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Resumption of Cash Payments
BY THE BANK;
THE CORN BILL,
AS CONNECTED WITH THAT MEASURE:
THE RIGHT HONORABLE THE CHANCELLOR OF THE
A. H. CHAMBERS,
BANKER, BOND STREET.
CHANCELLOR OF THE EXCHEQUER..
bo'yict UNDERSTANDING that it is the intention of certain parties to bring before Parliament the question of the Bank of England's resuming Cash payments, and to make it imperative on that body so to do, I trust, that both you, and the nation at large, will pardon the presumption of an humble individual, in freely offering his sentiments on the subject; naturally conceiving, that the circumstance of his having been bred in the monied world, (to which nearly forty years of his life have been devoted,) may have afforded him an opportunity of forming more correct ideas on so intricate a question, than perhaps the generality of persons who have not had the benefit of such an education ; he is under that impression induced to submit his opinions to the general consideration of the Legislature, before a measure, so replete with danger, if not with positive destruction, to the commerce of the country, be adopted.
I beg to premise that I have no interest beyond that which appertains to other
persons of property, for I stand perfectly isolated, and by no means court the favor of the Bank directors, of which indeed they are quite sensible. I have no connexion with them beyond the ordinary civilities induced by individual friendship or acquaintance, as I have, on most occasions, been more disposed to question the resolutions and proceedings of the Directors than to give them my unqualified approbation. I trust, therefore, I shall stand acquitted of any undue influence on my mind in submitting the following observations to you on a subject of such na
tional importance ;-the public welfare being the only object the only end I have in view.
In taking an impartial review of the relative situation of the Bank of England with the country-as to its resumption of cash payments, it is highly expedient to consider the benefit likely to accrue, with the injury likely to be sustained by the measure, and then carefully to weigh the advantages against the disadvantages -- the conveniences against the inconveniences, and, in the true spirit of commercial calcúlation allow the balance to direct our judgment and confirm our decision.
The most prominent and not less lamentable inconvenience attending the bank restriction is, the frequency of the crime of, and the consequent numerous prosecutions and convictions for, forgery.
The more extended the circulation may be, the wider, it must be admitted, is the field in which frauds may be practised ; yet can any one imagine, that if five or six millions of one pound notes were withdrawn from circulation, and gold substituted for them, that forgery would cease ? Indisputably it would not.
The increase of forgery may, in a great degree, be attributed to the improvement in the art of engraving; in which line there are numbers of artists with improved talents ; the facility of imitatting the Bank note is consequently greater, and, while lying within the
power of numerous individuals, the crime must be more trequent. The Directors of the Bank of England, however, are exerting every nerve to render it more difficult, if not almost impossible to forge their notes, and little doubt is entertained that in a great measure their humane efforts will be crowned with success.
Should the Bank resume cash payments, then will another door be opened to fraud, and coining become more prevalent, as forgery declines.
Great stress has been laid by some on the depreciation of the Bank note, when gold rises above the coining price of 31. 175. 104d. per ounce ; admitting the fact to be so, and that, if a person be desirous of exchanging notes for gold, he is compelled to pay 5 per cent. more for the obtainment of the precious metal—will that be a reason sufficiently strong to induce the nation to risk its present prosperity, merely to be enabled to say that a man may have nine guineas, one half guinea and sixpence, in exchange for a ten pound bank note ?
That high-sounding word Exchange, is then brought forward in aid of the argument. The generality of writers on this subject have fixed their eyes on the Bank of England as the arbiter, and conceive that the paying in gold, or the continuance of a restriction on its issues of coin, regulates the course of exchange; not reflectVOL. XIV, Pam.
NO. XXVII. N
that the Bank is rather an occasional receptacle for a redundancy of gold, than a source or mine whence the metal
The operation of the Bank is to prevent the price of gold sinking below 31. 17s. 101d., as at that price it is ever ready to receive it, by issuing its notes in exchange. If, for instance, ten millions were : to be carried to the Bank, and notes given to that extent ;-when called the Bank would be able to restore the full amount.But if the Bank issue notes on government securities, it will naturally look to government for their redemption; and so with respect to discounts—if the government and the acceptors pay the Bank, that body will, of course, be ready to discharge its ob ligations--but not otherwise.
There can be no question that when gold can be received for paper even handed, or, in other words, when gold can be procured for its representative value on paper,
the exchange will continue with less variation ; but this may be considered a consequence of the regularity of exchange, rather than a cause of it; yet, even when the Bank pay in specie, there will be occasional variations produced by different causes ;-transfers from one country to another-for goods bought or sold—from emigration in any great degree ;-an army paid in another country, or any other circumstance, increasing the quantum of negotiable paper.
Those writers who have exercised their pens on exchange seem none of them to be clear in their ideas, or to have hit on the true cause of its variations; they have merely considered the drawing and re-drawing of one country on another-whether, when the bills become due, they will or will not be paid in specie; and the relative value of that coin in which they are to be discharged. Unquestionably these considerations have their weight and bearings on the subject; still every one who has ventured to predict, has been prophetically wrong.
Ought we not rather to consider national industry, science, and talent, as the grand regulators of exchange ? these combined will ever direct its course; the principal object therefore is to excite productive labor and industry, and whenever the people shall be fully employed, then will the exchange work itself in favor of the nation. The beneficial effects of this employment spring up
imperceptibly, and can only be observed in the results produced ; scarcely ever in their progress or detail.
To excite the national powers becomes then the imperative duty of the state-and how can these powers be set in motion so effectually as by credit and a paper circulation ? the first being only a private assurance between individuals--the second, a public
and transferrable promise to pay. Check the transferrable claim, and the grand impetus is injured, which at present cannot suffer didiminution, without immediately arresting the progress of labor : without payment man will not work; and if he cannot be paid in money, recourse must be had to a transferrable promise ; but it is immaterial to the laborer whether he work for gold or a turnpike ticket, provided that ticket will procure him the necessaries of life. This position has been fully illustrated during the late long and arduous struggle; for although the national debt has abundantly increased, yet has it been accompanied by an extension of national and domestic credit equal to its support, while the resources of the country have been commensurate to its burdens, and every thing has prospered. Houses have been built-roads formed canals cut-bridges erected_and agriculture most wonderfully advanced; nor is there a county that has not had its enclosures, or 'scarcely a science or manufacture that has not been improved; and these all owe their prosperity to what has been called a fictitious circulating medium. Even charity, the offspring of abundant riches, in England has been most profuse-nay, almost unlimited. All these result from national wealth-not the accumulation of gold! În England's most prosperous days twenty-five millions of specie was as much as it could boast of possessing. How long would 'twenty-five millions support its inhabitants ? one, two, or six months.-Can gold then be considered as national wealth? We surely must look to something else!
In taking a comprehensive view of our national circulating medium, it will be requisite to consider its amount in relation with that of the national debt, which it is called on to support, as well as with that of the various agricultural, manufacturing, commercial, and professional transactions, each demanding a given quantity to supply their respective daily wants; for it would be pre. posterous to imagine, that one thousand millions of debt-an improved "agriculture—forishing manufactures-extended .commerce, and professional expenses, can be supported and carried on with the limited means that existed when the debt did not exceed two hundred millions—when the country possessed not a quarter of its present trade, and agriculture was almost in its infancy. Any one who attentively considers the subject will readily perceive that the issues of accommodation from the Bank of England have not kept pace with the increase of debt, a debt which could not be supported by the existing bank notes in circulation, were it not for the co-operation of bankers' credit, country bank paper, arid individual credit between party and party.
To the three yowels I, O, U, are attached more operative excel