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Maps, plates, charts, etc., may be filmed at different reduction ratios. Those too large to be entirely included in one exposure are filmed beginning in the upper left hand corner, left to right and top to bottom, as many frames as required. The following diagrams illustrate the method: Les cartes, planches, tableaux, etc., peuvent Atre filmte A des taux de reduction diff Arents. Lorsque le document est trop grand pour Atre reproduit en un seul ciichA, 11 est film* A pertir de I'angle supArieur gauche, de gauche A droite, et de haut en bas, en prenant la nombre d'images nAcessaire. Les diegrammes suivants iilustrent la mAthode. ■ t; ^ t ■ 9 1 2 3 4 5 6 i^- », ^ *• t.^ tfXbat a a ^onnlii LETTER TO THE PREMIER ON IITA NEW CURRENCY MEASURES, IN REPLY TO ins SPEECH ON THE BANK CHARTER ACT, MAV t). 1844. " Tlie Commons hath he pilld With grievous Taxes, and quit'.' lost their licarts.* SHAKsPEAiiK'ii li'-vhard If SECOND EDITION, ENLARGED. *■* LONDON: • SAMUEL CLARKE, 13. PALL MALL EAST; R. HASTINGS, 13. CAREY STREET, LINCOLN'S INN : AND .. .... . J» IMCH4.Rl?SpN,,gO»Nmi-U. ... ^Jl •1844. ... • • • es »r CO • ••• ••• •• •! . Printeit by A. Spottiswooub, ^ NMr'SUeetrSquarft /s-fss- LETTER, &o. &c. Sir, The importance of the subject treated of in your speech of the 6th instant, and appointed for further consideration by the House of Commons on the 20th, cannot be overrated. The great danger is, tliat the country will not be sufficiently aware of its importance. Sewng that the discussion is professedly on the question of reneicing the Bank Charter^ and not conceiving that currency measures are proposed which demand their most watchful attention, it is probable that many who are deeply implicated in the result of the debate will be in- different to its details, till they find too late that their dearest interests have been canvassed, decided on, and perhaps sacrificed. You, Sir, have given them fair warning of the momentous nature of the question under consideration. " There is no con- tract," you say, " public or private, no, engagement, A 2 WHAT IS A POUND? national or individual, which is unaffected by it. The enter^^rises of commerce, the profits of trade, the arrangements to be made in all the domestic relations of society, the wages of labour, the trans- actions of the highest amount and of the lowest, the payment of the National Debt, the provision for the national expenditure on the one hand, and the command which the coin of the smallest de- nomination has over the necessaries of life on the other, — are all affected by the decision to which we may come on that great question which I am about to submit to the consideration of the committee." These words, Sir, amply vindicate you from any suspicion of wishing to take advantage of the in- difference of the public mind, in order to pass with as little trouble as possible those resolutions, which yourself and your colleagues approve of as forming a proper basis for the future law of the land con- cerning THE CURRENCY. But while I gladly admit, in this respect, the candour and liberality of your conduct, I am obliged to say that in another point of view there does seem to be an unwillingness on your part to allow that share of attention to be given to the subject which is due to it. Why should you restrict to a fortnight only the time you permit to be bestowed on a measure affecting interests of such extent and magnitude ? What time is that for enabling the members even of the House of Commons to form a competent judgment of so complex and difficult a question as the Currency, WHAT IS A rOUNli? with its bearings on tlie various classes and inter- ests liable to be compromised by their decision ? ^f every transaction of business, every domestic arrange- ment, every contract subsisting or hereafter to be made, every person in the kingdom from the prince to the peasant, — the most aged to the child unborn, — will be affected by the decision to which the House may come on this great question^ — how happens it that you, Sir, should restrict to so brief a term the period allowed for studying your propositions, tracing their probable effects through their multi- tudinous ramifications, and consulting those nume- rous classes of persons, those almost innumerable individuals, whose weal or woe depends on the votes which will be given in Parliament ? Ample notice and the fullest information to the people should have been allowed to precede the discussion, and all who apprehend injury should have been invited to state their doubts and fears in petitions, memorials, or remonstrances. I think I may say, with perfect truth, there never was a measure of such universal and intense interest, hitherto so little understood, urged on with such indecent haste, and so little regard to the sentiments of laose who may be the sufferers. On most matters which are brought before Par- liament, it is willingly conceded, that the members of the two Houses, and especially Ministers, are better qualified to form an opinion than men out of doors ; but here. Sir, according to your own show- ing, is an affair of the pocket, — a matter on which A .3 ■ I 6 WHAT IS A POUND? every one thinks that he is himself as good a judge as any of those who presume to advise him, — a matter on which men arc usually jealous of having their understandings questioned, their judgments overruled; — yet you, Sir, proceed to decide upon that which so vitally concerns them at once and for ever, without even paying them the compliment of asking their o[)inion. The right of parliamentary representation has been doubted, and even denied : but I question whether it was ever before treated with so much apparent indifference, so much ap- parent contempt. I may, however, be mistaken. Your motive may have been only the desire to avoid that avalanche of pamphlets which usually descends when any sudden or extraordinary announcement startles the public ear. You are justly afraid of those " who in our day write (as you say) interminable pamphlets on the currency, but never allow us to guess at their meaning." In this view of the case I have no right to complain. I would only hope that, as you have had plenty of time yourself to prepare your plans, to arrange your arguments, and to support them by competent authorities, so you would allow any defects which you may perceive in my remarks to have the benefit of such excuse, as this really too short space to read an 1 reply in print to your speech can fairly plead for me. You are undoubtedly right in saying that we " cannot discuss the principles on which we shouM establish «.. engagement to pay a certain definite f WHAT IS A rOUVD? value, unless we are agreed on the principle as to what constitutes the measure of value in this country. That is the foundation of the whole of this Huhject." Accordingly you proceed to give us your idea of th(; meaning of a pound. You pro- perly contend that it is not " a merely visionary theory, a fiction which does not exist either in law or in practice," but that it means " a quan* tity of the precious metals of certain weight and certain fineness. The whole foundation of my measure," you say, " rests on the assumption that, according to practice, according to law, according to the ancient monetary policy of this country, the meaning of a pound is neither more nor less than a certain quantity of gold, with a mark upon it to determine its weight and fineness ; and that the engagement to pay a pound means nothing and can mean nothing else, than the promise to pay to the holder on demand, when he demands it, a de- finite quantity of the precious metals. What is the meaning of the pounds according to the ancient monetary jwlicy of this country? The origin of the term was this : — In the reign of William the Conqueror, a pound of silver Avas the pound of ac- count. The word pound represented both the weight of the metal and the denomination of the money. By subsequent debasements of the cur- rency, a great alteration wasgnade, not in the name^ but in the intrinsic value^ of the pound sterling ; and it was not until a late period of the reign of Queen Jllizabeth, that silver, being then the standard of A 4 WHAT W A FOUND? value, received that determinate weight which it re- tained without variation, with constant refusals to alter it, until the year 17ir>, when gold was prac- tically substituted tor silver, as the exclusive standard of value. The standard of silver up to 1710, was fixed about ir)()7; but in 1717, the value of the guinea was detenninod to be 2l5. ; and for a certain period, both gold and silver con- stituted the standard of value. But in the year 1774 it was enacted that no legal contract should be discharged in silver for any sum of more than 25/." My first remark on this sketch of the history of our coin is, that, unintentionally of course on your part, you convey a false impression when you say, that " by nuhsequent debasements of the currency" a change was made in the value of the pound sterling. Debasements have reference to some greater admix- ture of alloy than before wath the precious metals. This happens to be a charge from w^iich the English mint has always been remarkably free. From the earliest times to the present, with the exception of fourteen years, from the 34 Hen. VIII. to the 1 Eliz. (1543 to 1557), the standard fineness of English silver coin was lloz. 2dwts. fine silver to ISdwts. alloy ; and even in 6 of these 14 j^ears, the standard was lloz. Idwt. to IDdwts. of alloy: so that with the exception, properly speaking, of only 8 years, the standard of our silver coin has always been the same from the Anglo-Saxon times to the present day. With respect to our gold coin, which began \VHAT IS A. l-OUND? 9 to be minted in t\w 41 Hen. III. (1257), its propor- tions wen* 23 ojinitM 3.^ n^niins fine pold to Imlf u grain ulloy, till 1 James 1. (l(i(>4), wlien 22 carats WHS tlie standard with 2 earats alloy ; at which standard it remains to this day. Thus, accordin*^ to history and fact, the earlier kings of England were, in the mintage of their c(»ins, more remark- al)l(! for preserving the purity of the standard, than for debasing it. Your intention, doubtless, was to say that the wei(/ht of the coin had been cHminished^ by which a great alteration had been made, not in the name^ but in the intrinsic value, of tiie pound, from the time of AV^illiam the Conqueror to the reign of Elizabeth. This is true: the pound weight of silver was coined from lOGfi to 1601 (omitting the eight years of de- basement) successively into 20.s., 20.v. 3^/., 22.y. 6t/., 25a'., 30.9., 37*'. (id., 4.5.9., GO.s., and 62.s. But how do these successive alterations of the quantity square with the doctrine you lay down concerning the pound? You contend that it means " a quantity of the precious metals of certain weiyht and certain fineness ; " that it is "a certain definite quantity of gold ; " " a definite quantity of the precious metals." Do you by these expressions mean us to understand that it should consist at all times of the same definite quantity of gold or silver ? That it should always be an invariable as well as a definite quantity ? If so, your historical examples contravene your assertion. You cannot intend this sense, but must mean only that the measure of Aalue should be, at that time «r 10 WHAT 18 A POUND? when it is the measure of value, whenever that may be, a coin of a certain weight and certain fineness. You next observe, in your brief sketch of our pound sterling, that it was not until " a late period of the reign of Elizabeth that silver, being then the standard of value, received that determinate weight, which it retained without variation, with constant refusals to alter it, till 1716." By these words I understand that the pound sterling, from a late period of the reign of Elizabeth, remained un- changed in value till the year 1716. But here I must again take leave to question the accuracy of your statement, liou clearly omit to take into account, when you make this assertion, the dif- ference in the value of silver which was occasioned by the discovery of America ? From the earliest ages till the year 1600, the proportions of silver and gold were generally recognized as 10 to 1. Ten ounces of silver were worth 07ie ounce of gold. This was their general relation to each other in all countries, everf the most ancient ; and in general the relation which they held to each other in our own coinage. By degrees this proportion was in- fringed upon ; the reason being that silver was obtained with much less labour in the New World than in the Old. It was thus in England that the relative value of silver to gold was gradually changed till it became more than 15 to 1. At the period in question it was esteemed as 11 to 1, and was so represented in our coins : when, therefore, we desire to compare the value of silver coins WHAT IS A POUND? 11 may )f our period en the weight, nstant ords I a late ed uri' here I [•acy of iQ into he dif. asioned earliest v^er and [. Ten •f gold. ir in all general in our was in- er was ■ World :hat the adually At the ) 1, and erefore, r coins formerly, with the value of silver coins now, we must take this relation into account. Or if we choose to disembarrass the question of all cal- culations of this kind, we may at once compare the weight, of our gold TK)und now, with the weight of that which we had at any former period, and the difference between the two will show us the value of the silver pound as well as of the gold pound. You will find in Harris*, that the proportion of fine silver to fine gold in the coinage of 1601, to which you allude, was as 10-905 to 1, and in Kuding, that while the proportion was as above exhibited (or, as he expresses it, 1 to lOjT^), the gold pound, called the sove- reign, worth 205., was coiii^d of the weight of 171 grains. Now, if our present sovereign contains 123 grains, and that of Eliz.*in 1601 contained 171 grains, it follows that her pound sterling was worth 27.9. \id. of our present coin. Admitting, therefore, that the silver coin of Eliz. was the measure of "value, and the legal tender of that day, it is evident that as the value of 205. was equal to the sovereign of 171 grains, the value of the silver pound of that period was also of the value of 27.s. 9rf. of our present coin. For more than thirty-nine years before this change was made, that is, from the 4th of Eliz. to her 43d year (1558 to 1601), the pound of silver was coined into 60^., and the gold so- vereign, worth 20«., was of the weight of 174 grains ; * EsRay upon Money and Coins, Part II. p. 2. • '%■ M 12 WHAT IS A FOUND? i I ,1 both pounds, therefore, were then worth 28*". 3c?. of our present coin. Harris much regrets this alteration from 60.S. to 62.v., " as now none of our coins" he says, " are aliquot or even parts of our weights. For about lifty years Ijefure, whilst the pound weiglit troy of silver was cut into GO*., the money pound being exactly four ounces, the crown piece was one ounce, the shilling four dwts., and the penny eight grains. Had this standard been con- tinued, every one would have readily known how much silver each piece of money ouglit to contain ; and this would naturally have led people to compare coins with weights ; which probably would have pro- duced long ago some of the regulations now so much wanted in regard to money, and which would have saved this nation from great loss and perplexity."* As you so frequently quote his work, and appear to regard him as a great authority, I almost wonder you did not follow up this hint; and when you were desirous of rjestoring our ancient pound, take the shilling of 60 grains, rather than that of 62. Or, still better, you might have reduced the sovereign from 123 grains to 120, making it consist of 5 dwts., or a quarter of an ounce, but still reckoning it as 20^., which would have dimin- ished its value only 6c?. This would have been a more convenient division, as gold is now our principal measure of value. But your wish appa- rently was to continue our pound in coin at the f • EssAj upon Money and Coins, l*art II. p. 9. WHAT IS A lOLND? la same mlue which it jiossessetl in the hist two years of the reign of Elizabeth. Unfortunately, J*, for your consistency, our pound sterling underwent four alterations after that. In 1604, ordy three years after the last alteration, the gold pound, of the value of 20*-. in silver, was coined of the weight of 154 grains, which gives for the pound sterling, both in gold and silver, the value of 25.5. of our present money. In 1G25, it was coined of the weight of 140 grains, which makes the pound sterling in gold and silver equal to 22s\ 9d. of our present money. In 1675 it was reduced to 129 grains, being still of the value of 205., which makes the pound sterling worth only 2l5. of our present money (this gold pound was afterAvards called a guinea) ; and in 1815 it was coined of the weight of 123 grains, or nearly so, which is its present weight. Of these changes you appear to have been uninformed. Conceiving that as the same weight was found in the silver pound its value was the same — and that for convenience sake alone gold was substituted for silver in 1774, as the standard measure of value — you concluded that when the pound troy of silver was coined into sixty-six shillings, (four of which were kept back for seignorage,) we were brought practically to the use of the same measure of value which we had in 1601. I trust. Sir, you are now satisfied that this was an error of yours ; and since this erroneous assumption of the antiquity and uni-' formity of the measure of value which you re- commend is made the reason of your neir currency !f*lT >tWV»tafcV--.!^iyv«W»-. t H WHAT IS A POUND? measures, I earnestly hope that you will for the present suspend any further proceedings in relation to this business, and allow the country a little longer respite to consider what steps it may be prudent to take in the present posture of affairs. When such mistakes as these are made by one who is considered an oracle on the subject of Ciwrency, it is time to pause and look about us : when the pilot to whom the vessel is trusted is found to be so widely out in his reckoning, and breakers are ahead, it is our duty to pipe all hands, take in the. sails, cast anchor, and endeavour to ascertain where we are, before we commit ourselves again to his guidance. Having confidence that under these circumstances neither you. Sir, nor the House would desire to proceed further without obtaining additional in- formation, I might stop here ; but I shall continue my observations in the hope, not that they may be necessary to confirm this opinion, but that they may be found useful at a future opportunity. You say that the weight of our silver coin was ** retained without variation, with constant refusals to alter it, until the year 1716, when gold was practically substituted for silver, as the exclusive Standard of Value." The refusals you speak of were needless, as the relation of silver to gold was altered by circumstances over which our rulers had no control. They attempted, nevertheless, to make our coins conform to that altered relation, changing the proportion of gold to silver, in our successive If, WHAT IS A POUND? 15 uccessive coinages, from 1 to 10^ in 160l, to 1 to 12^^ in 1604, 1 to 13^ in 1610, 1 to 14^ in 1663, and 1 to 15y^ in 1717. Thus, I am afraid. Sir, I must again say, that your statement of the case is not in strict accordance with the facts. " The standard of silver^ up to 1716, was fixed about 1567," according to the report of your speech in the Times ; the Post has the same substance in the following form : " the standard of value ob- served up to the year 1816 was that fixed in 1566.'* Reporters on these abstruse subjects are so apt to make mistakes, especially in figures, that I would not wish to raise any question here : I would merely observe, that the indiscriminate use of the words standard and measure is embarrassing. By the standard of silver we should conceive the purity of the metal was the thing meant ; by the standard of value we might imagine you intended to express the same thing as the measure of value. Harris makes use of a convenient term which might be advantageously introduced into these discussions. He speaks not only of the measure of value, but of the standard measure of value, when he wants to point out that metal as the measure of value to which the other is subordinate ; thus he would say our present standard measure of value is gold. You, Sir, may mean that the standard puriti/ of the silver coin was fixed in 1566 or 1567, but I can- not understand the drift of the passage, either in this sense, or in that of a measure of value, or of a standard measure. There may be a mistake in the ' ft 16 WHAT IS A POUND? I I 1^ dfltes, and wluit is placed in ir)fj7 may be intended for 1 557 ; this would throw a little light on the subject, for then it might be conceived that you allude to the restoration of the purity of our silver coin which took place about 1557. But can an interruption for fDurteen years, or I might with more exactness say of eight years, in the preservation of the standard purity of our silver coin, from the Anglo-Saxon times to the present, when followed by its restoration, be called a fixing of the standard ? You may perhaps think so ; and if this is your meaning, I am happy to ac- knowledge that during this period, in such degree as our silver coin was concerned, you have some foundation for your remark. But throughout the same period our gold pound, the sovereign, re- mained unimpaired in weight and purity, if tried by the gold pound of 1 601 . We now come to matters of greater interest. Having stated, that in 1774 gold was made " sub- stantially the measure of value in this country/' you add : " it continued to be the measure of value legally and ])ractically until 1797, when tliat /^^a? measure for restricting cash payments by the Bank was passed, enabling parties to issue paper money at their discretion, without its being convertible into coin, which disturbed not only the speculations, but the theories and notions of men -with respect to the standard of value. From 1797 to 1810 public attention was not much directed to this question; but in 1810 men of sagacity observed WHAT IS A POITND? IT lave some that the exchanges hud been f )r a considerable period unfavourable to this country, — more un- favourable than could be accounted for by anything that could be called balance of trade, or the mone- tary transactions of the country. A committee wa8 appointed to enquire into the subject, and opinions, then novel, were stated — namely, that the pound meant, in fact, nothing else than a definite quantity of the precious mctnls, and that those who promised to pay a pound ought to pay that quantity. That ,heory was very much contested at the time. The jHouse of Commons was not convinced by the argu- ments used in favour of it. The opinion of the public mind, that had prevailed since 1797 up to that period (1810), was, that this was mere delusion, a visionary speculation, and that something else was signified by a pound other than a definite eight of the precious metals." You give some ntertaining examples of the absurd definitions of a pound, which were set up in opposition to the notions of the Bullion Committee, which notions you conceive were entertained by some former writers of eminence, as Locke, Petty, and Harris ; and then with right good-will, as if you owed the town and its writers an old grudge, you select a volume on the currency recently written by two gentlemen of Birmingham, and lash the place, and the authors of this work, with as much sarcastic severity as could be thrown into a speech. I have not the honour to know either of the writers per- B « '■ 18 WHAT IS A POUND? f !l I sonally — one, I have been told, is the editor, and the other the printer and publisher , of a very ably conducted and well-supported newspaper, in which the Letters of Gemini first appeared. I have read in that paper many of those letters, and I must say that 1 differ fi'om you in opinion, as to their merits. They are written, as I conceive, with good taste, in cor- rect language, with courtesy and gentlemanly feel- ing ; they are well-reasoned compositions, full of sound sense, honestly directed to the elucidation of that great subject on which you are preparing to legislate : the writers appear to be actuated with the best intentions of serving — perhaps of saving — the country. Can these letters raise such resentment in you ? Your colleague, the Home Secretary, might perhaps be angry with their authors, be- cause they have quoted so freely from his writings in support of their opinions ; but I cannot under- stand your cause of complaint. " First," you say, " they laugh at the notion of using as a standard DOW that which was used 300 years ago. They say that the property of this country has increased — that the mercantile transactions of this country have increased — and to have that as a standard now which was used in the reign of Queen Eliza- beth, although it has been adhered to ever since, shows a want of knowledge and illumination that is almost culpable." Really, Sir, to complain of sentiments such as these is more worthy of one who has been much mentioned lately in the House of Commons, than of the leader of that House. >^M- WHAT IS A POUND? 19 ** Smith. The ( ' k of Chatl'»:u : he can read and write and cast accompt. " Cade. O monstrous i " Smith. We took him setting of boys' copies. " Cade. Here's a villiiin ! ** Smith. He hns a book in his pocket with red letters in it " Cade. Nay, then he is a conjuror. "Smith. He can make obligations, and write court-hand. " Cade. Away with him, I say : hang him, with his pen and ink horn about his neck." Your objections, Sir, to what you say are " the principles contencled for by these gentlemen," will appear to yourself somewhat less tenable than they were, perhaps, when you perceive that their notion of the impropriety of using as a standard now, that which was used 300 years ago, is substantiated by historical documents, while your own view of it is proved to have originated in error. The experi- ence of that 300 years has shown that the country could not sustain as a measure of value that which it possessed then, and that this measure was obliged to be reduced four several times before we could endure it as our present measure of value. What was the cause ? They say that the property of this country has increased — that our mercantile trans- actions have increased— too much to enable us to bear it. I apprehend. Sir, that though you have got the laugh of the House against them, the com- mon sense of the country will be in their favour. At all events, men of ordinary understandings -will draw a conclusion against you, when you say that this standard — this measure of value — which they object to as being obsolete and unfit for the altered B 2 20 WHAT IS A POUND? r ill. i!t '![ circumstances of the country, has been *' adhered to ever since ; " while the truth is, it has been four times altered since: — they will perceive that you are mistaken in your facts ^ while the others can only he mistaken in their opinions. But your breast cannot long harbour unkind feelings. Having exposed their errors, you will now most charitably enlighten their minds. You proceed therefore to inform them, that " there would be just as much sense in saying that we have in- creased in population^ we have established railways^ we have increased in wealth, and therefore, with all the advantages of our new position, we ought now to have sixteen inches to the foot. There is no more reason (you repeat it to make assurance doubly sure) why a pound should not be bound by all our transactions, notwithstanding our increase in wealth — there is, I say, no more reason (the third time) why you should change a pound than to say a foot shall he a foot and a half.^^ This felicitous illustra- tion was esteemed so excellent a hit, so convincing, 80 applicable, and so full of wit, that the House revelled in " laughter and cheers " for several minutes. I see something like this in your fa- vourite Harris, but it wants a certain charm which yours possesses. In answer to those " who are for debasing our standard because, say they, it is too good," he observes, " these gentlemen might as well say that our yard is too long and should be cur- tailed ; and assign as a reason for it, if they please, because our consumption of cloth hath increased since WHAT IS A POUND? 21 that standard was roade and placed in the Ex- chequer : " but here there is some natural relation perceptible between the objects spoken of, the yard- measure and the cloth. In yours thei-c is none, and therefore it is the more admirable ; for who can see any resemblance between a proposal for diminishing the bulk of the coin and one for in-^ creasing the length of the foot ? Who would think of comparin'T a substance with an abstraction,, and treat them both as if they were subject to the same laws ? Men of dull minds would object that nature interposes no limit to the length of a measure : you may say our foot shall be a mile long if you please ; but she has placed bounds to the production of gold and silver. Such men would be puzzled by the schoolboy question, " How far is it from Hyde Park Corner to the first of January ? " They would stand no chance, Sir, in " wit-combats" with you. I come now to your second objection to what you call the "principles" contained in the Letters of Gremini. "Then it is said — and this is repeated over and over again, and is one conclusive proof I have that he who says these things has no more con- ception of the truth, with respect to the measure of value, than he has of any speculations in the most distant parts of the globe, with which he is wholly unacquainted, — it is said, *what a monstrous injus- tice and folly it is to tie down the Bank to issue gold at the old price of 3/. \ls. lOJrf. an ounce.' Now what is the meaning of this ? The only mean- ing of an ounce of gold for 3/. 175. 10 J^. is simply B 3 WHAT 19 A POUND ? Ifiisy that it is the relution which silver bears to gold with respect to value. When you had a double standard, you said tliat a pound of gold should be coined, I think, into 44 guineas (44 J guineas), and tliat a pound of silver sliould be coined into 62 shillings ; and you made oai'h of them a legal tender ; and if you will make the calculation you will find that a pound of gold being coined into 44 (44^) guineas, and a pound of silver being coined into 62 shillings, the relation of gold to silver is about IS-j^ to 1. What, then, is the meaning of now asking that the Bank should issue gold at the rate of 5/. an ounce ? . . . Depend upon it, that if you attempt to say, that one ounce of gold shall not represent 3/. 175. lOl^d. in silver, but 51., — silver and gold will be more powerful than your legislation, and you will find it utterly impossible to alter the relative value of silver and gold." You think. Sir, that you have got your antagonists on the hip, but you are mistaken : you will be thrown yourself. The truth is, that the ounce of gold didf at a certain period of the late war, 7'epre- sent bl. ii' silver, and this without any alteration of the relative value of the two metals. The silver coin was diminished to keep proportion with the gold by Ihe issue of bank tokens ; so that, when an our ce of gold was worth 5/. the silver which was pre vi- ously coined into 3/. 175. lOJc?. was coined into hi. The Spanish oollar, for instance, which was pre- viously rect/^Ai : ' to \'9, worh 45. 26?. was stamped anew by the bank and mau':' to pass for 55. You WHAT IS A iOUND? 23 have evidently misunderstcKjd the question at issue, as well as misapprehen(k'cl the facts of the case. It does not concern the relation of the two principal metals to each other in /'f'spect to quan- tity, but their joint and e.qiui' rclntio*i in that respect to the denominations of our coins. If gold is reduced, silver is equally reduced, an 1 so also is copper. It is not quite correct therefore to say, that th'^ vid;i meaning of an ounce of gold for 3/. 1 i 9. l-U^u'. IS the relation which silver bears to gold ,vx. !' respect to value. It has other meanings, — 1. It ih that relation which gold itself holds to the den :>niination of our coins. An ounce of gold, containing 480 grains, is equal to three sovereigns of 123 grains, and ^{{ths of another sovereign, or more exactly, one-eighth of a twentieth less. This is a relation which would exist if we had no silver coin at all. 2. It is that relation which an ounce of gold bears to 3/. 17s. lO^d. in copper, a relation which has remained, for aught we know to the contrary, thousands of years undisturbed, while that of silver, within the last 250 years, has under- gone a change in value equal to 50 per cent. 3. It is that relation which all these metals, but gold especially, because it is now our standard measure of value, did bear to paper money during a certain period of the late war. This is clearly the sense which the Birmingham writers had in view when they thought it "a monstrous injustice and folly," as you say, " to tie down the Bank to issue gold at 3/. 175. \0\d. an ounce :" and that this was pro- B 4 H WHAT IS A POUND? ! bably the true sense you appear to have had some consciousness, when you follow up your own ques- tion, " What, then, is the meaning of now asking that the Bank should issue gold at the rate of bl, an ounce ?" by adding, " I perfectly understand you if you say that all those who have contracted debts or engagements shall be allowed to pay their debts in that way — that is, bl. being, in the pay- ment of a debt, an equivalent to what 3^. I?*. \0^d. used to be ; and if you mean to enact that, enact it simply^ — make that the discount from the debt" Passing over this recommendation for the pre- sent, I would only observe that, as these are all the proofs you have brought before us of the utter incompetence of these Birmingham gentlemen to understand the question of the currency, — as this last is alone a conclusive proof with you of their being wholly unacquainted with the subject of the measure of value, — may I not be allowed to ask, whether, after the pleas which are here advanced in mitigation of damages, you do not think that in candour you might pronounce a more lenient sentence on them and their town than this : "I wish to do justice to all parties, and I say at once, that I do not believe that in any other town than Birmingham this publication could have been pro- duced ; and I do not believe that it is in the power of any one man to write so much nonsense as is con- tained in it." Now, Sir, with respect to your recommendation that they who think that they are injured by the Ei «^ WHAT IS A POUND? 25 altered value of money since the ounce of gold was reduced from 5/. in paper money to 3^. 175. lO^d. should endeavour to obtain redress by means of a separate enactment, — making that differ- ence a discount from the debt — let me, in the first place, say, that thougli I have no doubt this is your meaning, your language bears a different construction. I take for granted, however, that you mean the reverse of what your words, as they are reported, imply; and that 31. 17s. lO^rf., " being, in tlie payment of a debt, an equivalent to what " 5^. used to be, "all those who have contracted debts or engagements shall be allowed to pay their debts in that way." This meaning is borne out by another passage, as follows: — "Observe, I do not deny that that may produce matter for consideration. All contracts, during the inconvertibility of paper , having been made through a different medium of exchange^ when you restore that convertibility, that subject may demand consideration. But I only want to convince you what is now the measure of value." These, Sir, are indeed important words : they compel us to believe that you are not unfriendly to the principles of an equitable adjustment, so zealously advocated by the late Mr. Cobbett. What boundless triumph would have been his, had he lived to see this day ! ^^ I 26 WHAT IS A 1»0UND? 1; That you may see at one view the extent, number, and frequency of the alterations which have been hitlierto made in our measures of value, I now lay before you a Table of the Weight of Actual Coins drawn up from documents as given by Leake and Ruding, and bused, as I conceive, on the firmest and safest evidence — that of the intrinsic value of each coin in comparison with our principal measure of value, gold^ at the present day. I have given the priority in this Table to the gold coins; because, whatever we may fancy with respect to silver being our standard measure, the fluctuations in regard to intrinsic value which our silver coins underwent continually from wear and clipping, sliow them to be an unsafe criterion ; and also because, in every country where a gold coin has been minted, having proper relation to the silver coins, that gold coin will ever be found the truest register of the variable value of those silver coins. The every day transactions of business in common life were carried on by means of clipped or defaced silver coins, of which great complaints were constantly made, as defrauding the people of their just recompence ; but far beyond any influence of this kind ranged the gold coin, in which, or in silver coins of full weight, the foreign merchant took care to be paid, and which therefore con- stitutes the best standard measure to which we can appeal. Tliis reference to gold is in accordance with your own views as expressed in your speech, as it is also with those of Harris, whose authority WHAT IS A POUND? %l you so highly esteem. " As Mr. Harris said, make what regulations you will about the payment of your own debts, cheat and rob yourselves if you will, you will still have the i\ reigner to contend with: he will not be bound by your legislature, nor will you yourselves." But how remarkably your favourite author proves my case, while he contends that gold was 7?ot our national standard! He says — "It hath been before observed, that merchants will reckon by that metal which is most common in large payments : all coins are with them, in effect, mere bullion. They have no regard to names or local institutions: the real quantity of pure silver or pure gold, which they give and take in exchange for other commodities, is what they reckon by. And it is very manifest by the course of exchange between us and all the world, that gold here is the standard of merchants : this for them is most profitable, because gold here goes farthest in the purchase of our commodities^ but with what loss to the nation doth not fall within our present consideration."* Essay, part ii. p. 91. ■t[- 28 WHAT IS A POUND? M TABLE or THE WEIGHT AND VALUE OF THE PRINCIPAL OOLD AND SILVER COINS FROM THE EARLIEST PERIOD TO THE PRESENT TIME. Reigns and Dates. Names of the Principal Coin No. of Gold gr. in £l. Value in Gold grs. Pound wt of Silver in each lleign. Sterling. at '2d, each. coined into s. d. grs. s. d. 1 W. 1. 1066. Penny, at Irf. 576 96 20 4 E. 1. 1275. Ditto — . . 20 3 19E.3. 1345. r Noble, 6«. 8d. It differs from all the former pro- clamations respecting the value of guineas, which only declared at what rate they should be current, but did not ohlige any person to take them at that rate." The ultimate effect of these proceedings was a degradation of both silver and gold coins; for as taxation could not, by these enhancements of the coin, be in the least added to natural or metallic prices, so long as the coins were of full weight, the only chance of relief lay in the diminution of the coins. In 1710, silver which was rated at 55. 2d. an oz. in coin was bought by the Bank for 55. 3c?. ; * Ruding, iv. 445. c 3 38 WHAT IS A POUND? ill 1728 for 5*. 6d. ; and the same in 1739.* In the latter year the shillings were deficient from 6 to 1 1 per cent. ; the sixpences from 11 to 22 per cent. " They were likcnvise very scarce." f In 1740 and 1741, the Bank bought silver at 5s. Id. and hs. Sd. an oz. In 1750 the Bank and Excise notify that they \vill not take guineas wanting 6 grains in weight : this is a deficiency of \s in the pound or 5 pe? cent. In 1758, the Bank paid 55. Id. an oz. for silver ; and in 1760, Lord Liverpool esthnates the deficiency in shillings at one-sixth, and in six- pences at one-fourth. In 1774 it was enacted that all guineas deficient in weight beyond 5 dwts. 8 gv. (the Mint weight being 5 dwts. 9 gr.) should not be current^ or pass in payment, " thus making gold no longer money." "l " This measure appears," says Kuding, "to have been in direct opposition to the true principles of coinage, and to have reduced the money in a great degree to the state of bullion, after a considerable expense had been incurred in order to give it a character totally distinct." § We have since then completed the operation by forbidding any sovereign to be a legal tender which does not actuaUy weigh its full Mint weight of 5 dwts. 3 gi's. In 1774 it was also enacted that no tender of any sum in silver coin exceeding 25/. at one time should be allowed i * See Returns printed for the Hous-e of Connnons, March 1 1 1811. t Kuding, iv. p. 1 '). X IVjid. iv. 45. § Ibid. iv. O'i. iL:'! WHAT IS A POUND? 39 as a legal tender; but in 1816 this sum was further restricted to 40.9. In 1819 bank notes were made payable on demand in gold at 3Z. 175. lO^c?., which is the value of gold bullion in our coin, estimated by weight alone. We have therefore now no money in England, except silver coin payable to the amount of 40^., and copper coin payable to the amount of I2d. No other is a legal tender: no other, therefore, is money. The victory over money is complete ! Yet after all, not so complete as you. Sir, seem to wish. You would " Make assurance doubly sure, and take a bond of fate," by waging further war against the promissory notes which are payable on demand in sovereigns of full weight. In your zeal to destroy every vestige of those means by which the taxation imposed on commodities may be added to prices, you call these notes money., and in that character would persecute them to the death. In the confidence of power, or " uncaring consequences " under the panoply of that fearlessness which is sometimes seen to abound in proportion as actual knowledge is want- ing, you say, " When I speak of money, T mean by money the coin of the realm, or / mean promissory notes payable to the bearer on demand, payable in the coin of the realm." Now, Sir, we have seen that the coin of the realm is no longer money, becaiise it is btdlion valued by weight ; therefore these promis- sory notes to pay btdlion cannot be money. They c 4 40 WHAT IS A POLT^D ? ll' are notliiiig more nor better than the old goldsmiths* 7iotes, Avhicli were connnon in England before bankers sprang up and by dealing in paper money ran away Avitli the > as you think now, that prices could not have risen but for the use of an inconvertible paper money ; that they ought not to have risen ; and that, there- fore, the Restnction Act was a fatal measure, because it enabled them to rise. But if taxation on certain commodities is increased, why should not the prices of those commodities be increased, and after them the prices of all others incidentally affected by their rise? You have never said a word upon this subject, and probably have never given it a thought : but it is far more important to be understood by a minister of this country than you are aware, or you would not have treated it so slightingly. It is made a great matter of complaint with you that the exchanges had become unfavourable to us, which was of course the fault of the Restriction Act. In general, Sir, when I hear any one speak in this manner of the exchanges, I am pretty sure he is unacquainted with the operations of which he is talking. But when you add, that " men of sa- gacity " observed, in 1810, that they had been for a long time unfavourable, it is difficult to refrain smiling at the mock profoundness and humorous gravity of the remark. What should you think of a stockbroker, whose business it was to watch the fimds, if he, after the lapse of thirteen years, wherein there had been a gradual rise, began to perceive at last that prices had been for a considerable period advancing: would you call him a man of sagacity f And with regard 46 WHAT IS A POUND? i; ■ -■ I \- \ ■'. i (i'i to the supposed calamity of an advance in tlie ex- changfis, should you think it a calamity^ if, when the prices of goods have been for a number of years ad\ancing among ourselves by the necessary ad- dition of taxation, the rise in the exchanges should prevent the foreigner from realising those same high prices in bullion, and thus preclude him from taking out of the country a greater quantity of the precious metuls than he ought to have ? Yet this, Sir, is the effect of what is called by the merchants an unfavourable state of the exchanges. These matters ought to be so well understood by a minister of this great commercial nation, that he should be in no danger of making such mistakes in speaking of them. Let us now see why the exchanges had become unfavourable. Those taxes, which for the seven years from 1798 to 1804 were 30 millions a year, were for the seven years from 1805 to 1811, 47 millions a year (exclusive, in both cases, of property tax). This increase naturally caused an increase in the prices of all goods, which were raised not less on the average than 17 per cent, in consequence. The rise of the prices of goods, being expressed in paper money and not in gold, rendered it necessary that bills drawn from abroad on England, and pay- able in Bank notes, should be drawn for this in- creased sum, that in return the foreign creditor might receive that sum in gold which he had in his own mind bargained for. Do you see any thing wrong in all this, taking the three operations into WHAT IS A POUND? 47 account as parts of the same system, — 1 . the tax- ation ; 2. the rise of prices in pa;^/ money ; 3. the difference in the exchanges restoring prices to their former gold level, and giving the foreigner no ad- vantage in dealing with us on account of any rise of prices among ourselves ? There can be nothing to object to, but every thing to approve of. Yet this. Sir, is all that is really meant by your ob- servation — that the exchanges had been for a long time unfavourable to this country. But you say Mr. Homer and the Bullion Com- mittee condemned the system pursued under the Restriction Act ; and Mr. Locke and Sir William Petty J and Mr. Harris^ entertained the same opinions on the subject which these gentlemen did. This is the most astonishing case I ever heard of; — that three men, who lived and died from 50 to 100 years before a certain complicated and unprece- dented transaction took place, " and who had not been familiar with inconvertible paper currency," as you with great naivete observe, should yet " ar- rive at precisely the same conclusions with the Bullion Committee." If they, who knew nothing of the case, as you justly say, are judged by you the fittest persons to produce as witriesses in its favour, then. Sir, those persons must surely have been mistaken in their estimate of your mind, who supposed you would have made an excellent lawyer. Petty, Locke, and Harris spoke only of the depreciation of the silver coin by wear and clipping, and about the best means of restoring and preserving it. Their 48 WHAT IS A POUND? hi 11 case was Jiltofrether a diflTerent one from ours : for, thougli taxation was in aonu; degree the cause of that depreciation or degradation of the silver coin which then existed ; yet, when we consider the altered circumstance's of the country, that, at that time, in 1693, our revenue was only 1,570,000/., while in the year 1810 it reached the enormous sum of 63,719,000/. (including property and income tax), we shall see sufficient reason to conclude that, with all their knowledge, Fetti/, Locke, and Harris are not fit persons to be produced as compurgators of Mr. Horner and the Bullion Committee. With one more instance of most curious mis- representation I close this criticism, wearisome to me, and not likely to be agreeable to you. Seeking, as it would seem, for a precedent or parallel to the case of interference with Bank issues, which was made by you in your memorable Bill of 1819, you speak as follows : — " Now at an early period in the his- tory of the Bank, when there was an entire con- fidence in its stability — (I speak of more than a century ago) — when the shares that had been issued at 60 were at 112, — at that time the Bank paper was so depreciated that a guinea in gold was worth 305. in paper, the same being the case as regarded silver, and the exchange was greatly against this country. ^Tiat did the Ba7ik do ? They had lent large sums to the Government, they had lent money on mortgages and in other ways, and they had sent out large issues of paper until they lowered the liiii WHAT IS A FOUND? 49 value of their pnprr, until tlio prfre of n t/uined was 30.S'. AVIuit, I say, did t/h' Ihvik do f Tlicy took the advice of eininent awn, and tlicy deteriniued U) limit the luiuber of tin; promissory notes tliey issued. The consequence was, that the ext'han«^es became in our favour, and tlie vahie of these notes was restored." It is certainly a case most remarkably in point ; so exact that had it been manufactured for the occasion it could not have fitted better. It supplies a precedent which f(jrms a complete justi- fication of the course pursued with respect to the Bank, in the working of your lUll of 1819. " But are ye sure the news is true? " — The recorded facts are very different from this statement. According to them, the Bank shares were not issued at 60, but at 100/.: they rose to 112 : but at that time Bank paper was not so depreciated that a guinea sold for 30^. in paper. Ba7ik paper was at no time so depreciated that a guinea sold for 30s. in paper. The Bank lent its capital to govern- ment, but it had not lent money on mortgages nor sent out large issues of paper. The Bank did nothing^ though some of the Directors were, no doubt, among those eminent men who gave their advice, of whom we have many now who can give advice to the Government which is to turn to their own advantage. The real facts are briefly these: — Government securities, such as Exchequer tallies, the original of our Exchequer bills, which had been issued at 100/., had fallen to 60/., being D 50 WHAT IS A POUND? at a discount of 30 to 40 per cent. The amount of them in the market would account for this fall : between the years 1089 and 1697 they fonned an unfunded debt of no less than 21,515,000/. "In 1G98," says Dr. Davenant, "we had upwards of fourteen millions in tallies, lottery tickets, Bank stock, malt tickets, and securities of the like nature, which Avent from hand to hand, having their foun- dation in the public faith." " That credit," he ailds, " which the Exchequer had once obtained served all the uses of trade lull as well as any fonnal established hank could hmie done" The Bank of England had nothing to do with this issue : it was altogether an aifair of the government. The Bank itself was not incorporated till July, 1694, when it began by lending government its capital of 1,200,000/. Its stock formed, therefore, but a small portion of the whole unfunded debt. It began by issuing notes of the value of 20/. and upwards ; but it could not pay its notes either in gold or silver. In 1697 they were at a discount of 15 to 20 per cent, and the Bank was "neces- sitated to pay those notes only by 10 per cent once a fortnight, and at length to pay only 3 per cent on those notes once in three months." When the silver was raised to its fiill weight by the recoinage in 1697, and these government securities were funded, then the Bank began to act ; and it raised the value of its shares to 112/., (including the tallies, which it had purchased to the amount of 1,000,000/., and added to its capital,) because then it had the con- WHAT IS A POUND ? 51 trol of the money of the state, and coukl make it as scarce and as dear as it liked. " Hy these means (says Anderson) the greate.st estates trrrc raised in the least time, and the most of them., tliat had been known in any age, or in any part of the worhl." The facts of the case, therefore, turn out on in- quiry into them to be very different from the account which you, Sir, have given of them, espe- cially so far as the Bank was concerned ; but there is still a resemblance in the proceedings of 10J)8 to those which were instituted for raising the value of Bank notes in 1819, in this respect, that hy the same rfieans., in this latter period as in the former, the greatest estates were raised in the least time., and the most of them., that had been known in any age^ or in any part of the world. I have now, Sir, stated, with as much freedom as an Englishman ought, but with as little offence, I trust, as the necessity of making so many pointed contradictions would allow, my objections to the principle on which your new currency measure is founded, and to the presumed facts by which it is supposed to be established. It is now my more pleasing duty to say a few words in recommen- dation of a system of currency directly the reverse of your own ; of which system I think I shall not be accused of speaking too highly if I say, that it has the advantage over yours in regard to Simplicity^ Expediency^ Justice, Humanity, and Policy. D 2 52 WHAT IS A POUND? Your system is founded, as I think, on a false notion of money. You believe that gold and silver, as commodities, when coined into pieces of con- venient size, authenticated and found to be of a certain weight and fineness, are money: whereas I contend, on the other hand, that they are, after all, mere bits of bullion, objects of barter, which we might have current among us just as easily and as well, if we had no government at all to take any thought or care about them. They want no sanc- tion of the government : it adds nothing to their value. If the Court of the Goldsmiths' Company were to issue coins on the same principle as the Mint does, it could do it as effectually and as use- fully ; and, therefore, we have nothing to thank the government for in coining what you call our money. AVe should do just as well if we took that trouble off your hands, and set up an independent gold issuing bank of our own. Mr. Burke, who had more statesmanlike knowledge than falls to the lot of most members of Parliament, or ministers either (begging your pardon!), saw this clearly. The Act of 1774 made our gold coin, as Ruding says, no longer money ^ by reducing it to the condition of bullion. Mr. Burke perceiving this, proposed, in his Economical Reform Bill, in 1780, that the Mint should be abolished because it was expensive, and that the Bank should supply all the money. Sir, was there ever before in the world a civilised country, enjoying a regular government, which had only such a circulating medium for its people as WHAT IS A rOUND ? 53 that which you proj)Ose ? Was a country like this ever known in which there was not a (government money in circulation^ which depended for its value, (not among other people, but) among the people of that country in which it was issued, on the circum- stance that whether it retained its orif>;inal weight or not, the government which issued it would re- ceive it again in taxation at the same rate at which it was issued ? Failing in this, was it not con- sidered to have broken faith ^\^th the peoj^le ? We had such money from the earliest times to the year 1699. The Bank of England then usurped one of the highest prerogatives of the crown, and by degrees introduced a system of money " falsely so called," w^hich was little better than a system of bits of bullion. But again in 1797 we had a sort of government money^ by means of Bank of Eng- land notes, which were received as such in payment of taxes, and generally in all transactions of busi- ness. Lord King broke through the charm, in 1810, by requiring gold to be paid for the rents of his farms, or so much paper as would enable him to purchase the gold. In 1811 the case of De Yonge and Wright established the fact that the exchanging guineas at a higher price than their current value for notes of the Bank of England was not an offence against that statute (5 & Edw. 6. c. 19.) which required an exchange of coin for coin. But to remedy this a new act was passed in July 1811, equalising all payments in gold and bank notes, and forbidding, as a misdemeanor, any one making D a : «■ I I. ■ 4- D! 54 WHAT IS A POUND? a difference. Thus Bank of England notes were not allowed to be bought with guineas at a discount^ which was tlie defence set up by De Yonge when he was charged with having bought guineas at a premium. But this statute did not make provision against the recurrence of such a case as that of Lord King's, and therefore Bank of England notes were still left defective as a legal tender.- In 1819 they were deprived by you of even that shadow of royal privilege which had hitherto attended them. Your present plan, Sir, would not again change their nature, nor make them money in any degree ; but it is culpable, because it prevents still more effectually than ever the possibility of any one making the smallest addition to the natural prices of his commodities on account of taxation. By authorising a reduction of the issues of the Bank till they are brought do-wn to eleven millions, you restore that average amount of Bank notes which was in circulation from 1789 to 1797; and as this was found insufficient then to allow of any addition to prices on account of taxation, except in so far as the deterioration of the coin favoured the operation, which deterioration is now prevented, you may be confident, Sir, that you have succeeded in your object when you have passed the present bill. In the latter half-year of 1789 we had 11,121,000 Bank of England notes circulation ; in the latter half- year of 1797 we liiid 11,114,120: taxation, in the interval had Ixen increased from 15,572,000 to 21,454,000, and the debt from 240 to 373 millions. -.Sr^^a^' WHAT IS A POUND? 55 Though we have now upwards of 50,000,000 of annual taxation to contend with, you will equally succeed in preventing prices from rising beyond their bullion level, — you ^vill even reduce them lower than in 1789; for from 1785 to 1789 our silver coin was so corrupted tliat it allowed room for some advance : 78 shillings were ascertained to be equal to 62 good shillings, and 195 sixpences to 124*. The shillings required an increase of 26 per cent, the sixpences of 57 per cent. Dollars passed for 55., being 25 per cent above their bullion value. To the extent, therefore, of 25 per cent prices may be said to have risen generally during this period. The genera] , rage of wheat for the same period was only 4^*. id.^ which was a moderate price. Let it be reduced in the same proportion that the dollar is enhai ed which passes now for 45., and the bullion equivalent for the quarter of wheat will be found no higher than 345. 10c?. Yes, Sir, you will carry out your object per- fectly by the means you propose ; but you must not suppose that, with such a series of checks as you require, your system has any claim to the merit of simplicity^ in comparison with that which you might deem it your duty, your privilege, your happiness, your glory to originate. For example, were you to issue government paper money ^ as you ought to do, to the amount of our annual taxation. :.M # See Ruding, D 4 vol. iv. 56 WHA f fS A POUND ? you would need no cherh as to the manner in which the people should use it and estimate it among them- selves ; you might banish all anxieties about foreign exchanges, or that ralue which foreigners would put upon it. They would, as you say, and as I have shown, take good care of their own interests; but would be prevented from injuring us by a rise in the exchanges. , I : i! ) i Nor can your system be reckoned expedient^ for this reason, — that whether we are a taxed or an untaxed people, we can do better for ourselves by a proper use of paper money than by restricting all payments to gold. You appear to have no concep- tion of this. Let me then, first, suppose that we are untaxed^ or that we have so little taxation im- posed on us that we do not feel it press on produc- tion so heavily as to require prices to be raised b'^yond their bullion level. In this case let govern- ment order sovereigns to be coined of their present weight, the subordinate pieces of coin being silver and copper as at present ; or, which would be of as great advantage to the people, let a number of competent persons unite themselves into banking companies, both in cities and to^vns, to receive deposits of coin or bullion, and to issue in lieu of them hank notes, promising to pay the bearer, on demand, the sum in gold or silver which the notes represent. If any bank coidd not fulfil this engagement it would fail, and all the property of the shareholders would be amenable to the discharge of its liabilities, which would efi^ectu- WHAT IS A POUND ? 57 ally secure the pul)lic from loss. In this kind of paper all persons would find it more convenient to make payments to ejich other than in gcAd; and foreigners wanting gold would get it on pre- sentation at tlie Bank. This paper would prevent the wear of the precious metals as coin, and save the trouble which attends the necessitv of weijrhina: coins, which would be a great advantage. But you will object, that, unless a restriction be placed on the issues, prices in these notes may advance so high as to cause the gold to be ex- ported as the cheapest coimnodity. Well, then, let it go. As no more notes ^vill be in circulation at any time than there is coin or bullion in the banks to represent them, no harra can happen ; the bank notes will disappear from circulation, and the gold will be exported: we shall then get it back, if we wish, by giving a due value in goods for it ; and trade both at home and abroad will ^o on as steadily as before. You fairly state this truth in your speech. " The law," you say, " that governs coin is exactly the same as that which governs other articles of commerce ; and it is proved by this: When there is a sudden demand for coin, if it is more profitable to send out woollen or cotton manufactun ;; than to send out coin, then depend upon it they will be sent out; and if they are unprofitable, then coin or bullion, which are iden- tically the same, will be sent out." This proves my case. As it is more convenient and economical to use bank notes instead of gold than to use gold, which will still bo to all intents and purposes the 5a WHAT IS A POUND? Tueasure of value at home, as well as in all our dealings with foreigners, my system is certainly the more expedient of the two. I mil now suppose that Ave are a heavily-taxed people, that we p^" f i much as fifty millions annually in taxes, \ ni: y-six millions of which are levied on commodities; and that the effect is such that men cannot generally be repaid their proper charges for taxation unless they receive fifty per cent more, or three sovereigns for that commodity which, without taxation, would have sold for two sovereigns. In that case, I say, let sovereigns be coined of their due weight as at pre- sent, and let silver and copper coins represent the fractional parts of a pound and a shilling. But. in addition to this, let government provide for an issue of paper money of the state to the amount of the annual taxation. For this purpose the esta- blishment of one bank of issue^ as recommended in your speech, will be desirable. You propose that the Bank of England should be the instrument made use of in this operation. I *.;tin see no great objection to this, if the government be satisfied with it. The details would be very simple. The bank of issue would have nothing to do but give out notes, to an amount authorised by Parliament, in payment of checks drawn by the Treasury for particular services, and in discharge of the in- terest due periodically to the holders of securities in the public funds. In this way so many notes would be issued during the first year as would WHAT IS A POUND? 59 amount, we will suppose, to fifty millions of pounds. These would be placed to the debit of government. On the credit side would be placed, during the pro- gress of the second year, the notes received by the Exchequer in discharge of the taxes ; these, in the course of that year, would equalise, and thus balance, the debit account of the year preceding ; while another issue of fifty, or fifty-two, or forty- eight millions, as the case may be, (the necessities of the country and the vote of parliament determining the amount,) would be going on for the service of the second year, alike to be balanced by the receipt of notes paid into the Exchequer during the third year. This, Sir, would be a substitute for that fourteen millions issued on the bank loan, and sixteen millions on bul' ^n deposits, which, accord- ing to your scheme, will constitute the principal part of our currency. But while the bank of issue was thus paying away its first fifty millions, the Exchequer would be re- ceiving fifty millions on account of the current taxa- tion of the first year. What shall the government do with this money ? Let us pay our debts with it : — 1. Let us pay off the Exchequer bills held by the Bank to the amount of twenty-one millions, and other bills of similar kind, constituting I'he unfunded debt. 2. Let us pay off the Bank loan of eleven millions ; and as far as the rest of the fifty millions will go, let it be employed in paying off some part of the National Debt. As the present Bank notes will all disappear from circulation when the twenty-one i ji GO WHAT IS A POUND ? r millions of Exchequer bills are paid off, on the strength of which they were put into circulation, — the ]jank capital of eleven millions, with such portion of what is called " The Rest," of three or three and a half millions, as the Directors may find it desirable or convenient to employ, will be found necessary to serve as a fund on which the Bank will now have to base its own proper issues. The business of the Directors will be to discount com- mercial bills with their own or with government money ; if with their own, they must purchase with their capital a sufficient quantity of government notes to be ready to take up their own with, on demand. Throughout these transactions government 7iotes will be the sole legal tender, with, of course, the gold pound at its full weight. That the country may have the benefit of any increased value that may attach to the gold pound when the system is in complete operation, it ill be desirable that the^ bank of issue should at once take charge of all the sovereigns in the Bank, and when they have risen in their market price to a height in government notes which appears to be their natural value in that paper, then let them be sold to any purchaser at that price, and let the profit be placed to the credit of the government account. This can be done with the greater facility and advantage, inas- much as paper money will be the universal medium of payment in all transactions at home, and the gold will only be wanted by foreigners at such WHAT IS A POUND? 61 times as they can obtain it at a cheaper rate than they get our woollen and cotton mainifaetures, as you properly observe. Now let us consider what objections can be urged against this system. 1. You will ask, — " What will your paper pound be? What will be that sum of one pound or of five pounds, to which tlie one pound note and the five pound note will respectively profess to be equi- valent ? The word ' pound ' is not to represent a definite quantity of gold or silver, or any metallic substance. Will it then be a mere abstract con- ception of value, corresponding with that which has been called by some writers on the currency, the ideal unit ? " To this it may be replied, that the one pound note and the five pound note will always exchange against our gold coin at such a rate of difference, as the necessity of representing our taxation by in- creased prices strictly warrants : — it will attain, but competition will prevent its exceeding, that limit. Let an office be opened where government j)aper may at all times in the day be exchanged for gold, and gold for government paper, at that rate which has been declared in the last Gazette to be the market price of gold in paper ; and the perfect convertibility of each into the other will have been provided for. By this method of conversion, the paper pound will always represent a definite quantity of gold from week to week, as stated in the Gazette (re- maining the same even for longer periods when once the plan has been established), but not an 62 WHAT IS A I»OCND ? I t' Ei invariable quantity from year to year, //' taxes havi been repealed or added to in the interim. In the event of their repeal, the price of gold in paper will diminish; in the event of their being added to, it will increase. The word pound, therefore, in government paper money, will always represent, whenever any bnrgain is made, a definite quantity of gold at the time, but not an invariable qitantity at all times. The degree of variation will depend on the acts of the Legislature with reference to taxation, of which taxation this pound will always represent One Pound. From this it will be seen that the notion of an ideal unit, a mere abstt'act conception of value, is altogether inconsistent with the principle of a government paper money. When the taxation of the country is less than twenty millions a-year, the paper pound will pro- bably be, as it was before the late war, of the same value as the gold pound. When the taxation has advanced to fifty millions a-year, the difference may be, as it was during the war, equal to fifty per cent. Increasing at this rate, the gold pound would rise, in relation to the paper pound, four- pence for every million of taxation imposed beyond twenty millions. With taxation not exceeding twenty millions, the price of wheat would be re- munerative at forty-four shillings per quarter. With taxation at fifty millions, it would be equally remunerative at sixty-six shillings per quarter. As the difference between paper and gold would be fifty per cent., the farmer would receive sixty-six WHAT IS A POUND ? 63 'e e shilliii^^s in pajKT money, and only forty-four shil- lings in gold, as liefore. Which is l>\st? A system which provideM for his taxation hei ng returned to him in the increased price of his wheat, without altering its natuml value in gold? — or a system which, requiring taxation as well as natural value to be represented by gold, would aim to increase to that extent the value of wheat in gold, which can only be done, in any degree, by increasing the dis- tresses of the people ? The legislature endeavours, by one act (jf Parlia- ment, to secure to the farmer sixty-six shillings per quarter for his wheat, on the ground of his heavy taxation ; and, by another act, requires that this sum shall be all represented in coins of full weight (viz., three sovereigns and six shillings), while the natural value is only two sovereigns and four shil- lings ; thus doing all in its power to force down the value of gold fifty per cent. Is this wise ? Since it is considered just that the farmer should be enabled to procure an increased price for his wheat, in pro- portion to his taxation — can it be a question, which of the two systems of money (governnient paper money or our present gold money) is best calculated to procure this result, without subjecting the mea- sure of value, gold^ to depreciation ? Is not this answer perfectly satisfactory ? What is the pound which you propose but such a pound as this ? " The pounds in government paper money, will always represent, whenever any bargain is made, a definite quantity of gold at the time, but not an m- J 64 WHAT IS A POUND ? vaiiahle quantify at all timesy Can you say more for your yold pound ? I iiuvc sho^vn, that, accord- ing to your own p^uarded expressions, it is a definite qnantitff of (jold at the time, and not an invariable quantity at all times, which your definition embraces. My pound, therefore, is truly defined by those terms which you employ to define your own ; and no sophistry can evade the conclusion tliat it is equally unexceptionable. 2. You will perhaps object, as Mr. Iluskisson did, that with this paper pound government cannot buy so large a quantity of stores as with the gold pound. Probably not ; but who has less right to complain of this than that government which, by laying on these heavy taxes, caused the paper pound to become of so much less avail in making purchases. But, in truth, the government have little cause for complaint on this head ; since it ii< but a small part of our national revenue which is applied to the purchase of stores, &c. I cannot imagine any other objections which can be raised against this system ; and therefore I am bound to conclude that on the ground of expediency it is vastly superior to your own. Let us now consider which of the two systems is most entitled to favour as being a just system, holding the balance fairly and steadily between the rights and claims of the people on the one hand, and their riders on the other. Yours is accused of the monstrous injustice of casting those burdens of taxation which the wealthy engaged to beai', and - WIIAT IS A POUND? 65 )re 'd- iite lOle fes. Ims 'no (lid bear before 1819, on the shoulders of those producers who were never intended to l)enr them. The amount thus imposed unjustly on the labourin<^ classes, is estimated at not less than thirty-three millions a year. A system of currency which will remedy this grievous evil, which will restore to the poor that share of the good things of this life which the providence of God has designed and provided for them, is a system which will have the approval of every honest man as ajmt system. Can yours be deemed a humane system, by f>ny one who has read the discussions on the Factory Bill ? That measure is cruel, which they now suffer under ; but your system of currency will ag- gravate the distresses of the overworked females and children. The use of government paper money, on the other hand, would enable the master manu- facturer to pay his operatives liberally for their services, without any fear of thereby enhancing the prices of his goods to his customers abroad. He could afford then to sell them for even less gold than he does now. By these means the vorking hours of these poor women and children might be reduced, not only to ten, but to eight a day ; and the present wages of twelve hours might still be paid for that diminished labour, without any injury to the manufacturer or any loss of our foreign trade. If there are any considerations which can weigh with you or the House, to cause you to pre- fer the paper system of currency to the gold system^ £ 66 WHAT IS A POUND? it will be, I suspect, those which relate to the su- perior humanity of the provisions for the ease and health of the young and delicate operative ; which are compatible with the paper system, but in direct contrast with those Avhich are insisted on by the ad- vocates of the bullion system. .1 Hi'-' ' ■ a >■ ■ Lastly, let us judge which of the two systems is preferable as to policy^ with reference to the present condition of the country. The paper system would enable the government to keep faith with the public creditor, by paying off the national debt; in the mean time rendering unnecessary any further re- ductions of the interest. It would justify ministers in proposing to Parliament the issue of large sums annually in the support of public undertakings of too great magnitude to be within the province of private enterprize, and of such general advantage to the country alone, that if private persons were equal to the task, they would not undertake it for want of adequate inducement. I allude to the con- struction of harbours of refiige round the coasts of England and Ireland, the deepening of rivers, the levelling of roads, the drainage of towns, the erec- tion of public edifices, the redemption of existing bridges from tolls, and the construction of others, the purchase and laying out of lands round towns as free places of resort for the recreation and healthful exercise of the lower classes, the pro- motion of education, and establishment of schools. By the demand for labourers in these under- takings, the workhouses would be cleared of most WHAT IS A POUND? 67 of their present inmates, and saved from the influx of others : the gaols would be emptied of their present occupants; and crime would become so much less tempting than the rewards of industry and virtue, that we should soon have a great diminution of the cases brought before our magis- trates, — those beginnings of evil courses, which make a commitment to prison the first lesson in the preparatory school of a life of wretchedness and infamy. By the opportunities of employment oiFered at public works, and the fixing (if neces- sary) a minimum of wages sufficient to secure the labourer a comfortable subsistence, the young, the single, the able-bodied men would find that market for their labour which would relieve from their competition the less able and more aged father of a family. Will your system, Sir, enable you to do or propose any thing of this kind ? Quite the contrary : it will preclude all pajnnent of the public debt, prevent you from being ever able to do more than barely pay the dividends — Tantalus a lahris — ; it will call on the poor producers of all the wealth for greater sacrifices of health and life than are now required, exhausting as their hours of toil are : it will lower the price of com as well as of all other commodities, bring on a stagnation of trade by draining the channels of commerce of their circulating medium, and consign the labourers in greater numbers than ever to the tender mercies of a poor law union house. " All hope abandon, ye who enter here!" 2 E IJ I 'J . I III !• (I ^1 III ti ill ' I ■ ■ i! i ! IF ^liii ' "1 68 WHAT IS A POUND? For these reasons, Sir, 1 conclude that the paper system which I propose, has the advantage over your bullion system in regard to policy. To conclude Money is a term properly ap- plicable only to that sort of circulating medium which is constituted a universal leifol tender in the country where it is issued ; which depends for its value not on its intrinsic worth as a commodity^ but on the circumstance that the government which issues it at a certain rate in discharge of its obliga- tions to the people, will receive it again at that same rate from the people in discharge of their obligations to the state. In this respect, coins of the genuine stamp^ however deficient in weight, and that paper money also which is issued by authority of the state, are money. They are entitled to Le universally current, and will be so among th<„ people of that country to which they properly belong. All such money it is within the province of a government to interfere with and to regulate. On the other hand, 1 . All coins which depend for their acceptance as a h^nl tender on the condition that they shall be of full weight, are not money, but bits of bullion, estimable in all countries according to their intrinsic value, and deriving no advantage in any way from privileges conferred by the state ; 2. All promissory notes to pay on demand those same bits of bullion of a certain weight and fineness are not money, but evidence of a contract entered into be- tween man and man. 3. All promissory notes to pay WHAT IS A POUND? eff a certain sum in that legal tender which is money, are themselves not money ; they are merely an ac- knowledgment of debt, of the claim to which debt they constitute a transfer when they are endorsed and paid away. With all such commercial currency, improperly called money, a government has no more right to interfere, under the pretext of regulating its quantity^ than it has to interfere with the manner in which men conduct their other affairs of business and manage the concerns of their own families. In the last place, silver is not our standard mea- sure of value, nor ever has been since gold was first coined in this country, which was exactly 500 years ago. Ever since that time, the gold pound has been our standard measure of value for all sums of ofie pound and upwards. This standard pound has undergone many changes since the year 1345, when it represented as bullion the sum of 3/. 12^. lOd. of our present money. It has been altered in weight eighteen times since then, but always in the way of reduction, except thrice : the first time being in 1552, when the coin of two years before, value 28s. 2c?., was called in, and a new coin issued of the value of 296., a difference of 10c?. ; the second being in 1558, when the coin of five years before was raised, in like manner, from 26s. Sd. to 29s. ; the third, in 1620, when the difference was no more than Sd. in 23s. Ad. These few and trivial changes were all that were made in the way of enhancement till the year 1819, when the value of the gold pound, our standard measure of valu£, 70 WHAT IS A POUND? r *i which had been repi-esented by the Bank of Eng- land note for twenty-two years, was raised nearly, if not altogether, 50 per cent! But mark another important difference • On all the three former occa- sions the country lia^l no debt to pay ; while we have now a debt of nearly 800 millions, 600 of which were incurred in the standard measure of that depreciated pound. The annals of the world furnish nothing like a parallel to this enhancement. It is, and will for ever remain, an unprecedented TRANSACTION, all the merit of which, Sir, you may safely claim, for no man of any feeling would wish to share it with you. After all. Sir, there is too much reason to fear, from the apathy with which your resolutions have been received, that you will carry your measure, and completely succeed in fastening on the industrious classes of this country the fetters prepared for them by your former Bill of 1819. But I do not de- spair : nor do I regret that I should have made an ineffectual attempt to withstand you by publishing these hastily written pages, which will have been not only written but printed in the brief compass of ten days. There are Errors exposed, and Truths expressed, and Principles laid down here, which willi not be soon forgotten, but will outlive the occasion that gave them birth. Ere long the Currency Question will again demand attention. Your suc- cess now is but the prelude to your defeat here- after. Your measure carries with it the elements of its own destruction. Your triumph will bo ^ WHAT IS A POUND ? 71 \ank of Eng- ised nearly, if nark another 5 former occa- ly; while we Llions, 600 of d measure of J of the world enhancement lUPRECEDENTED , Sir, you may ng would wish your overthrow. 1 could predict with tolerable exactness what length of time will elapse before it comes to an end, ••••••••»«•• " like the poor Indian's sleep, While his boat hastens to the monstrous steep Of Montmorency ! " — when this great measure of yours, on which you so much pride yourself, will be swept away for ever, with some other things which many of your supporters will be more sorry to lose; but it is sufficient to say, that the day is not far distant. am, Sir, reason to fear, esolutions have Ir measure, and the industrious epared for them t 1 do not de- d have made an u by publishing will have been e brief compass josed, and Truths here, which will tlive the occasionj g the Currency] ion. Your suc- loar defeat here- it the elements riumph will \A Your obedient servant. AN INQUIRER AFTER TRUTH. May 20. 1844. LoNboN : Printed by A. Spottiswoodi, New- Street- Square. 4 I