« AnkstesnisTęsti »
claimed to the world everywhere our starvation state. Thus they induced extensive and wealthy farmers to store past their grain on speculation. That has been done, to a considerable extent. They persuaded importers to retain their stocks until prices were forced up here, and raised, of course, elsewhere, over their necessary level. In this way three to four millions, at least, were paid by the nation, more than should have been given, or than it was really necessary to give for the corn that we required to import.
It is next alleged that the construction of railways has employed capital largely, and induced a scarcity of the circulating medium. That is the statement, and it is contradictory. It proceeds on the common mistake that capital currency, and currency is capital-that the two terms mean precisely the same thing; whereas the circulating medium either may be capital itself, or its representative. In this country the currency is composed partly of real capital, and partly of its representative; and the questions regarding it rise out of the proportions in which real capital and its representation should be employed in the formation of the currency. The construction of railways has not reduced the currency. It has not taken, and cannot have taken, one from the number of sovereigns or bank notes in circulation. The contractors neither piled their embankments with sovereigns, nor garnished them with bank notes. Every shilling paid out by them has immediately gone into circulation and performed its usual functions, with the exception of such sums as the labourers may have retained in their own possession, and they must come to a trivial summation.
The deficiency at present is not in capital, but in currency. The capital of the country may have been reduced, but it has not suffered to an extent competent to produce the existing embarassment. The highest calculation made of the payments for bread stuffs to foreign countries is twenty millions. That is considerably over the actual sum, while we have to reckon, not the absolute payment, but the payment over the average of years, in estimating the weight of this importation as a cause of the existing distress; but the highest calculation is, that twenty millions have been paid. We should, therefore, expect the capital of the country to be reduced twenty millions. Of course that is the actual reduction, met in some part, if not entirely, by whatever profits may have been created. Take the twenty millions, however, as entire and absolute loss, and see how far that accounts for the depreciation of property during the year. The fall in the value of funds or national stock since this date of last year is 12 per cent.; which, on the entire debt, is equal nearly to ninety-five millions sterling. The reductions in the selling price of stock and shares in public companies is equal to a similar sum. In these departments of business alone, the depreciation of property may be stated, in round numbers, at two hundred millions. How, then, can the expenditure of money for grain or on railways account for this vast loss? By forcing stock and shares into the market, their value has been reduced farther than the precise loss that rendered their sale ne
By the Act, 1844, the currency is limited, 1st, to the fixed issues of the Bank of England, and the banks existing previously to the date of the Act; 2d, to such notes as they may issue on the security of gold absolutely in their possession; and 33, to bullion. This Act provides, 1st, that as gold is exported, the paper currency shall be contracted-for every sovereign exported, a bank note is withdrawn; 2d, that no new banks of issue shall be formed, even to replace those that may resign business, after the date of the Act; 3d, that the amount of currency shall oscillate with the price of provisions; but 4th, that it shall move in an adverse direction; for while, as wheat rises, a greater circulating medium is required for its exchange, the Act provides for the reduction of the latter; and as wheat falls in price, and a less circulating medium is necessary in its sale and purchase, the Act provides for the increase of the latter; as if the Legislature were delighted by the occurrence of exigencies, and found their amusement in the construction of panics. The act, perhaps, was intended no illustrate the proverbs of the country: "It never rains but it pours." Peel made that legislation. Misfortunes seldom come alone." Peel turned that into a statute. The improvident man lights the candle at both ends." nished an example of the best means of accomplishing this feat, in 1844 and in previous years. This kind of work would form nice games for children, but the amusement is rathsr costly to be pursued by the legislature of the first commercial nation in the world.
The reasons assigned for the Act are, first, to secure the convertibility of the paper currency-that is to say, the solvency of the issues; second, to prevent over-trading; third, to secure the currency against depreciation. Ilas it answered any one of these objects? We shall see. It does not answer the first, viz., to secure the conver tibility of bank-notes; because neither the Bank of England, nor any other bank, could at this moment, or any other period, pay in gold if required. After all our sacrifices to accomplish that object, it is unattainable. When the people of Babel wanted to build a tower to reach the skies, they sunk a great amount of capital and labour, and certainly approximated their object, but for all practical purposes they made no progress. Peel's bill brings us into a similar position. We are nearer an unattainable object than we might be under imaginable circumstances, but the object is still unattainable. The Legislature merely say that the circulation of Bank of England notes will never fall under, or probably even te, fourteen millions. This is merely saying that the holders will always leave out fourteen millions for which they will not demand gold. This is not providing for their conversion; but only presuming that the country will not at any time ask more than a given number to be converted. We need scarcely say that other bankers are in a still worse position in this respect than the Bank of England. The idea of the convertibility of bank paper is therefore fictitious. Its safety is based on the credit of the issuers, and that credit is more likely to be promoted by investing their capital on productive than unproductive securities; but gold is unproductive.
Again, bankers generally hold much higher sums in deposits than they have in circulation. The deposits of the Scottish banks must exceed their circulation in the proportion of twenty to one. There is no security af
forded for the convertibility of these deposits by Act of Parliament. The public have their security in the confidence placed in the banks-yet are quite at ease regarding the repayment of their deposits, and would cheerfully accept the same security for the minor sum that they hold for the major, if the Legislature would avoid interference with their transactions.
This bill, however, we are told was intended to prevent over-trading. Has it accomplished that object? Its sincerest advocates give a decidedly negative reply. Mr. Charles Wood says there has been over-speculation. The Times assails the railway directors. All parties and everything, except the parties and the measure absolutely liable, are accused of causing that crisis in which the country is fixed. One thing is certain-the bill has not accomplished its second object-has not prevented over-speculation and over-trading.
Thirdly, this bill is to prevent the depreciation of the currency. It is on this topic that men talk the greatest nonsense. Here it is, always, at this very spot, that Peel in triumph shouts-What's a pound? Nobody answers. And yet the answer is easy. Peel might as wisely cry— What's a hundred weight? what's a yard? what's a mile? They are all conventional terms for measures of space or of weight. A yard is thirty-six inches, and a pound is twenty shillings. The currency cannot be depreciated, and a pound note cannot bring less than twenty shillings, so long as notes are convertible. They are, and will continue to be, convertible while public credit stands; and they will become inconvertible, and be depreciated, if ever public credit be doubted. We beg, in reference to this delicate affair, to whisper a secret to the bullionists, as they are termed. They are bringing the currency into danger of depreciation. It is in danger at this moment. Should consols, which fell between 20th September, 1846, and 25th September, 1817, from £98 10s. to £86, fall equally far before September 1848, the currency may become depreciated. The difference in value on twelve months from September, 1847, to September, 1846, on the Bank of England stock of fourteen millions, for which it issues notes without a gold backing, is £1,750,000. The bank has added one per cent. to its dividend, and a few hundred thousand pounds to its rest; but there are often no partics blinder than capitalists. The shareholders are exulting in their dividend. They are chuckling over nine per cent. and their nominally increased rest. Let them turn over the next page. There is one half of all the rest swept away by a single year's depreciation of property. But you don't want to sell; you don't need to sell, you say; that is just as the public pleases. Your notes are convertible. Such is the object of all Peel's bill-making. Well, the public begin to think that your stock is reduced in value. They see the fiction of convertibility. Consols, we shall say, are seventy-five or sixty-five. The change may happen. Louis Phillippe is not immortal. Queen Isabella is in bad hands, and may die. Consols may be at seventy-five; and your rest exist on paper, and paper alone. The public see all these transactions. They know their nature. They remember that gold is something exchangeable any where. They recollect that he who comes first is served first. Where, then, is the convertibility of your notes, and how, we pray you, regarding their depreciation? For how much would they sell when the bank had no more change
nothing to offer but Consols, quoted £0 0s. Od., for present cash.
What accrues to the Bank of England is the fate of all minor banks. They all hold Government stock. Their notes are Government bonds broken into divisions. A five pound note is merely one of two hundred divisions of a thousand pound Exchequer bill. The value of the notes hangs greatly, therefore, on public credit. With the exception of the notes of the Scotch banks, a few joint-stock companies in England, and the north of Ireland banks, the shares of which are held by many partners, whose private property is liable for all the debts of the company, there is not the slightest doubt that all the paper currency, above the amount of gold actually on hand, is Government stock broken down, and dependent for its value on the state of public credit. Farther, even those jointstock banks we have named, where every penny belonging to each shareholder is liable for the debts of the concern, must be heavy losers by each depreciation of public stock. We apprehend that, if they had always taken the Government stock held by them in their balance sheet during this Autumn at the money it would bring, the dividend had not been large, for all, or nearly all, hold stock, and sometimes largely.
The cries of a depreciated and an inconvertible currency should be thrown back on those who make them. It is the Peels, the Woods, the Lloyd Jones's, the Times, and the Morning Chronicle, the monied interest, and its instruments, that threaten to give us again the infliction of a depreciated and an inconvertible currency. Matters will go all very well if they can always pull up in timevery well for them and very ill for all the industrious classes. But they are on a slippery and dangerous hill. They drive on a steep run, where one or two extra jolts would give them a higher interest for money, and a greater depreciation of property than they either expect or desire. They are getting on the descent, and may go farther than they bargained for.
They wish to protect the currency from depreciation. That, they say, is the object of their legislation. The object is good; but a guinea may be bought at too high a rate. In order to protect the currency, say thirty millions, from depreciation, they have actually succeeded in depreciating Government stock within a single year by ninty-five millions! They never contemplated bank notes at more than one-third under twenty shillings of silver, which gives a loss of ten millions; and against the probability we are protected at an absolute sacrifice of ninety-five millions-thus losing in the market value of one description of property-after deducting the twenty millions paid out on foreign corn, a sum of seventyfive millions, in order to save us from the probability of losing ten millions, from which we are by no means saved, although, in addition to this loss, we have to add an equal sum on shares and other property.
These are the fruits of Government intervention to dry nurse and take charge of business. What right has the Legislature to keep protecting men from themselves, in any way or measure, above what may be fairly done by providing, for example, that weights shall be accurate, that measures shall be just and for the public convenience, that men who issue notes payable on demand, expected to pass current in society, shall possess property equivalent to their issue? They have no right
to make monopolies, and create exclusive privileges. They have been abolishing corporate monopolies, and proclaiming freedom of trade everywhere; and yet they endeavour to cramp and fetter the springs of trade and the essential means of exchange. Their conduct is one of the most apparent pieces of self-contradiction that the Legislature has ever produced, and it is compelling the operatives of Manchester to beg for idleness now, that idleness in the winter months may be averted.
THE deep and tortuous intrigues of the French King in Spanish politics, are likely enough to be defeated. Ile despatched Narvaez from Paris, with a list of a ministry for the acceptance of the Queen. Resistance was not anticipated; but yet the proposal was resisted; Narvaez and his list were declined, and another ministry formed. The first act of the new Government was an amnesty which permits, and even invites, the return of Espartero, who has been restored to rank in the Spanish army; and if the Government resist the pressure of Parisian gold, which is said to be freely spent at Madrid, it is by no means improbable that the disgraceful system of manage ment which has impoverished the Peninsula may be permanently reformed. The interest of this country in Spanish is more apparent than in Italian affairs. We have lent Spain over forty millions sterling, and need the money, or its interest, badly; but there is no rational hope of recovery until the population be brought into a more settled condition, and industry be protected. The debt is to private parties, but on that account not less a national object. The loss of twenty millions in grain and potatoes last harvest, though falling on individuals, was a national calamity; and we may remark that, when the monied interest, through their organs, impute so much suffering to the loss of twenty millions on the harvest, or the investment of fifty millions on railways, it is remarkably singular that they were silent on the loans to foreign states.
AFTER the Queen's agreeable visit to the Highlands became stale, and the Praslin tragedy was fully discussed, Pope Pius the Ninth and Prince Metternich came gallantly to the rescue of the daily press. The Roman Pontiff, the Duke of Tuscany, and the King of Sardinia, contemplated some reforms in their various states. These three powers together give a population of ten millions, with whom all the Italians sympathise. The reforins contemplated appear to be on the smallest scale. They are proclaimed through the press as matters of great importance. To Austria they are, to Britain they are not important. To the Emperor, who fears the rising unity
and power of the Italian States, they are frightful; to those in this country who will rejoice to hear of any progress made towards constitutional freedom, they are gratifying, but not great.
The Roman Pontiff has issued an amnesty to all politi cal offenders. The act was benevolent and politic in his position. From a pontiff of opposite sentiments, it would have been still more merciful, and perhaps equally politic. He has even made a complete change in the It means that he Executive. Let us comprehend this. has conferred place on his own friends. That was natural. In this case it will be probably beneficial to the people. It is also said that he has curtailed the expenses of Government. This was necessary. The expenditure had gone above the income, and we really know not how the credit of Rome stands on the Exchanges, but we fancy it may be low. He has next armed the National Guards. We shall understand the phrase fully by saying that he has called out the yeomanry: only they are not all mounted. This is the great offence to Austria. To avenge it Austria arms on the Po, and seizes the town of Ferrara. The fort of Ferrara was held
by Austria on treaty. Its claim on the town seems to have been by no means clear. The Pontiff demands the withdrawal of the Austrian forces from the town The King of Sardinia, and, we understand, the Duke of Tuscany, have joined in this demand, and in the protest against the occupancy of Ferrara. The Austrians appear to give little regard to these protests, and keep the town. In this dilemma one portion of the press work had to get an armed intervention from this country. We have all the common cut and dry phrases regarding constitutional rights, freedom, and so forth. Up to this date we have gathered nothing, and freedom has gained little by our intervention in its name, and on its behalf, with the quarrels of foreign nations. In Greece, in South America, in Portugal, in Spain, even in Belgium, what has freedom-what have mankind gained by our armed interference? The romance of politics would lure us into war with Austria for a mirage; because it is not liberty, but a mirage, when rulers use the name; but cling to the censorship of the press, and refuse a representation of the people. This quarrel may promise very fairly for a revolution. Any quarrel between the head of the empire and the head of the church must be useful to their subjects. Meanwhile, it is a matter regarding the balance of power on the Continent; and experience may teach us to look on without striking into the melee, until it has a somewhat higher object. Sanguine and romantic politicians would have our fieet in the Adriatic, before they even knew the purpose for which it was to fight, or had made a single stipulation for the Italian people.
PRINTED BY GEORGE TROUP, 29, DUNLOP STREET, GLASGOW.
THE CRISIS AND THE CURRENCY.
WE did not anticipate last month, that before | Rothschilds have paid eleven per cent.," as if, at our present issue the Currency Bills of 1819 and last, we had reached the lowest depth, and in 1844 should present so many strong arguments that fact got to the worst of the whole matter. against their preservation as they have given. If Two gentlemen in a Scottish town wanted to pay we had indulged any expectations of that kind, fifteen hundred pounds in London; but as one they would have been accompanied by the con- of them was to be on the spot, they applied to a viction that the Government would have heard banker for a letter of credit for the amount. The the alarum which these measures, self-acting in order was obtained, and was good for fifteen hunthat respect, have sounded loud enough to rouse dred pounds, as, from the stability, resources, everything short of incurable deafness. The and numbers of the partners in the company, it Indians say that the Great Spirit made certain would have been good for fifteen millions. It snakes to rattle as they moved, that their intended was presented to the London agents, and accepted victims might be warned of their coming, and by them; but the holder wanted his money at avoid their dangerous foe. Peel's snakes rattle the date of acceptance, and desired them to disalso, and rattle loudly, but they enjoy the power count their own bill, which had not more than of fascination, and have charmed vitality, or voli- twenty-one days to run. The request was detion, out of those who should fly from their ap-clined. There was no difficulty for houses in good proach. Their virtue was to consist in their self- credit obtaining money; but this house was not action. They were to be the perpetual Bude lights in good credit with itself; and yet it had some. of commerce, casting their rays in uninterrupted thing to do with the origin of the Bank Charter cheerfulness over its darkest wastes, and becom- Act; is making more than one thousand pounds ing brighter as the gloom grew darker from every daily by following the trade of the Cornish other point. The promises made for them, like wreckers in commerce; and returns thanks steaDelphic responses, have been realised. They are dily, and in its way sincerely, for this long-conself-acting, they are self-warning, and they are self- tinued and seasonable storm. We know not the illuminating. Commercial men may have under- amount for which the bill sold; but one very stood these promises in a different sense, but they good bill at three or four months-an admirable have not at least been broken to the ear. Their bill for a thousand pounds, partly run-fetched alarms, however, fail to move politicians. The the highest possible price of eight hundred Chancellor of the Exchequer, at the close of last pounds, being at the rate of sixty to seventy per month, had indeed discovered that houses in cent. discount. It was, however, a very good bill, good credit experienced no difficulty in procuring and done low. money at the end of this month, he regrets the Looking at the rates of discount publicly stated existence of intense mercantile embarrassments.-6.6 and 7 per cent. in Scotland; 6.6 and 7 The last month's opinion of the Chancellor of the Exchequer was not void of truth. There was not then, and there never was, much difficulty for houses of good credit in obtaining money; but the credit of houses was greatly reduced. The difficulty really seems to be in finding anybody that may be said to be in good credit. It cannot be the Chancellor of the Exchequer, for his bills are at a discount. President Polk is but in very slim credit, for his paper is neglected. Louis Philippe has lost caste, and can barely raise ten millions. Even the Roman Pontiff can rouse the dead, and awaken the latent life of Italy; but he cannot raise two or three millions. In the mercantile world men look serious, and say, "Why, the
VOL. XIV.-NO. CLXVII.
per cent. in Ulster ; 8 to 10 per cent. in London; 9 to 11 per cent. in Liverpool; 7 to 8 per cent. in the Bank of England-it may be asked, how can such sacrifices as £200 on a good bill of £1000 be made by some men? The answer is quite obvious.
Bankers have a choice of customers, and although willing to accommodate persons who regularly transact business with them, yet they have sufficient anxiety to keep their ordinary business in motion without taking up new parties, who were in the habit of dealing with bill-brokers, or with private bankers, now unwilling to lock up capital, unless for such temptations as have been current for some time.
The progress of the money plague has been
portunity, that supply will regulate demand; that Government should not intermeddle with commerce; that business should be left unfettered; and yet he fetters and binds the moving power of all business and all commerce. Now, when commerce is in its agony, those who speak and write for him while he is silent blame railways; and yet this statesman could have laid his hand on any railway bill, or any number of railway bills, and interdicted their progress; but he never interfered except to lift the first sod of a line which saves some distance on a long journey, while some of the great trunk lines in these islands remain incomplete. They blame, again, imprudent corn speculations; but this statesman, and other statesmen, by circulating unguarded alarms and gross miscalculations-by permitting themselves to be deceived by interested personsfed this speculation; and even in the month of June last, the present Premier and the present
during the last month rapid and decisive. The history of British commerce has many disastrous pages, without one containing a record of depreciation in property so rapid as that of the last month. Rich men in August are in penury with October. The cautiously-hoarded and hardlygathered earnings of individual toil and care for many years are swept into Peel's gulf; but Sir Robert Peel and Samuel Lloyd Jones are wealthier than they were a few months since. We dare not say that Peel's legislation was intended to enrich himself and his family. We must not hint that he laboured for his order and for himself irrespective of the public interest. We are free, however, here to declare, that if his personal aggrandisement had been the sole object of his legislation, he could not have devised more fitting measures for his purpose than those of 1819 and 1844. In all cases a man's interest naturally bends his mind. The most Aristidean men are somewhat moved by an almost imper-Chancellor of the Exchequer gave the weight of ceptible and invisible influence springing out of their own interest. There is a natural bent in the mind towards whatsoever advances its personal objects. Men are apt to think that good for others which is good for themselves. Concession to this feeling ripens into political turpitude, Louis Phillipeism, and all descriptions of jobbing on the minor or major scales. Resistance to it constitutes political virtue, and disposes men to examine very carefully such measures as seem to promote their own fortunes, before they yield them their support. Sir Robert Peel is a man and a minister of expediency. He does not think very deeply on abstract subjects, but applies his power to the purposes and the necessities of the day. He may never, therefore, have given this subject any consideration, but merely followed in his monetary legislation the latent current in his mind that induced him to consider certain steps right, because they were to him steps on the ladder of fortune; and he may have followed that course without a perverse, determined, and criminal intention. His followers, and many of his opponents, will call this statement illiberal and uncharitable. Charity is certainly a very necessary virtue, but even charity is not wide enough to cover all the occurrences in this world. There is a spurious charity—a mere cant and pretence-that would paint the Ethiopian white and the leopard unspotted, without changing the habits of the man or the nature of the beast; but it is not suitable for our day and circumstances. We find a statesman legislating on monetary affairs directly against the entreaties and remonstrances of the bankers of London and the bankers of Scotland; the two We have glanced at these subjects in order to classes of men, from their position, their ex-make some estimate of the breadth of charity reperience, and their success in the various details quisite to cover all the personalities in these transof their business, best qualified to form an opinion actions, which are destroying the capital of indion this topic. We see a statesman avowing his viduals, overthrowing the high mercantile characpreference of free trade principles, and zealously ter of this country, and subverting the means of establishing a monopoly of money, the great fly-feeding and employing our population. wheel of all trade, while in every other depart- The devastation caused by famine in Ireland ment he is endeavouring to obliterate even the shadow of monopoly. We hear a politician declaring, in every possible form, and on every op
their official information to the mistaken rumour that the potato crop had failed. Then, in such cases as those of Larpent, Cockerell, & Co.: Reid, Irving, & Co.; Lyell, Brothers; Barclay, Brothers, and houses similarly engaged in the colonial trade, the public have been told that there has been over-trading, with insufficient capital and an artificial credit, that should be brought down. Few statements can be more cruel. Each of these houses had clearly a very large capital in its business. The accounts of assets and liabilities do not at first show the extent of this ca pital. They do not profess to give the result of examinations into the affairs of the houses named farther than is necessary to educe their existing means. The accountants, in these cases, did not seek to unravel more than the paying power at the disposal of their clients, and did not enter on the causes which have led to its reduction. These causes are, however, quite well known. Investments in colonial property have been almost destroyed by recent acts of the Legislature, supported by Sir Robert Peel and by the present Ministry; who, in islands of the utmost fertility, where land is cheap-where, indeed, any quantity of land can be had for little more than its reclamation-have created and maintained an aristocracy of work, and say that they are trying a great experiment of free-trade against slave labour, while they refuse to allow free-trade in labour, and seek to have a fixed currency of workmen as they try to have a fixed circulation of five-pound notes in this country, and a fixed price for one leading element in commerce.
last season is to be rivalled by distress in England in the coming winter, if the symptoms of the country be not changed. By just or unjust means