whether circula-
ton or deposits are, like bill of exchange, the
mere evidence of debt, yet the latter do not like
the former pass freely as money, they are no
more money than notes of hand, puplic or cor
porate stocks, bonds and mortgages or book
accounts; these all may perform function. of
money, the tranfer of wealth, but only by
specific arrangement that they be taken as a
substitute for money. In the same way, any
form of wealth may perform this function of
money, but none of them are competent to the
performance Gifts more important function, the
measure of value.
Our position on the other hand is that money
is that specifcthing either capita, gold or bank
credit, which by law or custom determines the
value of all other things, and transfers them
without further negotiation from hand to hand;
which is the rule of all existing credit, and the
only legal means of its extinction In is obvi-
Gus that quantity is its most important character
! istic, for it is by the relation which exist be-
tween the quantity of money in all, and the
quantity Of corn ODDITIES to be exchanged or
credits to be extinguished, that it becomes a
measure; but if bills of exchange are money,
then we have only to multiply them at plasure
to obviate any difficulty which a scarcity Of
money may create, or in other words, money
can never be scarce while we can draw bills of
exchange.
1t seems hardly necessary to pursue the sub
jet farther, for the position is so contrary to all
our experience, that it must, we think, be aban-
doned.
PAR.
The crowded state of our columns for some
days past has precluded the insertion of the
insertion of the above communication from
PAR.
Our remarks in reference to "Bills of Elk
change" as circulating medium. applied
more particularly to this branch of currency as
existing in great Britain and throughout other
commercial portions Of Europe. In this coun
try, where bank paper is manufactured more
readily. and in some States without limit, and
enters so fully and generally into circulation a:
medium of payment, bills of exchange are
not so freely adopted for currency as they are
; in Europe. But yet it will not be denied by
exchange form very large fggee BAP9 Of the aetua
circulation of the country. We include, under
this head; bank drafts and bankers sight anc
time bills, as we'll as ordinary com mer cial bills
That all these do in fact enter largely into cir
culaton mat be seen throughout the South and
the West. Imagine for once that such paper
could not be created or that it should be illegal
how much mere bank paper would be required
to accomplish the ends now performed by bills
Of exchange?
as at present in circulation among the several
States, three times that sum would be deman
ded for the purposes of internal commerce.
From testimony furnished BY Mr.. Lewis
Lloyd, of the firm of Jones, Lloyd and Co., Lon
don, it appears that the circulation of Manches
ter (England) consists of nine parts bills of ex-
change. and the tenth part gold and Bank OF
England notes. Other bankers who were con-
suited on the subject wide Bankers, Magazine,
New York, 85l y throught the proportion was
still larger-say twenty to one, or even fifty to
one Mr. Lovd stated that he had seen bills OF
9lO with one hundred and twenty endorsements
upon them.
Mr. Leatham, an old banker near London, ex-
amined this subject critically, and by means OF
official return, obtained by the aid of Lord
Morbeth, published an estimate of the amount
! of bills of exchange in circulation in Great
Britain and Ireland at one period.
1t was also ascertained that tn e average time
of circulation of the bills was three months
Divide the sum of any year by 4, it will show
the actual circulation at any one period. Thus
the aggregate for the year 1889 was e52S,593,-
900, and one fouth of that sum was the proba-
BILE amount in actual circulation at any one
time of the year, say el32, l23, $50 or about six
hundred and fifty millions of dollars.
According to official statements recently Is
sued, it seems that the actual bank note clrcu-
laton in Great Britain and Ireland, lin which
we include that of the bank of England) is less
than forty millions of pounds sterling or less
than one third of the circulation of bills of ex-
change in the country furteen years since.
Mr. Gladstone NJ. P, in his evidence on the
subject observed:
''If sell thousand pounds, worth of goods