Wilmington journal. [volume] (Wilmington, N.C.) 1844-1895, 1856-02-08
Sterling Exchange.

We have been frequently requested to re- publish
article compiled with care and trouble for this pa.
per some years ago. 1t the why sterling
exchange is said to be at premium of 8: 9, or 10
per cent, as the may be, when it is really at
par little above or below. Our extra copy Of
the article is lost and we have not found time OPP.
portunty TO turn back to files. But we may give
the gst of it in few paragraphs.
| When the first Spanish dollars became known in
England, it required four and fortgfour one hun
dTedts, only, of these dollars TO make pound Ster
Ing, according TO the then value of silver and gold
Since that time, the relative value of the two metals
has been slightly altered, but, what is of more I'M
portance in this matter, neither the Spanish dollar f
more recent d"te nor the American collar of any
date, contains nearly much SCe1 as was contained
in the early dollars coined by Spain The changes
IN The quantity OF pure silver in the dollar Of var-
Gus governments have been numerous; hut the es-
sentia result is, that including he minor changes
the relative value of gold and silver, it now requires
four and eighty four hundredths of the present
dollars, American, Mexican or Spanish to be worth
one pound Stering in Liverpool A1d as, during the
last two centuries, the actual value n silver of the
dollar varied, from time to time, while the pound
sterling Gin gold almost Interchangeable, it be-.
convenient IN England 10 qno foreign exchange
at an advance,' when it began to take more Of these
dcb0scd diminished dollars to make pound steI1 O.
In other words, the English very properly took their
Interchangeable pound sterling unit and measured
the changeabe dollars by it, The practice begun
long before money ~oined in the United States,
W&S continued when this country adopted essentially
the Spanish dollar for its unit of coinage 1t pre-.
walls, is we'll known, to this day. but its origin is
moi generally understood. 1t is simply, the English
idea OF the present value of dollars as compared
with par that was the one a century or two
ago Should our dollars become so debased, at some
future time, that fire would be required TO make a
pound sterling, it is obvious that the real par of ster-
ling exchange, instead OF standing at per cent pre-
MUM or thereabOuts as at present quoted, would DE
called 123 per cent. premium. And it is equally OBJ
vous, that if the silver in dollars were increased
to the quantity found in the carly Spanish dollars, 1t
would require but four and forty.to onehundredhs
to make pound sterlng Thus sterling exchange
would be quoted at par, and the real and nominal
par would again correspond, in former times
Those interested in the details of the subject
erred to the elaborate Congressional Reports of 1884
/ that resulted IN alteration of our own gold coin
age. The present manner of quoting sterling ex-
change has long custom in its favor. Upon the
whole, we can see no better way of stating it that
shall be recognized and understood both here and in
| Europe. Were the American idea to prevail, Il
would be easy and correct, of course, to say that
sterling exchange was at par, instead of per cent
/ advance But after so long use OF the old system
| the prevalence OF the American view, on bob sides
of the Atlantic, is hardly to be expected And the
present mode is, perhaps, as generally intelhgble
ard easy of reckoning as that employed in cacula
| ing French eXchange-the only other mode that sug
gests itself likely to be employed both here and
/ in Europe, if the present 81 stem abolished.
Boston Post.