The currency question : considered in relation to the Act of the 7th & 8th Victoria, chap. 32, commonly called the Bank Restriction Act / by George Combe.

  • Combe, George, 1788-1858.
Date:
1856
Catalogue details

Licence: Public Domain Mark

Credit: The currency question : considered in relation to the Act of the 7th & 8th Victoria, chap. 32, commonly called the Bank Restriction Act / by George Combe. Source: Wellcome Collection.

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    incomes became from 20 to 30 per cent, more valuable than in the days of the mania—that is to say, they received a higher rate of interest, and the money they drew served to purchase more goods in the shops. Prudent retail-traders also did not suffer; for al- though they were forced to sell their stocks at lower prices, they were able to replace them at rates correspondingly low, and they had the benefit of a rise when commercial prosperity returned. The fall of prices, also, brought foreign purchasers largely into our markets, and we being no longer able to buy equally from them, they ran into debt to us. What would the Edinburgh Chamber of Commerce have thought, had their brethren in the Chambers of Commerce of New York and Paris, who had bought goods in England which they could not readily sell at home, and could not easily pay for, petitioned their legislatures to prevent their hankers from paying gold to be remitted to England in extinction of their debts ? Does the Chamber think it unjust to them that, in their turn, they wTere forced to send us back gold ? It is from not looking at both sides of the case that confusion and false judgment arises. Every sound thinker will say that the foreigners acted honestly and honourably in sending us gold in payment of their balances. This gold was purchased by the Bank of England, and paid for in their notes. These, being needed for a now reviving domestic trade, were absorbed into the circulation of the country ; prices gradually rose, and commercial prosperity returned. Our non-commercial readers will perhaps understand the “ cur- rency question ” better when we add a very simple illustration. The English sovereign contains a quantity of gold equal in value to that contained in a French Napoleon and a quarter, or 25 francs. When the Bank of England note is payable in gold on demand, the bankers and money-changers of France give 25 francs for every pound of the English note, and also for every pound of the circular notes of the London bankers, used by travellers in paying their expenses abroad. But when the English bank note is not payable in gold, the traveller receives only 20, or 22, or 23 francs for bis English pound, according to the extent of the demand for English notes in France with which to pay debts due by Frenchmen in England. As these notes will not serve the Frenchmen as means of paying their own debts in Germany or America, they will give less and less of their own currency for them, in proportion to their own diminishing need of them as means of buying in England. While, on the other hand, the English bank note is payable in gold, this depreciation of it in France cannot take place; because the English merchants, instead of sending bank notes beyond the amount which the Frenchmen need for paying their debts in England, would draw gold from the Bank of England, and send it to France in liquidation of their debts; and as English gold is received at its full value all over the world, the Frenchmen would take it at its full value, rather than receive bank notes which they could use only in England, and which were altogether useless to them when they did not desire to purchase English goods. By no c