The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1855-11-09

case the bank should hold gai agains- every note in
Circulation and as the naper now eos. IN the country
l. ts3 900 coo, while the gold the bank is only ELL
10000 1t Is evident that nnder existing sys
tenn the idea Of perfect ccuvertbiiiy is but fiction"
Practically however there is fiction in the case and
i capable OF demonstration that under no conceivable
circumstances long The act Of 1874 Is 10 ston
could the supply of IA ut the bank fall short Of the
demand. To carry the internal trade Of the
country certain amount Of currency Is essential.
ny the conversion Of bauk notes into specie AMI the
transmission Of that specie to foreign countries, the
value Of what is left steadily increased The rise in the
rate Of discount thus occasionei universal
my to be pracsed imports countcrmanded exports
stimulated foreign balances called in, and in
short time the exchanges turn in favor, ami gold
flows back upon II Il evident, therefore, that the
amount Of the currency could never be reduced below
certain point without producing pressure for uIoney
which wonld not only infahbly check tho demand for
gold for transportation. but would turn The tide and
cause it TO be sent TO The question arisss-what is
then get the limit to which may safely issue notes
without the necessp Of keeping gold against them tx
perence seemed that f22 OO0 might be taken
o. the total an this adopted by Sir Robert Peel
The BANK Of England consequently allowed TO cir,
the provincial banks Is go on their respons
bty subject to the condition, that in case OF failure
the privilege Of issue should be wilnara~n aro taem
internal circulation Of the country, while all be-
yond that must be represented by gold and consequent
N be liable to uctusions In amount just us the course
Of may bring specie to take II away-these
fluctuations being ecisely the as would occur if
entire circulation wa metallic.
A simple system or clearer principle can
not be conceived The next inquiry is, what is
proposed to be substituted by those who would
sweep it away TN This no halEdosen persons have
been found to agree II IL exactly like the OF
continental revolution where these there is extraordi-
NARY unanimiy wheo the existing ruler is to be
thrown and nothing but anarchy when the new one is to
be thought Of There appears great amount OF OPPOSE
ton to the act but probably each among the thousands
who denounce II would turn in Its favor IL he were told
it was to be done away with without his own peculiar
no cppcs whatever supporters called upon
to meet unless they be expected to deal With each Of
these theorists in turn instead of leaving them to contra
dict each other Never theess the mischief Of the con-
slant cutlery is such that redscusson of the whole
question in Parliament cannot be arranged too soon We
shall then more get upon record the reasons TO
be given for the various suggestions which, in the alb
sence Of examination, are IDLY accepted as cmbody
ing everything that is essential to prevent enterprise
from being checked unlimited expenditure from
being followed by pecuniary arrangement. We shall
learn the motives which should prompt u.s. when gol is
leaving shores account of the rate for money
being lower here than elsewhere to resort to an add
ton "Whv should there not be free trade IN
money in everything esef" will also receive its
solution well as that concerning the nature of
wSr wSe at The same time the axiom put forth this
week by the Birmingham Chamber of Commerce., that
Peel could have worked will be fully brought up
for illust alton will then appear, perhaps that the
to free trade in money that they no reason why the
Legislature should interfere to prevent individuals or
companies from Issuing their premises RON to pay in sny
ing to receive them and that all that is absolutely
tended for is, that these notes should not be made
pei people to accept any set of notes as elui.
valent TO gold, the copveriblity of those notes
at least shall be protected by. an answering
law. In relation to the war, it viii be tod Why
should give the signal for n universal boarding
foreign imports which alone deranxe he balance Of our
revenue and expenditure must be s pal in gold, no
a to
be adopted In the Legitimate form of post notes. bearing
interest instead # by compelling creditors to re ,eye
f1asr .1oi ", mt I'd
effect of the Australian discoveries will be for the inge
nuity of the Birmingham Chamber to explain how the
working of law the principle of which merely to regu
late the relative distribution fgod between this and other
countries coulc have been in any way BY the
existence Inasmuch the fitness Of gold for it's unc.
tons depends upon its relative scarcity, and II half
OF the quantity exiting IN me world owe were swept 1o
to the whole, 1t win likewise be requisite for them, i
they intend to intimate that our circulation has received
any intrnsically valuable addition from these disco
veries to show the In which has been brought
about.
That some notifications of the measure, which
in way affect its principle are open to debate is
admitted. 1t has been questioned for instance
whether in fixing the amount to be issued by the
Bank on securities, the limit Of ETA, 100000
not unnecessarily low, although. supposipg such to be
must be borne IN mind that If raj ed to els 900 600
or any other point considered within the verge OF pru
dence that verge attained the operation could never
be repeated. Some defects have reasonably been com
planned Of with regard to the periods within which the
country bankers compelled to keep the average Of
ous reproach for not having filed up the deficiencies in
the country circulation amounting to f700 0Oo which
have occurred since 1874 through the failure retire.
ment Of individual banks. This however, is fault, not
OF the act but of the several Chanceors of the Exche
quer who have neglected the peca provision contains
for the puip pose:
The circumstance of the act having been suspended in
1e47 s an argument used by those who are unable to
show that has any inherent defect But its operation
suspended At the very moment It had &C.
complshed all that had been anticipated and when
acti,n had palpably commenced the public pro-
missed that in Of need it should be set aside but
this simply TO aay panic In which the loss OF self
IN rational community Sir Robert Peel could forcsee
the natural of the act but he could not oresee
the insane terror which the misapprehen.ion Of Its pos
terror Of the act and not its operation that required
to be pslIiated, was shown by the fact that the
himself at ease; To deal with the public according
to their irrationay 1t to suspend ra
the growth Of belief that BY getting up panic any
time the government may be forced into similar con-
y asked whether 1t would not be better to abrogate the
law altogether, and to indulge the public with expert
what they will be prepared maintain General
anty is more fair for all parties than fixed Ia which
are only fixed long there is no agitation to undo
them.
| Let the act be set aside and one thing is inevi.a
BILE, namely that the amount Of the circulation must
thencefortb be left to the wisdom Of the government
| other Individual body. In fact, the con-
ferripg discretionary power Is what is camored for
Of this discretionary power that compelled Sir Robert
Peel to legislae Instead Of leaving the fortunes of the
munty to be liable peril from the caprices Of ndi
vidual Judgment he paced the corrcpcy of the country
upon footing to be subjected to influences but the
ura Of supply and demand to enable every
trader who would take the trouble to observe the
of tho exchanges to exercise discretionary power for
himself and not to look for II heplessly in official quar-
ters II win be for the people, through their representa-
tives in the next session of Parliament to decide whether
tho responsibility hrown upon them from this condition
Of freedom il than theJ bear and they should
in the affirmative, to select the funconares,
either at Downing street at the Bank that shall for
the future have the control Of their fortunes and be
sponsble for the prevention or mitigation OF all financial
l troubep.
THE PRESENT STATE OF COMMERCIAL AFFAIRS.
The Council Of the Liverpool Chsmbe(Dpf Commerce
have been engaged In discussion of TN present STATE
Of the monetary system which brought under their
nace by reqsiticn from number Of the leading mer
chants Of Liverpool asking the Chairman Of the Chamber
to call meeting TO afford the commercial public op
portuniy Of expressing their opinions The discuss