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By the same last mentioned return, the value of the bullion in the vaults and coffers of the bank, on the same 6th January of 1844, was 141 millions (£14,638,000).

The power of the circulating medium is the result of the co-operation of two forces — the quantity multiplied by the velocity of its circulation.

If to circulate all other commodities in the United Kingdom a power of currency be requisite, amounting in quantity to 72 millions, circulating with the velocity which it has acquiredthat quantity of circulating medium, composed of a mixture of coin and paper-money, must always be out in circulation, performing its office of circulating all other commodities.

If the velocity of circulation be increased, the quantity of circulating medium will become diminished; if the velocity be retarded or impeded, the quantity must be increased.

What quantity of the 144 millions (£14,638,000) of bullion stated by the return of the bank to be in its vaults and coffers, on 6th January last-was composed of coin, and what quantity of bullion, does not appear—but suppose, for the purpose of the following argument, that the quantity of it which was coin was 4 millions, and the quantity of it which was bullion was 10 millions.

Suppose, in such a state of things, that the Exchanges become what is called against the United Kingdom—and that an efflux of gold to foreign countries, whose demand for gold has caused such a state of Foreign-exchanges, takes place.

Suppose the 10 millions of bullion withdrawn from the bank and exported to meet such demand. The bank, when it parted with those 10 millions of bullion, received for it 10 millions of its promissory notes, which were out in circulation

If the bank were to retain those 10 millions of notes and not re-issue them—there would arise a deficiency of 10 of the 72 millions of circulating medium required in the United Kingdom (on the data assumed) to be out for the circulation of all other commodities within it.

If the bank were to re-issue those 10 millions of notes, which had been brought in for the 10 millions of bullion-no change would be effected in the state of the circulating medium by that re-issue- from what it was before the efflux of the bullion.

The bank, by the exportation of the bullion, would be relieved of the loss of keeping, as bullionmerchants, 10 millions of bullion idle and unproductive in its vaults and coffers—but the coin and paper-money out in circulation in the United Kingdom-after the bank had re-issued the 10 millions of its notes brought in for the bullionwould remain exactly in statu quo—just as if the 10 millions of bullion had never been either imported into, or exported from the United Kingdom.

Those facts are manifest and incontrovertibleand yet, by a most singular perversion of facts and of reason,-it is laid down, by the theorists who support the Bill as an unquestionable and admitted principle, that the moment foreign-exchanges become what is called against* the United Kingdom-all the banks and bankers in the realm should begin to contract their issues of papermoney.

If, in the case supposed, the Bank of England were only to retain, and not to re-issue the 10 millions of its notes, brought in for the 10 millions of bullion exported,there would be a deficiency of 10 of the 72 millions of circulating medium assumed to be necessary to be out in circulation, and yet the theorists in question assume and assert (if their argument be intelligible), that the Bank of England ought not only to retain and not re-issue the notes brought in for bullion exported,—but that every bank and banker in the kingdom-the moment that Foreign-exchanges indicate a demand for gold in any foreign country,—ought instanter to set about contracting their issues of papermoney.

The Prime-minister, in a speech in support of the bill, is reported to have said in the House of Commons,—“In November 1823, the bullion in

* There is an association of ideas with the word against, which misleads superficial thinkers on Exchange.--Against, in the doctrine of Exchange, is a mere technical term,-importing in reality nothing other or more, than that gold is dearer in some foreign country or countries than in the United Kingdom. In the case of any other commodity than gold,of which other commodity there were a large surplus stock in the United Kingdom,—to learn that such commodity is dearer in foreign countries (and where, therefore, there is a market for it) than in the United Kingdom, would be considered (as it would be in fact), not against, but in favour of the United Kingdom.

" the possession of the Bank was 137 millions “ (£13,760,000), in November 1825 it was re“ duced to 3 millions (£3,012,000). If the prin“ciple of a metallic standard, and the doctrine as “to the variation of paper with the state of the exchanges be admitted, there ought to have “ been a considerable decrease in the amount of “ paper.- But it is estimated, that between No“vember 1823 and November 1825, there was an “ increase in the amount of country bank paper of “ from 4 millions to 8 millions."

Now admitting the estimate as to the issue of country bank paper to be according to factwhat were the facts, which are unquestionable—of record—and not resting upon estimate-as to the conduct of the Bank of England, with respect to its issues of paper-money in the interval from November 1823, when the bullion in its vaults and coffers was 13 millions, till November 1825, when such bullion was reduced to 3 millions—the efflux of bullion in that period being, therefore, 108 millions ? The notes of the Bank out, on the average of the year ending with

31st December 1823, were. • 184 millions (£18,629,525*) On the average of the year ending

with 31st Dec. 1824, were 20 millions (£20,135,342*) On the average of the year ending

with 31st Dec. 1825, were 20 millions (£20,111,860*)

* Appendix, No. 82, to the report of the Committee of secrecy on the Bank of England Charter, ordered by the House of Commons to be printed, 11th August, 1832.

Thus, it appears that although 104 millions of its notes must have been brought and returned into the bank-for the 101 millions of bullion drawn out of it between November 1823 and November 1825—that the bank not only re-issued all those 100 millions of notes, but increased in the years 1824 and 1825, by a million and a half, the issue of its notes, ultrå the amount out in 1823.

In the argument of the Prime-minister in support of the Bill,—the country banks (to not one of which, probably, was a single bank-note ever returned for bullion to be exported, for no country banker keeps bullion any more than he keeps tin or iron) are upbraided with having not contracted but expanded their issues of paper-money-while the drain of the 104 millions of bullion was going on from the Bank of England—but in that argument the fact is suppressed that the Bank of England itself—to which 103 millions of its notes were brought back or returned for the bullion exported—not only re-issued all those 104 millions of notes, as fast as they came in, but expanded its issues of paper-money during that drain, to the extent of a million and a half-ultra the amount of its issues before the drain began.

The Prime-minister, in his speeches in support of the Bill, cites other instances of drains of bullion from the Bank of England-on each of which occasions he upbraids the country banks (which profess that they do not regulate the issue of their paper-money by the state of foreign exchanges-and that they have no control over the state of such exchanges) with having, during the

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