off 30 per cent from the fund-holders on pretence that they would only be brought to the same situation they were in before,-is a fraud of the same nature as if in a ship's crew on short allowance, three-fourths of the crew should propose to divide among themselves any accidental relief they might fall in with, and say to the other fourth, And you, you know, will be no worse off than you were before.' The fraud is in pretending not to know, that this fourth of the crew have as much right to their share of the relief, as any of the rest. The fund-holders pay their share of taxes, like other people. If there is to be a property-tax, they make no objection to paying on their funded property at the same rate as others. What they object to, is being taxed and plundered too. 6. That the evil of a national debt can no more be relieved by refusing to pay the interest, than a man can get rich by taking out of one pocket to put into the other. It is one thing to say a national debt is no evil, and another thing to say it is an evil that cannot be diminished by refusing to pay the interest; though these two things are often taken for each other. The mischief inflicted when a million is borrowed and spent, is the same that would have been produced if a necessity had been created for throwing the amount of the interest annually into the sea. For if the debt had never been contracted, the sums now paid for interest would have remained in the hands of the taxpayers; which would have been the same thing to them, as saving it from the sea. And the people to whom the interest is now paid, would have had the principal in their pockets instead. But it is necessary to make a broad distinction between the effect of the debt,'( meaning the difference between the actual state of things and what would have been if the debt had never been contracted), and the effect of continuing to pay the interest of the debt,' (meaning the difference between what takes place when the interest continues to be paid, and what would take place if it ceased to be paid). If every man in the country was a fund-holder in the same proportion that he is a tax-payer, it would be plain that any attempt to mend himself by refusing to pay the interest, would only be taking out of one pocket to put into the other. And the case is the same, when things are as they are; except that the fund-holders are the smallest number, and therefore might possibly be robbed. 7. That the question of whether there shall be a paper currency, is quite distinct from whether there shall be a depreciated paper currency. That the government, if it chuses to go the way to do it, may substitute paper for gold without any depreciation, and put the value of the gold into the pockets of the nation at large by taking off taxes to the same amount ;-through the simple process of never issuing more paper than is found to make the pound note purchase not less than a certain prescribed quantity of gold. But that if it does not like to do this itself, it has no more right to let other people do it, than to let them carry off the pitch and tar from the dock-yards and apply it to their private use. And that, in reality, every private bank-note in existence is only so much of the public property allowed to be carried off by private individuals, in the same manner as the pitch and tar. 8. That the statements of the benefits to be derived from the increase of private bank-notes to the borrowers, are only statements of the convenience a man may find, in getting possession of a sum of money by taking it from all the holders of the circulating medium throughout the country; for this is what is actually done. And that in reality all representations of the advantages of conducting the business of the country by means of a larger number of coins or notes instead of a smaller, are only the representations of men desirous to make some unwarrantable gain, either by the issues or by the change of value of money consequent upon them. So far as these representations proceed from the private bankers, they originate in a desire, as truly stated by the minister, to coin. They originate in a desire to make money at the expense of the holders of the circulating medium, and then be paid interest for lending it. There has been a prejudice against coining when practised upon metal; but it does not seem to have been generally discovered, that there are the same or greater objections to coining upon paper. The only substantial objection to the individual who makes a coin that passes for a sovereign, is that what he gains is made by taking the value of a sovereign from the holders of the circulating medium in general; for beyond this, if his coin continues to pass, he does no harm at all. Where a bank-note is issued by an individual, instead of being issued by the government which accounts, or ought to account, to the community for the amount,—the same kind of process takes place, with greater profit to the actor, and consequently greater temptation to the repetition. If the minister does not take care, he will let light upon the nature of private bank-notes. 9. That if the government issues its coins at such a rate as will pay for the coining (and it is not a reasonable government if it does not)—a transit trade in gold is just as harmless and beneficial, as a transit trade in Turkey coffee or any other foreign commodity. It is true that every ounce of gold that goes out of the country, alters the value of what is left at home; and so does every ounce of coffee. But no government ever thought of nursing Turkey coffee, as the means of increasing the quantity used at home. For it is plain that it cannot go out of the country, unless it comes in ;-that if it is not allowed to go out, it will not come in, or not in the same quantity;—and that under a freedom of exit, the quantity kept and used within the country will always be the precise quantity which it is most profitable so to use. The whole of which is equally true of gold.-To object to the gold's being carried away coined,—if it is a profitable trade to coin it, would be as absurd as for Mr. Hunt to object to the French carrying away cakes of blacking with his image and superscription. If from convenience of form or other reasons, the French prefer the cakes to lamp-black in barrels, upon what ground of common sense is Mr. Hunt called upon to hinder it? 10. That if taxation is too high, the part of sensible men is to demand the reduction of the taxes; but not to demand a depreciation of the currency as the means of reducing the taxes. Such a demand would only be comparable to the conduct of a man who set his house on fire to warm himself. That if there is not a power in the country to effect the direct reduction of taxes, there would not be a power to prevent the taxes from being raised as fast as the depreciation was felt. The consequence therefore would only be, that we should have all the evils of the depreciation, without the expected good. Which would be like a man who should set his house on fire to warm himself, and not be allowed to warm himself after all. 11. That the root of all the evil is in the prohibition of commerce by Act of Parliament, which has been effected by the land-owners. They first produce universal distress; and then somebody is to be robbed by way of helping it. One day it is to be the fund-holders; another, the holders of the circulating medium and the labouring classes; and another, the church. Some or all of these will to a certainty be plundered, unless they have the sense to combine to put down the great original robbery, out of which arises the distress which is the plea for all the others. 'One step into the right' on the part of the minister who removed the Catholic disabilities, would rally all ranks and orders about him, except the plunderers; and honest men thenceforth might sleep in peace. Such of these propositions as are not derived from the Article on the Instrument of Exchange, will be found enlarged upon and supported by the following references, Westminster Review No. XX, Art. 5.-On Banking. No. XXI, Art. 1.-On the Corn Laws. No. XXII, Art. 13.--On the Change of Ministry in No. XXIII, Art. 7.-On Free Trade. Catechism on the Corn Laws, 14th Edition. OBJECTIONS AND THE ANSWERS. That the currency, in the year 1819, was just one-tenth of the whole productive industry of the country. Now, if the government altered that test which formed the currency, they altered the whole of the income of the country to the same extent. In like manner, if they diminished the currency five millions, they altered the whole income of all the farmers, land-owners, and manufacturers of the country, to the extent of fifty millions. This was the consequence of the alteration of even five millions. For, since all prices depend on the currency-and it surely could not be denied that all farmers, landlords, manufacturers, and merchants, made their incomes by prices-it followed that any contraction of the currency on which these prices depended, contracted to the same extent all the income derived from them. A. The error which runs through all this, is that of substituting nominal income for substantial;-the mistake of supposing that a man is the worse for being paid with four pounds instead of five, if the four pounds will buy as much as the five. If the case is accurately examined, a diminution of the currency, with the consequent increase of the value of money and diminution of money prices, is in favour of the dealers of all kinds and not against them. For the currency is increasing in value during the time it lies in their hands. The effect may appear insignificant in a single instance; but the sum of all the effects is, that if a particular trader is in the habit of turning over £100, and the value of money increases in the next twelvemonth by 5 per cent, he will afterwards only turn over £95, but the £95 will do him just as much good as the £100 did, and he will have put the value of £5 into his pocket by insensible gradations during the twelvemonth, over and above his ordinary gains. In fact it is a portion of the phenomenon stated in another place, viz. that the amount of additions to the circulating medium is taken from the holders of the circulating medium in general, and the amount of diminutions given to them. In all this, abstraction must be made of the effects of the change of value of currency upon old debts or obligations; which is a distinct consideration. That the currency is at this moment insufficient; as may be gathered from circumstances connected with the foreign exchanges. A. There is, in the practical sense, no such thing as a currency being insufficient. For its value will rise or fall, to the exact height required to make it perform its office. All solicitude, therefore, about the currency being sufficient for the performance of its office, is like being solicitous lest the survivors of a tontine should be inadequate to the division of the capital. Exactly as the number of shares is diminished, will the value of each be increased; and the contrary. An appearance connected with foreign exchanges may be a proof that the intrinsic value of the gold currency is greater than the nominal, or the contrary. But it can be no proof that the circulating medium is not sufficient for domestic purposes; which is the question in hand. 532 Postscript to Art. on Inst. of Exchange in No. I. April That the law says that a one-pound bank-note is productive of evil at Carlisle, and the reverse of evil at GretnaGreen. The people of Scotland cannot carry on their business without small notes, and the good people of Northum. berland and Cumberland cannot prosper with them. In one place they are useful, in the other injurious-in one country they are a safe and valuable medium, in the next they are an accursed thingthe root of all evil. submit themselves to the like absurdity. That the bankers in Scotland can as well afford to transact their business in a gold currency as those of England. They are believed to have more money invested in the funds than all the ban kers of England. The sum so invested amounts to upwards of twenty millions sterling, every farthing of which would be sold out and withdrawn if Mr. Peel would but give notice of a motion for the extension of his bill prohibiting onepound notes. It cannot, therefore, be said that the bankers of Scotland are too poor to pay their notes in gold. There is not one of them who could not do so upon a week's notice. over with dirk and claymore, as long as A. They are accursed in both alike, if the super-subtle Scotch had the wit to find it out. But if our neighbours chuse to be the dupes of the moneymakers, it is no reason why people on this side the Tweed should do the same. The Scotch are quite welcome "to "stand by their banks with the dirk in one hand and the claymore in the "other" as long as they please, provided nobody troubles Englishmen to A. It is, no doubt, very agreeable to the Scotch bankers to have twenty millions receiving interest in the funds, and as a consequence of this, to be receiving interest in Scotland for paper to the same or greater nominal amount, the substantial value of which is abstracted either from the holders of the circulating medium or from the government. It is a job by which twenty millions or more, of the property of the community, comes into the hands of the Scotch bankers, in the same manner as if they were allowed to take an equal amount of tar from the dockyards; and it is quite worth standing this will be the means of keeping it. Would any man be bold enough to say It is a bold man that would say the that, situated as they were at present, the contrary. Addition to the circulating prosperity of the labouring classes would medium is what injures the labouring not be deteriorated by the abstraction of classes; and abstraction from it is in a portion of the circulating medium ? their favour. When there is an addition, they have to fight against the consequent depreciation, till they can raise their wages in proportion; and the probability is, that they never do absolutely raise them to that point. When there is an abstraction, they gain by the consequent rise in the value of money, till the masters can reduce their wages in proportion; which, though the masters are more favourably situated for a contest than the workmen, will still take some time in doing. Setting these effects on one side, it is indifferent to the labouring classes whether the amount of the circulating medium is 100 millions or £100,000. If it was the last, it would be necessary to have coins or notes for fractions of a farthing. And if they were not made, the evil felt would not be owing to a deficiency in the amount of circulating medium, but to a defect of subdivision, or in other words a want of small change. That the true principle of any change Placing the Banking system on a [in the laws relating to the issues of pri- broad basis,' means the same kind of vate paper] ought to be that of placing thing as extending the right to carry the Banking system on a broad basis. away the pitch and tar out of the dock-yards. But why is it to be carried away at all? and what are the car riers in the long run expected to give the ministers in return? 1830. Postscript to Art.on the Newspaper Press in No. XXIII. 533 POSTSCRIPT TO THE ARTICLE ON THE NEWSPAPER PRESS IN No. XXIII. So great is the accumulation of matter with which the zeal and kindness of friends have furnished us on the subject of the Provincial Press, that we purpose again reverting to the subject in detail. A few errors have been discovered growing solely out of remoteness from persons and places, or from changes which had arisen between the time of writing and the printing the articles. Of one of the most valuable instruments which the cause of reform has ever found, the Scotsman, we learn that it has not changed its management since it was started by the present Proprietors and Editors-that they have been from the first, the writers of by far the greatest number of leading articles; and that its circulation is nearly One Thousand Six Hundred copies-ranking among the very highest of the Scottish Press. NOTICE. The Westminster Review, No. 25, will be published on the 30th June next, and will contain Articles on the Distress of the Country-on Canada and the Colonial system-on the Balloton Planting and Vegetable Physiology-on the Life and Character of Thomas Jefferson-the Newspaper Press, &c. &c. |