On this page

• Text (1)

  Note: This text has been automatically extracted via Optical Character Recognition (OCR) software. The text has not been manually corrected and should not be relied on to be an accurate representation of the item.

  • 

    Untitled Article

• Transcript

  • Note: This text has been automatically extracted via Optical Character Recognition (OCR) software. The text has not been manually corrected and should not be relied on to be an accurate representation of the item.

    Additionally, when viewing full transcripts, extracted text may not be in the same order as the original document.

    Untitled Article

    useless . A system of currency , to ] "be successful , must afford at all times and in all places the greatest possible facility to interchange . That is the ultimate test of its success , whatever elements may go to its composition : no other test can be frnal , and if to apply this test be within our power , it is idle to resort to any other . The most importaut step in effecting an Interchange , whether of commodities , services , or privileges , is that of accurately measuring tlieir respective values . _ Thus , in order to ascertain the total value of certain goods estimated by weight , we may require to know , firstly , the precise number of pounds avoirdupois they contain , and , secondly , the precise Talue of each pound weight of the commodity . "We cannot do this , unless for the first purpose we have an accurate standard of weight , and for the second

    purpose an accurate standard of valu « . One Is just as necessary to a correct result as the other—uncertainty in the pound weight could not more effectually vitiate the result than Avould . uncertainty in the pound sterling . The like is equally true as to quantities aseertainable by measure—linear , superficial , or cubical . A . piece of cloth may be-measured for fifty yards , and the value of each yard be estimated at a guinea . We assume that we know the exact length of the yard measure , and the exact value of the guinea , and we pronounce the cloth to be worth 50 guineas . But if any uncertainty attach either to the length of the yard measure or to the value of the guinea , the result must necessarily be

    uncertain . The complexity of many of our transactions spreads them over great lengths of time—annuities , rents , &c , are instances—and any change ( intermediately ) in the value of the standard unit of the currency changes the virtual terms of all these contracts . It affects also all debts , taxes , salaries , wages , &c . Lord Overstone ' s plan has the grievous defect of neglecting this most important consideration . Lord Overstone seems to have been unaware that , whilst engaged in cementing the alliance between our paper money and its metallic basis , it was most important to guard against disturbing that basis itself . So far , indeed , from endeavouring to shield

    the metallic base of our currency from the disturbing influences by which it is liable to be assailed , or trying to break their force , if circumstances should rouse them into action , Lord Overstone exj ) ressly counts upon sudden , extensive , nay , even dislocating changes in the value of . our standard ' unit , the pozvnd sterling , as the necessary and proper means of carrying his purpose into qffect . But if the coin change its value , so likewise must the paper which is . bound up -with it ; 3 ris plan for preventing the paper from varying in value , therefore , defeats itself , like that of a mariner , who , in mooring his ship to a buoy , should so blunder in his mode of doing it as to loosen the moorings of the buoy itself .

    We charge Lord Overstone ' s plan with this grievous error , —an error , too , committed in the face of the success of the French , Scotch , and Irish systems , which , based upon sounder principles , and gifted with superior freedom of action ( though still far from perfect ) , had vindicated . their superiority by their successful resistance to the commercial storms under ¦ which the English system of banking monopoly and legislative meddling had succumbed , and which again , in the great convulsions % f 1847 , kept their ground firmly , although standing so close to England as necessarily to feel the throes by which she was then convulsed . Indeed , Prance and Scotland , so far from sharing the danger and difficulty into which

    England was then plunged , were able each to hold out a hand to extricate poor England from the slough into which sho had fallen . England is accustomed to help others , not to ask for help lierself ; nor would her case have been then so lamentably reversed but for her absurd bank-monopoly , and her blundering currency legislation . If the success of one set o principles , and the failure of another set , were ever placed in strong , unmistakable contrast , it surely was in the year 1847 , when we witnessed the triumphant success of monetary freedom on the one hand , and . the utter failure of monopoly , " central

    fiance , or surely the insufficiency of theOverstone principles , and the sufficiency of the contrary principles , must have been admitted long ere this . The recent monetary misfortunes of France , too , contrasted with her long previous immunity therefrom , and coupled with the fact that within the last two or three years she has unluckily let go the safeguard which she had so long enjoyed ( apparently without perceiving its extreme value ) , would seem enough to startle even the hardiest theories . Lest I should here speak of what may not be generally known , allow me to explain that until recently , although the French legal standard money was of silver , gold might be legally tendered in payment , reckoned , however , at its

    market value in silver . Upon occasion , therefore , of a pressing demand for currency , the French were free to use gold , in any procurable quantity , —in aid of their silver , —thus dividing the pressure between the two metals , instead of alloiving ( as we do ') its un-Urohen force to Jail upon , one alone . Every one can judge of the comparative ease with which a divided force may be borne , even in cases wherein , if undivided , the force might prove overwhelming . Now this excellent plan , —by which , in times of necessity , the one precious metal could aid the other , with a complete avoidance , be it- observed , of the evil of a double standard , — . was denounced and resisted by Lord Overstone in his reply ( now republished ) to the " Merchants and Bankers' Petition ; " which complained

    that when in October , 1847 , we were scrambling for gold as for our lives , and an unusually large supply of silver came in from the Pacific ( which , by the exercise of a little ingenuity , might have been made of the utmost service in eking out the insufficient gold ) , it was found that the theorists had barred the way , and thus , even in the midst of our direst necessities , ^ vitli the successful tise by the French of a similar remedy actually before our eyes , prevented our acceptance of the timely relief . And at last , as though to push absurdity to the uttermost , these same theorists , whilst refusing to issue notes upon the security of the silver so opportunely received , determined to sanction their issue without the security ofanntltinn of any visible kind whatsoever .

    -To return . As to the quality , which , before all others , a good currency must posse 3 S , the most important function it exercises being that of measuring the values of all interchangeable articles , common sense must surely decide that unchangeableness in its oxen value , i . e . in the value of the gold of which its unit , the pound sterling , is composed , must constitute its cardinal excellence , as changeableness therein its worst fault . And next , as to its quantity , what has common

    are not either increasing our stock of gold at the expense of our other commodities , or increasing theseat the expense of our gold ; next ( without any other change ) , suppose our harvest to fail to the extent of twelve millions'worth of corn : we should at once export in purchase of corn whatever we could best spare at home that was likely to prove acceptable abroad . Gold and silver being easily got hold of , light of carriage , and sure of acceptance , would probably go first , the merchants racing to get first into the foreign markets . Suppose that ten millions of sovereigns were taken out of our currency towards such purchase . Ought our dealings under these circumstances to decrease , and this to such an extent that we should feel no inconvenience from the

    abstraction of these sovereigns ? I believe both parties will join in saying no , though for wonderfully different reasons . Lord Overstone says that general prices at home ought to fall ( which could not be unless the circulation j&sjre felt to be insufficient ) , and that abroad they ot / gkt to rise , in order , by the joint operation of the two disturbances of price , to force back the gold forthwith . . We deny the validity of these reasons ; for we regard the contemplated disturbance of the home standard , by reason of the insufficiency of the currency , as one of the greatest of commercial misfortunes , infinitely worse than that of our being obliged to make shift for a ,. time with ten millions' worth of

    paper money in place of the exported coin . And if the standard of the corn-supplying country be gold too , we regard its contemplated disturbance , \> y reason of the temporary glut of gold , as an almost equal misfortune to such country—a misfortune only to be averted by the withdrawal from circulation in such country of ait equal quantity of paper money . The hasty expulsion of such a mass of gold from the foreign country , and the speedy recovery of it by ours , which is the "fixed idea" of theOverstone school , would be dearly purchased by the distrust at home , endangering panic and the wild speculative excitement abroad , which the sudden twofold disturbance of prices must necessarily engender . Its effect , too , upon production and consumption in both

    countries , would in the main be precisely the opposite of what any one in his senses could desire . Then in straitened circumstances , as we should then' be , we ought to produce more and to consume less , until the times should mend . But the general fall of prices at home would check production and stimulate consumption . On the other hand , the more prosperous foreigner might , not imprudently , increase his consumption , without working any harder than usual . But the general advance of prices which he would experience would check consumption and increase production , by stimulating his domestic manufactures ; this last just at the time when such competition would be the furthest from agreeable to us .

    sense to say ? How much currency is it best for us to have , if we can get it ? Lord Overstone everywhere confounds the quantity which would be most serviceable to us could we obtain it , with that which ( under his system ) , wo can get—two quantities no more necessarily identical , than is the quantity of food which the nation obtains identical with that which . would most healthfully sustain its population ; quantities but too widely different , as millions of underfed creatures can sadly testify .

    Our reason , therefore , for concluding that our interchanges ought not to be lessened when food . 00 ^ - comes scarce with us , is simply , that we regard it as our plain duty at such time to bestir ourselves to make up for the failuro of our crops by redoubled industry : 1 st , in the cultivation of our lands for our next harvest ; and 2 ndly , in the production of anything and everything , by the sale of which we may in the meantime procure supplies from abroad . We say , " Let the hammer ring yet more loudly 011 the anvil—let the ' rapid axle glow' with even a heightened velocity—let the shuttle fly backward and forward with enhanced celerity—let the plough cleave

    We want currency to help -us to effect our multifarious interchanges ; the more interchanges we have to effect , therefore , the more currency we must require ; and the less interchange we have , the less currency wo want . Count ( for instance ) the respective quantities employed : first , at Weyhill fair ; secondly , at Wcyhill market ; and , thirdly , at Weyhill on an ordinary day . Jf Weyhill and its frequenters were confined to the latter quantity only , the additional interchanges of the market and of the fair could-only bo effected by barter . Enough currency , whether at "Wuyhill or elsewhere , therefore , ¦ itjnat that qmmlity wJttc / i will render barter wimccssari / We want no more ; we can do with no less . If we

    the glebe , and the ship the wave , with a quickened speed—let idleness be banishod and profusion be restrained . " Jink how ? Wo wo invoice despotic power ? Do we risk aCiiiciunatus to command every one to his post ? No ; the days of the Dictator , like those of chivalry , arc gone . We ask only that the industrial activity , which ulonc can enable us to make good the breacli in our resources , shall not , out qf deference to any man ' s theory , be thus paralyzed at the moment of our greatest need by an insufficiency in tho supply of currency , the instrument without whose help tho . se rapid and multifarious interchanges , which lire the lifo of tlio " division-of-labour" principle , must necessarily conic to a stand .

    have more , the competition amongst us to get rid of our respective shares of the excess must needs lower the value of tho whole , and thereby render it a false measure of the value of otlar things j whilst , if we have less , the competition amongst us to increase our respective shares must needs raise the value of tho whole , and thereby render it a false measure of the value of other things . Correctness of quality , as respects the currency , is therefore impossible , except in conjunction with correctness of quantity ; understanding by correctness of quality , ¦ niwfKuitjeablem'n . of value , and by correctness of quantitv , just as much

    We point to the fact , that the members of the Overslone school , so far from denying that in times of scarcity such paralyzing , 'such dangerous insufficiency must result from their plan , do actually Hpeuk of it as though it were a benefit . Wo are prepared to show the moans by which , if allowed KulHdi . ' nt freedom of action , we can safely effect ihe timely removal of those disastrous excesses in tho currency which , when they occur , suddenly and unwarrantably raiBc priccK , and thereby engender

    as will effectually supersede barter , and no more . A successful system of currency must therefore supply us , <\ r allow its to sitjiply onI ' . icln-s , with this precise quantity . Jf our dealings increase , it must allow us to increase our curroncy correspondingly , by a suitable addition of gold , silver , or pup-er money , us we may find most convenient ; and if our dealings fall ofl ) it must help us ; it onco to gut rid of the- coin or notes thereby thrown out of use . So says common nense ; but to the Overstone school the whole of this must Bound like " Hat binspile HIN' . "

    speculative excitement , and by which means also we . shall be enabled , Nafely and promptly , to Hupply thoso still more disastrous insufficiencies which depress prices suddenly and unwarrantably , engender distrust , and endanger panic . We challenge inquiry , confident that wliaL we have to propose docs not contravene any one of the great established economic nrincipk'H . 1 am , sir , yours respectfully , Kdwin Hill .

    In conclusion allow mo to put , a case , as recently put in efVfct by l'hilo-Mcrciitor . " First , suppose the country to be in an average state both as to ordinary commodities and us to currency , so Unit we

    Control , and legislative meddling with mere trading operations , on the other . France , Scotland , and even Ireland , vastly less wealthy , less advanced in civilization , greatly inferior in the means of making good any occasional breach 5 n their resources , nowise superior—if equal—in industry , prudence , thought , and energy , but stqycrior in monetary freedom , bore the commercial storm certainly without flinching , almost Without feeling it ; whilst England , in the pride of her wealth and power , was prostrated * m the dust . ¦ But once let a man become fairly jtaw ^ nal by a theory , and then , until it shall b <; exorcised , he will oecome blind and deaf to the most obvious facts Hint

    run counter to his prepossessions , Thus Galileo's opponents , even ufler thuy had witnessed the simultaneous fall of bodies of unequal height from the top of the leaning tower of 1 ' i . sa , talked away , maintaining , as they ever had maintained , that heavy bodies must necessarily fall at rates proportioned to their respective gravities a body twice as heavy aa another , therefore , necessarily faffing twice us fast . A resolute theorist sets facts at tie-

    Untitled Article

    ^ ebrttaby 28 , 1857 , ] ^ HE _ Ji E A B E B . 203

• Citation
  • Leader (1850-1860), Feb. 28, 1857, page 203, in the Nineteenth-Century Serials Edition (2008; 2018) ncse-os.kdl.kcl.ac.uk/periodicals/l/issues/vm2-ncseproduct2182/page/11/