Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1873-11-11
CURRENCY IN GREAT BRITAIN AND
THIS COUNTRY

Liz Ntty L YIN LItOuttts u lue GUn
inst, contrasts the banking system Of
Great Britain and the United States
thus:
Our present troubles may be chiefly ac-
counted for by the speculatiOns and de-
moralization engendered by excessive
issues of irredeemable paper money, our
reckless and thoroughly unsOund habits of
banking, and finally by a babyish depend
ence upon those children in the woods,
President Grant and his Secretary of the
Treasury. The condition Of things in Lon
don, though not as hopeful as could be
wished presents a sharp contrast to that
which has laid Us upon our backs. We
think it will be found instructive to ex-
anime little closely into the differences
between the English and American systems
Of currency and banking.
1T is toleIably well known that in Eng
land 10 paper money circulates of less de-
nomination than five pounds twenty-five
dollaIS). Everything below that is gold
and silver. In Scotland the banks are al
lowed to issue notes as small as one pound,
but the entire bank circulation is not large
in either country. For the last week Of
September the average circulation Of the
English private banks was Sl3,000.000. of
the English Joint stock banks Sl2,O00,O00,
of the Scotch banks S27,0OO,0O0, and of the
Irish banks 81. 100000; total bank note
circulation of the United Kingdom, eXclu-
sive of that of the Bank Of England, SS4,-
100000. or less than double the amount of
our ten, fifteen. twenty-five, and fifty cent
fractional currency! BY the last return re-
ceiyed by mail. the circulation of the Bank
OF England was SlT0,00O,00O, Of which
STj,0OO.000 is secured by Government debt
and other securities. and the other So, 000.-
600 issued against an equal amount of
gold coin and bullion. The amount which
is issued against securities is Tigidly limit
ed to SI5.G00.0O0. while the remainder
varies in exact correspondence with the
gold coin and bullion left on deposit with
the Bank. In fact, neither the Govern
meut nor the Bank Of England has any con-
troll over the note circulation. The issue
department. as it is called. is entirely sep
arate from the banking department, and is
obliged by law to give its note for gold
coin or bullion at a fixed price, and to re-
deem its notes in coin Oh demand. The
money of Great Britain, therefore. consists
of about two hundred and fifty million dol
lars Of paper and probably four hundred
millions in coin. Excluding from the pa
per the one hundred millions issued by the
Bank Of England against gold coin and bull |
lion. the proportion is one hundred and |
fifty million dollars Of bank notes and four |
hundred million dollars in coin. Our mon |
ey consists of seven hundred and fifty mil |
lion dollars Of iTTedeemable paper, about |
fifty million dollars in coin in private |
hands. and fifty millions more locked up in |
the Treasury. We found no argument on |
these figures to prove the redundancy of the |
currency of the United States, but we beg |
or readers to observe that the money Of |
the most prosperous and wealthy nation in
the wcrld is composed Of two-thirds coin to
one-third bank notes.
In England they have no bank notes
Of a less denomination than five pounds
about S25), consequently all currency
below that is gold and silver. As
nineteen-twentieths of the trade
among the masses of that
country is in sums below twenty-five
dollars, their exchanges are for specie.
In this country. in place of wisely re-
our paper promises to S25, or
even to $50 or SO, our Federal Gov
srnment issues them down to ten cents.
While Great Britain has 800, 100000
II coin to 5000. 100000 in bank notes,
We have $3.50 100000 in paper money,
;o-called, to 50,000,000 in specie in the
Federal Treasury and about the same
amount in banks and private hands
This national liberation of rags for cur
'ency is confessedly the most discred-
table feature in our business capacity
md common sense. The officers of
he Bank of England, made wise from
arge and long experience, have raised
he rate to nine per cent, when the
lverage is less than half that sum; and
.he telegraph reports that exceptional
'ates for advances Of ten to thirteen
per cent. were charged by the Bank of
England, Monday. These facts show
now much they fear the loss Of their
,oin as a safe business basis. Our
spread eagle, while legitimately soaring
high, need not fly above the clouds,
and fail as sigually as the Graphic bal
loon that was going to Europe through