Anti-slavery bugle. [volume] (New-Lisbon, Ohio) 1845-1861, 1856-03-08
STERLING EXCHANGE.

We have been frequently requested (says the
Boston POST to ~republish an article compiled with
care and trouble for this paper some yeas ago. 1t
gave the reason WHY sterling exchange is said to
he at n premium of ei sht, nine, or ten per cent, as
the case may be, when it is really at par, or a little
above or below. Our extra copy Of the article is
lost, and we have not found time or opportunity to
turn back to our files. But we may give the gist
OF 1t in a few paragraphs:
when the first Spanish dollars became known
in England, 1t required .tonr AMI .torty. Jour one
hHadreahS only of these dIllars 10 make a pound
Stcritng, 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
IOt more Importance in this matter, neither the
Spanish dollar of more recent date nor the Amer
lean dollar of any date contains nca,ly so much
sitter rs was contained in the early dollars coined
10y Spain. The changes in the quantity Of pure
silver in the dollar Of various Governments have
been numerous but the essential result is, that,
including the minor changes in the relative value
Of gold and silver. it now requires .(6uv and eighty-
t0ur one huHdtedthS of the present dollars-Amer-
lean, Mexican or Spanish-to be worth one pound
Steritng in Liverpool. And as, during the last two
centuries, the actual values lin silver of the dollar
varied from time to time, while the pound sterling
in gold was almost interchangeable, it became con
renlent in England to quote foreign exchange 'at
an advance" when it began TO take more Of these
dcbaSed or diminished doldrS to make a pound steil-
ing. In other words, the English very properly
took their Interchangeable pound sterling as a unit
and measured the changeable dollars by it. The
practice, besur. long before money was coined in
the United States, was continued when this country
adopted essentially the Spanish dollar for it unit
Of coinage. 1t prevails, as is we'll known, to this
day, bat its origin is not generally understood. 1t
is simply the English idea Of the present value Of
dollars, as compared with q par that was the true
one n century or two ago. Should our dollars be-
come so debascd ut some future time that fce would
be required to made n pound sterling, il is obvi.
Gus that the Icot par OF sterling excange, instead
of standing at nine per cent. premium or there
abonts, as at present quoted, would be called
twelve and a half per cent. premium and it is
equally obvious that, if the silver in our dollars
were increased to the quantity found in the early
Spanish dollars, it would require but tOur and
J0yty. four one hundyedMS to make n pound sterling.
Thus sterling exchange would he quoted at par,
and the real and nominal par would again cores
pond. as in former times. Those interested in the
details of the subject are referred to the elaborate
Congressional reports Of 1884, that resulted in an
alteration Of our own gold coinage. The present
manner Of quoting sterling exchange has long GUS
tom in lis favor. Upon the whole, we can see no
better way Of stating it that shall be recognised
and understood both here aud in Europe. Were
the American idea TO prevail, it would be easy and
correct, of course, to say that sterling exchange
was ut par, instead Of nine per cent. in advance.
But, after so long a use Of the old system, the
m evalence Of the American view on both sides OF
the Atlantic is hardly to be expected and the
present mode is, perhaps, as generally ineligible
and easy of reckoning MS that employed in culcula-
ting French eXchange-the only other mode that
suggests itself As likely to be employed both here
and in Europe, il the present system were abol
Iished."