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&c. &c,
OBSERVING many erróneous or very questionable notions to be
prevalent in respect of the important topic of a paper currency;
or for my own part entertaining opinions which are not precisely
conformable to predominant ideas on that subject; I purpose to
submit my sentiments to the public as briefly and clearly as I am
able to express them. I shall offer no further preface nor apology;
premising only that I am no inexperienced theorist ; nor yet an
interested practical man; though not altogether unused to the
study and application of political economy.

The actual depreciation of bank notes and paper currency
not, as I apprehend, occasioned by an excessive issue of notes of
the Bank of England, or of other banks, nor even exchequer bills,
much as these have been overdone, but by the subsisting corn
laws: and the value of paper money must and will continue to
fluctuate, and very widely so, until one of two measures shall
be adopted : resumption of cash payments, or amendment of the
corn laws. It is to be apprehended even, that the first of, those
measures may not be entirely effectual to restore the steadiness of
a metallic standard of value, without the other.
While cash payments are suspended, and a paper currency

which is not convertible into gold or silver ; corn, and
not gold nor silver, is the real measure of value. There is no


The present

other present standard of estimation in Great Britain. The bank. note, together with the exchequer bill, and every other sort of

paper currency, now in circulation, is not to be converted into bullion, nor exchanged for a determinate quantity of gold or silver, unless at an uncertain and indefinitely distant time. exigible payment is a set-off or credit in discharge of some debt to the bank or to the government; and the paper currency is presently exchangeable at market for marketable and variable prices of bullion, or of other commodities. The value of merchandise to be had in exchange is not determined by that of gold and silver. These are no longer requisite and indispensable subjects of British commerce. Corn alone is now the one indispensable article of traffic in Great Britain.

There is, no doubt, a subsisting demand for bullion among other materials of manufacture : that is, for plate and for plated ware, for use and for decoration. But this is a mere secondary object 'in the commerce and dealings of the empire.

There exists moreover a carrying trade of bullion. The British commerce, in course of its multifarious dealings, has to seek bullion in one place, where it can be best spared, to convey it thence to some other quarter where it is more needed : or to transfer it in payment of foreign debt; received in discharge of one, delivered in liquidation of another. A portion of the carried bullion rests during its transit, constituting a stock in hand.. Important as this traffic undoubtedly is, it yet can be but secondary, when compared with the unceasing occasion for bullion in any country where this is the chief medium of circulation.

Wherever gold and silver occupy that prominent place in the local currency, they must be a main article of traffic. All internal commerce there bears direct reference to specie. External commerce is intimately concerned with it. If there be a deficiency of bullion coined or uncoined, it must be sought for and fetched from places where it may be procurable. If there be a redundancy, it must be carried away to places that have greater need of it. Command of it enables the nation or the individual to purchase what is wanted or desired; the fruit or the performance of labor. Need of it induces the nation or the individual to part with something possessed, labor or fruit of labor, whereby it Inay

be obtained. But in countries where gold or silver is not a part of the circulating medium, each is wanted only for its uses among materials of manufacture, as a metal wrought or to be wrought ; or for the Larrying trade of bullion.

In Great Britain, while bullion, furnishes no part of the curren

cy unless for small change, the occasion for it is almost confined to its purposes as merchandise, and is neither general nor incessant. The principal and important article of traffic, for which there is unceasing occasion, is corn. It is the chief object of husbandry; and (if I may be allowed to use the term in a comprehensive sense for the sake of avoiding circumlocution, employing the single word to signify the vegetable nutriment of man, whether cereal grains or farinaceous roots ;) it is the chief means of sustenance of the people. Any thing else may be dispensed with and foregone. Corn alone is always inevitably requisite : and therefore it is the natural standard by which the value of every other thing, unless among pastoral and hunting tribes, is regulated, when there is no other conventional standard possessing intrinsic value.

It must be indeed admitted, that in long periods the chief article of human nourishment, or in a word, corn, is a measure of the value of other things, not excepting gold and silver: and that bullion is not for a large period a standard of the value of corn. But corn does measure, if not with precision, yet with greater approach to exactness than any other single matter, the worth of labor ; and this measures the cost of production and value of commodities produced. It is a true criterion of value, apart from the consideration of rarity and predilection.

A bank note, or other piece of currency, not being convertible into gold or silver, but merely conveying and assigning a credit in account or right of presenting it in discharge of debt, is not referrible for a measure of its value to the species or denomination borne on the face of it; but to the goods, merchandise or commodities, which it can purchase in market ; and chiefly corn, which is merchandise universally in request. The currency, which has been described, does not measure the value of commodities, though it serve for a medium of comparison between goods of various sorts. The value of commodities in market measures that of the

currency A bank note at any given time is worth just so much corn or merchandise as it will then purchase.

Its worth would be as variable, as the fluctuations of market, were this entirely unrestricted. No guide of estimation could, in such case, be indicated, besides experience of the past, and probable conjecture of the future, market prices. But laws, regulating importation of corn, do furnish some points of a scale for estimation of a currency, relatively to which its importation is regulated. Under subsisting rules, which sanction the vend of imported corn, when the price of wheat is eighty shillings per quarter ; barley forty shillings; rye, &c. fifty-three shillings; and oats twenty

seven shillings, a bank note of one pound sterling is, in ordinary circumstances, or at a mean, worth two bushels of wheat; four of barley; nearly six of oats ; and about three of rye, &c.

If the home growth of corn, or those sorts in particular, which are chiefly consumed, be just sufficient, or very nearly so, the value of a bank note in exchange for corn may be expected to conform pretty exactly to that standard. In such circumstances the value of bullion will be regulated by the carrying trade of it; disregarding, a's comparatively insignificant, the demand for gold and silver among materials of manufacture, or as metals wrought or to be wrought.

But if the home growth be insufficient, the price must rise above the standard fixed by the corn laws, to legalise supply by importation. A bank note of a pound sterling no longer represents two bushels of wheat, and four of barley ; or six of oats, and three of rye : but a certain other proportion of each of them. It represents perhaps one and a half, or one and three quarters of the bushel of wheat, or such other ratio as the enhanced price manifests.

The value of the bank note is now altered with reference to gold and silver, although no change should, in other respects, have taken place in the commerce of bullion. For a change must be produced in that trade and in its general market, although no other circumstance should occur to produce it, besides unusual importation of corn.

Since that importation takes place in no ordinary but extraordinary state of commercial relations, it must be met by an uncommon export of merchandise, bullion or other commodities. The goods must be sold unusually cheap to induce an unusual demand for them. An uncommon impulse is given to the trade of bullion. It must be sought and procured with the offer of goods at reduced prices. Hence the anomaly of increased demand tending to diminution of price of all exportable goods. Bullion is in request at advanced rates. A vent for other commodities is open at lowered prices. The bank note then purchases less gold and less corn than before; but as much or more of other goods, than it previously did. Every thing is depreciated except bullion and


This course does necessarily take effect, not only when all sorts of agricultural produce are scarce by reason of scanty harvests; but also when any one species of corn is deficient which can be deemed indispensable. Though wheat be abundant, yet if barley or oats be deficient, then the value of the paper currency is determined by that deficient sort. The bank note of one pound sterling, which continues to represent two bushels of wheat, How

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represents less than four of barley, or than six of oats. It is equivalent to some other proportion; perhaps three and a half, or three and three quarters of the bushel of barley; possibly five, or five and a half of oats. The paper currency then is depreciated in respect of an imported species of corn; and in respect of bullion also : while it continues to maintain its value relatively to other and unimported corn: and this therefore, with every other species of agricultural production, is consequently depreciated equally and at the same time with the paper currency and exported commodities.

If the home growth of every sort of corn be in any season more than adequate to the national wants, then indeed the bank note will represent a larger quantity of corn. The surplus of produce „now causes a glut in the domestic market. It is not likely to find a vent into foreign countries ; where corn is habitually cheaper than in Great Britain. The surplus must be stored here for future use; and mean time it overstocks the granaries, and lowers the price of grain below the standard of the corn laws; and very much

if the excess of the supply above the demand be great.

In this case the bank note of one pound sterling no longer represents two bushels of wheat, and four of barley; or six of oats and three of


&c.: but some other ratio, perhaps three bushels of wheat ; possibly five of barley; mayhap seven of oats, or four of rye, &c. The value of the bank note is a mean of the several proportions, at which the various sorts of grain find purchasers at market.

The carrying trade of bullion, now experiencing no unusual impulse, is pushed with no extraordinary briskness. Gold and silver are moderately in demand for their uses as metals. There is not any circumstance operating, that should enhance the price of bullion. It is therefore reduced to the rate, which the demand for it throughout the commercial world may just then assign to it, and of which it finds the level by means of the carrying trade.

The value of the paper currency relatively to corn has now been increased : and the bank note can purchase a greater proportion of bullion than it previously did. The price then of all sorts of commodities, as reckoned in the paper currency, must decline ; but without inducing an increased demand for them. Since the foreign trade is diminished, and the means of the agriculturist unaugmented.

In either case, then, of the price of corn exceeding or falling short of the standard assigned to it by the corn laws, a reduction of the price of merchandise adapted to foreign trade, is the result; attended however with diminution of the demand for such merchan..

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