f
PREFACE.
It is not intended in the following pages to discuss the question
as to whether the distress which exists at present amongst many of
dhe Producing Classes of the British community, arises from the
recent changes in the Corn and Navigation Laws. The question
attempted to he awswered is, whether our present Monetary System
is compatible with free imports, and internal indirect Taxation ?
And, whether it is not necessary to adjust our standard measure of
value, commonly called the "standard of value," to the altered
circumstances of the country ?
Independently of Free Trade, the increased production of Gold
from its discovery in California—the advices from America that the
coinage of Gold at the Mint of the United States is in excess of the'
demand for coin—and the large quantities of BuUron almost daily
arriving in this country and France—combined with the abstraction
of Silver Bullion and coin from this country—will speedily necessi¬
tate an adjustment of our Gold measure, or " Gold standard," as it is
called, to the altered value of Gold in relation to Silver, and all
other commodities.
The Author agrees in opinion with the late Lord Ashburton,
that it is the most foolish argument imaginable to assert that because
England is the richest country in the world, therefore she ought to
have " the richest metal for a standard." " Truly," says his Lord¬
ship, " common sense should lead an accurate observer to the very
opposite conclusion. The wealth of a Nation like ours does not
consist in the precious metals.''^ If however the paper money, or
credit currency, necessary for the circulation of our wealth, is only
to be in proportion to the precious metals we possess, then the en¬
largement of the metallic base, as population, trade, and commerce
increase, is absolutely essential ; and it cannot be doubted that such
enlargement would be secured " by conforming to the practice of all
our neighbours, in taking the double—and if not the dor.bie—the
Silver standard."
.11-
Indeed a wide question here presents itself to our notice, which
raight lead us to enquire whether Silver and Gold could not be dis¬
pensed with as money, and dealt with simply as commodities ; and
whether our money should not be purely symbolical, and representa,
tive of taxation alone ? As an instrument of taxation, and a medium
of exchange for internal trade, the Author believes such symbolical
money would be found not only in accordance with the scientific
principles of money, but in practice, to be thoroughly eificient and
secure.
The true money-pound of England, in contradistinction to the
troy pound, is the 20s. of Elizabeth, coined at the rate of 5s. 2d. the
ounce of standard or sterling Silver. In such Silver coins. Gold
coins formerly found their price, according to the market value of
Gold at the time. This is the " ancient monetary policy" of England.
The making Gold coins or sovereigns, at a fixed price, the " stand¬
ard" in lieu of Silver, or the only " legal tender" of the country, is a
/ffaqjious innovation at variance with " the ancient monetary policy
of England," and is a complete departure from the standard of
Elizabeth.
The Monetary Reform the Author wishes to see accomplished
is the restoration of the Elizabethan standard, but adjusted with re¬
ference to the Indirect Taxation of Customs and Excise, which has
grown up during the last 200 years. On this principle, the ounce
of standard Silver ought now to be coined into say 6s. 8d., instead
of 5s. 2d. ; and the fixed price of Gold should be abrogated.
The Author cannot dismiss the subject without acknowledging
that if the views he advocates are found to possess any interest or
value, he is considerably indebted to John Crawford, Esq., of
Paisley, the Author of the "Philosophy of Wealth," whose
communications have been of much service to him in preparing
these pages for the Press.
Lockers, Hemel Hempsted,
2\st. June, 1851.
SUGGESTIONS
FOR
MONETARY BEEORM,
WITH
OBSERVATIONS
ON THE
INFLUENCE OF CORN LAWS>
AND
INDIRECT TAXATION,
ON THE
CURRENCY.
When Adam Smith maintained the justice and expedi¬
ency of Free Trade as an absolute proposition, he warned
his disciples in the most earnest and strenuous terms
against its adoption ivithout reference to the particular
circumstances of each respective country, and laid it down
as an incontrovertible proposition that between countries
dissimilarly situated as regards their peculiar industrial and
financial or fiscal arrangements, Free Trade could not be
carried out.
6
The subject of international exchanges does not even now
appear to be thoroughly understood as a theory ; and some
great imperfection in practice seems to be admitted ; for the
Author of these Suggestions has seen it announced that
his Eoyal Highness Prince Albert intends to convoke a
meeting or congress of merchants, bankers, legislators, and
juris-consults, iu the present month of Jnne, during the
Exhibition, to discuss the principles of exchange, with a
view to the adoption of improved systems of money and
cnrrency, at least in England, and it is presumed in other
countries also. The Author has heard of this announce¬
ment with great pleasure, and sees in it a proof of the
wisdom and enlightenment of his Eoyal Highness, and that
he is desirous that all Trade shall be conducted only on
the principles of equity and national justice.
All trade is barter, or the exchange of commodities of
equal value, the one for the other. But barter is either
direct or indirect—direct when commodity is exchanged
for commodity—and indirect when a medium or common
measure, either of real value itself, such as silver or gold
coins, or of merely symbolic value, such as bank notes or
paper or credit currency, is employed—and in which the
reciprocal value of the commodities exchanged is indicated
or expressed ; but in retail transactions, the great mass of
these exchanges is carried on by the use of metallic money,
either in gold or silver coinage.
It will hence be seen what an important influence the
instrument or medium of exehange has on commercial deal¬
ings ; it is the beam on which the scales of commerce are
suspended : whieh, if net justly constructed, exchange can¬
not be fairly effected ; for, although it may hold the scales
in equilibrio, there will always be a greater value in one
scale than in the other.
7
Now the Author respectfully submits that this is and
has been the effect «tn all the industrious and productive
classes in this country, both in reference to the non¬
productive classes, and to our foreign interchanges, caused
by the system, of money, currency, and banking, in use,
as established by the Acts of 1816, 1819,1844, and 1845 ;
of which legislative measures that eminent politician, the
late Sir Robert Peel, was the well-known author. Of one
great principle in monetary science it is clear Sir Robert
Peel was wholly unconscious, whilst bringing forward these
different monetary measures. It is no disparagement to his
memory to say this, because the principle alluded to has
been equally overlooked or concealed by almost all the lead¬
ing politico-economical writers or authors on the subject
of money or currency, viz.. Smith, Mc'Culloch, Lords
Liverpool and Lauderdale, Ricardo, Jones Loyd, Senior,
Mill, and others who might bg. named, and éspecially by
those acknowledged practical authorities, the late Lord
Ashburton, and Mr Haggard of the Bullion Office. The
principle to which the Author refers is this :*—Gold and ,
silver are foreign commodities : their intrinsic value depends
on the labor employed in their production, just as is the
ease with any other commodity—^given quantities will ex¬
change for other commodities of equal value, or which have
cost the same degree of labor ;—but if the production of
commodities in England be taxed by custom or excise duties,
while gold and silver remain untaxed, such taxed commo¬
dities cannot fairly be exchanged for the same quantities
•This principle has been previously enforced in the writings of the Rev.
Mr. Cruttwell, and also by Mr. John Taylor, the learned author of
" Currency Investigated," who is entitled to the gratitude of his country¬
men as one of the most able expositors of the history, nature, and func¬
tions of money, of the present day-
8
of gold and silver as before ; in other words the untaxed gold
and silver cannot justly measure the «iataxed commodities.
To be just measures of taxed commodities the gold and
silver must be appreciated in the ratio of taxation. For
instance, suppose the indirect taxation of custom and excise,
&c., in the United Kingdom, to be an average of 33 per cent.,
then gold and silver as moneys or measures of value should
bear a seignorage, or should have a money denomination
conferred on them to a like amount, beyond their real or
intrinsic value.
Of this principle Adam Smith, when he wrote (nearly
100 years ago) was necessarily ignorant, because since then
two-thirds or three-fourths of the amount of our national
debt, and of the indirect taxation annually required to pay
the interest thereof, has been created, and the pernicious
effect of the operation of gold and silver at their natural or
untaxed value was scarcely perceptible at the time, as re¬
garded the influence of taxation, because the silver coinage
was considerably worn, and consequently depreciated to a
corresponding extent, and was a legal tender to any amount
by tale.
The ancient standard ounce of Elizabeth was silver of 1^
dwt. of alloy to 18^ dwts. of pure silver, coined into moneys
at the rate of 5s. 2d. the ounce. As the legal standard or
sterling measure of value in England, this has existed for
nearly two centuries and a half ; but in the reign of Elizabeth
it is to be remembered there were no indirect taxes of customs
or excise, no taxes ou the prodwcftwe iraferesfe in England, and a
standard measure of value of silver coins of 18| dwts. of pure
silver, and 1^ dwt. of alloy, at the rate of 5s. 2d. the ounce
may have been a just measure at that time, according to
which producers might sell or exchange their untaxed
commodities at their natural values, and exchanges could
9
be made with foreigners on ec[ual terms ;—but it does not
follow that we should adhere to the standard of Elizabeth
as respects the weight and denomination of our coins,
though we mag as respects the standard purity of our bullion^
under circumstances so totally changed, any more than
it was expedient in her day to go back to or adopt the mo¬
ney standard of William the Conqueror, when, as we all
know, the unit of account or pound sterling was the pound
troy of silver, which has been gradually diminished from
time to time in the history of our country, as circumstances
justified or required the alteration, in order to make the
silver coins just measures of other commodities ; so that
instead of being coined into twenty shillings, as it was then,
it is now coined into sixty-six, and accordingly is just less
than one-third the value it originally was.
Many persons are alarmed at the proposal to reform
the currency, or alter or adjust what is called " the standard
of value" to the altered circumstances of the country ;
but it is humbly maintained that such alteration or
adjustment is a paramount duty of Government. On this
point the Author would beg leave to quote the opinion ot
two writers whose knowledge as practical men renders
them unquestionable authorities on such a subject. The
first is Mr Lowndes, who was directed by the Government
in 1695 to investigate the whole system of British coinage
from the foundation of the monarchy ; and he says in his
report, containing ' An Essay for the Amendment of the
Silver Coins,'—
" By the careful observing of which deduction here made from
the indentures of the mint, for above four hundred years past (ma¬
ny of which are extant, and have been seen and examined by me),
it doth evidently appear that it has been a policy constantly prac¬
tised in the mint of England (the like indeed having been done in
all foreign mints belonging to other Governments) to raise the
10
value of the coin in its extrinsic denomination, from time to time, as
any occasion or emergency required; and the method of raising the
extrinsic value of the gold and silver in the denomination of the
coins, as it has been constant almost in the reign of every king, so
no inconvenience, disgrace or mischief (sß can be observed) has ever
occurred hy the doing thereof at any time, when a just, necessary,
or reasonable cause gave occasion thereto"
The second quotation is from a modern author, who
writes with reference to the present time, namely, Mr.
Haggard, of the Bullion Office, who says
" I have for some years past been anxiously looking forward
to the time when the currency question might occupy the atten¬
tion of this great Nation, and when the evil of our present system
should be so evident that few would be found to raise objections
to a fair enquiry on the subject. Many persons conscientiously
believe that there may be danger in changing our metallic cur¬
rency, or, as the term goes, ' tampering with it' ; but it may be
asked, what foundation have they for this fear ? Do they think
that their property would be risked by the change, or does it
arise from a want of knowledge on a subject so -abstruse as that
of our circulating medium ? If the former, how deceived they
are, for the present system puts in jeopardy the whole wealth of
the Nation, by its secret working."
In addition to these authorities may be mentioned also,
Mr. Harris (quoted by Mr. Haggard), who is equally
weighty and unexceptionable as an authority, as he was
employed in the royal mint. He says
" Rates (prices) of gold coin are not to be affixed arbitarily, but
are to be regulated by the price which gold then bears to silver
as a standard. These rates are and always have been considered
as subject to this rule, and also to be altered again and again when¬
ever the case may so require."
It is fully established then by the authorities now quoted,
that it is expedient and proper, and indeed the duty of
11
Government to adjust our moneys, or alter the standard from
time to time, as circumstances may arise to render such ad¬
justment necessary. It is to be remarked, however, that
simply because indirect taxes existed but to a limited ex¬
tent when they wrote, neither Lowndes nor Harris, any j
more than Adam Smith, takes notice of the principle of ap¬
preciating our moneys in the ratio of such taxation, in
order to make them just measures of taxed commodities.
This omission on the part of these writers is accordingly
excuseable, whilst it is not so on the part of Ashburton or
Haggard, or other writers of the present day.
Before adducing his plan with reference to this pi'inciple,
the Author would advert to the following chronological facts
in the history of English Money and Currency.—
In 1717 our national silver standard was interfered witli
for the first time, and gold coins, called guineas, at a
ßxed rate or price of 21s., were declared legal tender, equally
with our silver coins.
In 1774 silver coins were abolished as a legal tender for all
sums above £ 25, but as bullion at the rate of 5s. 2d. the
ounce, such coins were still a legal payment.
In 1797 the Bank of England suspended cash payments,
and inconvertible bank notes for £ 1 and £ 2 were issued.
In 1816 silver was re-coined at the rate of 66s. in the
pound troy, but restricted as legal tender to 40s. at a time ;
and payment of silver as bullion^ at 5s. 2d. the ounce, was
alolished.
In 1817 guineas were withdrawn, and sovereigns, of the
weight of 5 dwts. 3 grs. each, with a fixed price of 20s., were
coined, and put into circulation in their stead.
In 1819 an Act was passed for compelling the bank to
resume cash payments at the rate of £ 4 1 0 the ounce of
gold, from the 1st of Feb. to the 1st. of Oct. 1820; and of
12
£ 3 19 6 from the 1st. of Oct., 1820, till the 1st. of May,
1821, and from and after that date at the fixed or uniform
rate of £ 3 17 10^, as in 1717.
In 1826 an Act was passed allowing the formation of
Joint Stock Banks, and the circulation of notes under £ 5
was prohibited after 1829.
In 1833 Bank of England notes were made a legal tender,
except at the Bank of England itself, or in case the Bank
ceased to pay its notes in bullion on demand, which
condition annulled the privilege that previously existed
of such bank notes being a legal tender.
In 1844 the Complement Act was passed, to render more
effectual the bill of 1819; and all bankers issuing notes were
restricted in the amount of their issues.
In 1845 new banks of issue were totally prohibited.
From this enumeration it will be seen how our ancient
national " silver standard" has been superseded and a gold
standard substituted in its stead; and also how a Monopoly
in banking, or in the business of supplying the instruments
whereby the people are to be employed, and trade carried
on, has been created in our country, at the very time when
the principle of Monopoly was reprobated both by the
Legislature and the people.
During the war, or from 1797 till 1819, cash payments
were suspended, or in other words the Bank of England was
relieved of its obligation to redeem its notes in gold or sil¬
ver, and accordingly during a period of 22 years, the evil
efiects of a gold standard, or fixed price of gold, were not
felt ; on the contrary all interests in the country flourished ;
taxes were augmented because they were easily paid, as
employers of labor or producers recovered these taxes from
the purchasers or consumers of their goods, by means of in¬
creased prices, commensurate with the increased taxes,
and consequently increased wages of labor. Our foreign
13
trade too was highly remunerative ; the balance of our ex¬
ports and imports, when computed in real value, or with
reference to ofiBcial values, being greatly in our favor ;
whereas, ever since 1819, when cash payments were restored,
the balance against this country has gone on gradually in¬
creasing, till it reached, in 1843, as appears from the tables
compiled by Mr SheriflF Allison, and appended to his work
(" England in 1815 and 1845,or a Sufficientand a Contracted
Currency compared") not less than the sum of £ 65,600,829
sterling per annum; and for the whole period the losses sus¬
tained by this country, even making allowance for increased
production by machinery,and consequent abundance and
cheapness, cannot be estimated at less than the enormous sum
of ONE THOUSAND MILLIONS STEELING !
The great evil then of our present currency is the gold
standard, or fixed price of gold, established by the acts of
1816 and 1819. Mr. Harris, from whom we have pre¬
viously quoted, has stated his opinion on the subject of gold
coin, as follows—
" It is very convenient that gold coins should pass as, or instead
of, money, but not as being money themselves, or the standard
measure of the value of aU other things. It is by the rates (prices)
only with which gold bears respect to silver as a standard at the
time of payment, that contracts are discharged, and not according
to the rates which these coins might have at the time when the
contracts were made. In this view only gold coins are to be
considered ; and in this view they are on a footing with any other
commodity, though less liable to a sudden and great change in
their value than most other things."
Professor Playfair also condemns the departure from the
silver standard. He says
" What followed this bold measure " (the Bank Restriction Act)
" is too famiHar to require detail ; a small remark is aU that need
be added ;—had the ancient standard not been altered in 1774,
14
and had the Bank been liable only to be called on for payment in
silver, or if, with Mr. Locke,* no mint price was affixed to gold, so
that the bank might have rated (priced or appreciated) guineas
in exchange for its notes at the current price of bullion, the same
as they would be willing to take them in payment, no need would
ever have taken place, because the inducement would not have
existed, and consequently no restriction would have been necessary.
These various eminent authorities, Locke, Harris, Play-
fair, and Haggard, establish beyond all question the evil
of a fixed pries of gold, or gold standard, as it is termed,
and the folly and injustice of abandoning the ancient silver
standard of England, even irrespective of the disturbing ele¬
ment of taxation. The evil of the fixed price of gold, or
the gold standard, lies in this—that British producers, in
selling their taxed goods for gold at its natural or untaxed
value, are just, in other words, purchasing gold dear, or be¬
yond its natural value, in proportion to the taxation
they pay ; whilst in paying away the gold they have thus
bought, either in discharge of taxes, interest of money, or
other fixed payments, or to foreigners, they cannot obtain
credit for it to a greater amount than its natural value or
fixed price. The effect is a complete violation of the prin
ciple of buying cheap and selling dear, for they are forced
to buy gold dear and to sell it cheap ; and aU the advantage
of this one-sided mode of dealing is to the monied classes of
England, and to foreign nations. This point is lucidly
stated by Mr. John Taylor (the learned author of the
' Essay on Money,' &c., &c.) in these words—
"K you add a third element to the value of commodities,
whereas previously you included only two elements in the cost
(raw material and labor) ; if you add taxation as a third element,
it is not right to expect that such commodities should not increase
in price. They require a higher price to represent them, when
taxes are added to raw material and labor, than when raw ma¬
terial and labor are alone to be considered."
*Mr. Locke said, " It is necessary your gold should be coined and
have the King's stamp put on it, to secure men in receiving it that there
is so much gold in each piece ; but it is not necessary that it should have
n fiired liable tnricel mit on it bv Dublic authoritv." Mr. Locke was
15
To rectify, then, this great evil of a gold standard, or
fixed rate or price of gold, and to admit of taxation being
added to price, the following propositions are respect¬
fully submitted for consideration.
1st. On the assumption that by the influence of customs
and excise, and other taxes, the cost of producing commo¬
dities in this country is raised 33^ per cent, beyond their
natural value, the ounce of silver of standard purity should
be coined into 7s., or say 6s. 8d., instead of 5s. 2d., the mo¬
ney standard of Elizabeth, in whose reign indirect taxes on
industry in England were altogether unknown.
2nd. That the Acts of 1816 and 1819 should be repealed,
and the fixed price of gold altogether abolished ; and the
gold sovereign, or any other gold coin which may be in¬
troduced, be allowed to rise or fall in price in the silver coin¬
age^ according to the actual relation of silver to gold in the
marhets of the world* Thus 3 ounces of silver coined into
6s. 8d., or each ounce bearing that money denomination,
and twenty such shillings constituting the pound sterling,
the gold sovereign would rise or fall in price in the silver
coinage, as the relation of gold to silver, either through
Californian productiveness, or otherwise, altered, or as gold
commanded more or less silver in exchange. According to
the present value of gold, the sovereign would rise in price
or be appreciated in the proposed silver coinage to £ 1 6 8,
instead of the £ 1 of the present silver coins ; and the
prices of other commodities would necessarily approximate
to such appreciation, because no legislation or system of
coinage whatever can alter or affect values, or equivalent
commodities, though it may and ought to regulate prices or
money denominations. Thus a quarter of wheat and 33s.
of our present silver coinage, and 8^ dwts. of gold, are
equivalents. In the proposed coinage the ratio would be
♦Appendix—Note A.
16
1 quarter of wheat, equal to 44s., equal to 8^ dwts. of gold,
equal to 44s. ; and the ounce of gold would be £ 5 6 8, or
thereby, in -price^ instead of £ 3 17 10 ; but the relative
values or quantities of each commodity would remain un¬
altered the same as before. Indeed the whole question at
issue is a question of price alone, and not of real value.*
3rd. With respect to the credit or paper currency of the
country, it is submitted that National Notes should be issued
by Government; but in no case, it is conceived, need the
notes exceed £ 26,000,000, or the half-yearly amount of the
taxes raised in the country ; that they should be receivable
back in payment of taxes, which would prevent the pos¬
sibility of any depreciation; and they should be issued
in various convenient amounts or denominations, from £ 1
upwards.
4th. That these notes should be the " money of the
realm," or " legal tender money of the country " ; and pay¬
ments in the silver coinage should be limited to a certain
extent; the reason for such limitation being the liability of
silver coinage to abrasion, and consequent depreciation
thereby.
5 th. That the Monopoly in favor of the Bank of England
and the Mint should be abolished, as well as all restrictions
on the amount of issues of provincial banks; and likewise
the limitation as to the number of banks, ought to be removed.
By the adoption of such a system of money and currency
as is here proposed, the effect would be similar to that which
prevailed during the twenty-two years of the war, under the
Bank Restriction Act. During this period the Spanish dollar
was stamped to pass current, first for 4s. 9d., then for 5s.,
then for 5s. 6d. ; and we had an issue of Is. 6d. and 3s. silver
tokens ; and the one-pound note declined in real valuef as
•Appendix—Note B.
17
compared with gold,, from 5 dwts. to 3J dwts,; yet, uotwith-
«tanding such depreciation, the currency circulated freely at
its nominal amount, was received in discharge of taxes and
other obligations, and answered all the purposes of sterling
money ;—such so-called depreciation of our moneys was not
an evil but an excellence, because they were thereby ren¬
dered just measures of taxed commodities; and producers
were enabled to obtain prices commensurate with their taxes,
and so were remunerated for their labor in a j ust proportion.
Foreigners, under the proposed system, would sell to us at
the nominally high or taxation prices of this country; payment
Avould be made to them for their products in depreciated
coins, and although this might cause foreign exchanges to
be apparently unfavorable to this country, they would be
only nominally so ; for foreigners always exchange according
to the intrinsic value of gold and sUver, as the com¬
mon measures of value, and therefore they would have no
advantage over the home producers ; whereas at present they
receive more gold than the latter whenever prices are any
thing like remunerative, or above the barter level.
Another benefit would be, that the anomaly incident to
the present system of withdrawing bank notes in proper- -J
tion as gold leaves the bank, thereby aggravating the
pressure, instead of supplying the vacuum created by the
abstraction of gold, would be completely put an end to.
Our national debt of 800 millions was contracted during
a period of artificial prices,—but reduce wheat and all
other products to the standard of natural values, and the
pressure of the debt becomes 1200 millions, in real value,,
and our supposed national wealth of 6000 millions at once
sinks to 4500 millions in money value : that is to say, the
debt is actually increased 50 per cent., and the means of
payment diminished 25 per cent., by the contrary operation
of the very same cause.
18
If it be objected that prices would be unduly enhanced,
it may be answered that values always find their level, and
that prices calculated in an appreciated currency, would rise
in the degree of the appreciation. Thus if the natural
price of wheat be 32s. per quarter, and the money or cur¬
rency appreciated 33 per cent, as proposed, the relative price
of wheat would be 42s. 8d., its nominal price; and the
42s. 8d. would contain the same quantity of silver that is now
contained in 32s. ; and in like manner the wages of agricul¬
tural labor, which at their natural rate are 6s. per week,
would be 8s. j)er week, or Is. 4d. per day.
As to certain foreign commodities, for instance Tea, in
which the import duty payable to Government is equal to
2s. per lb., or twice the prime cost of the article, the rise in
price would be only 3d. per lb. The same principle would
operate with sugar, beer, spirits, and other taxed articles,
on which the duties remained unaltered.
With respect to Cotton, which is imported into this coun¬
try free of duty, supposing its selling price to be 6d. per lb.,
that price would be enhanced in the currency proposed to
8d. per lb., but the American who might send a quantity
equivalent to 100 sovereigns, while he would receive
£ 133 6 8 of our depreciated currency ; yet as that cur¬
rency when converted into gold would yield only 100
sovereigns of 26s. 8d. each in price, he would get no more
real value in gold or silver than he is justly entitled to; in
fact he would just receive in value the present price of 6d.
per lb., enhanced nominally to 8d.
The American receiving £ 100 freight for goods in our
currency would obtain only £ 75 of gold : the British ship¬
owner receiving £ 100 of such currency could discharge
£100 of debt,taxes,or seamen's wages. Again, our ship-owner
receiving £ 100 freight in gold at a foreign port, if sent
home it would discharge £ 133 of British debt, taxes,orwages.
19
The British farmer selling 46 qrs. 7 bush, of wheat, at
42s. 8d. per qr., would realise £ 100 of such currency, and
be able to pay £ 100 of rent or taxes, or purchase £ 100 of
British labor or products. The foreigner in selling 46 qrs.
7 bush, of wheat would equally obtain £ 100 of such cur¬
rency, but worth only £ 75 of standard gold or silver ; and ,
to realise £ 100 of gold or silver^ he would have to sell 62 qrs.
4 bush, of wheat at 42s. 8d. ; and the effect of enhancing the
denomination of our coins 33 per cent., would be similar
to a Custom's duty to that extent on the admission of his
wheat. But such duty would only place the foreigner on
an equality with the British grower of corn under the ex¬
isting currency and indirect taxation : for as given quan¬
tities of money and labor are assumed to be of equal values,
so in taxing labor you depreciate or tax money : and the Bri¬
tish farmer now expending 100 sovereigns in taxed labor, the
sovereigns are depreciated or excised by the taxation on
labor to the extent of 33 per cent., as the sovereign com¬
mands only 13s. 4d. of intrinsic labor value, and 6s. 8d. of
taxation price ; and he has now to sell 62 qrs. 4 bush, of
wheat at 42s. 8d. per qr. to obtain 100 sovereigns' worth of
labor; whilst the foreigner taking home the 100 sovereigns
received for his 42 qrs. 7 bush, of wheat, gets £ 100 of in¬
trinsic value for them, or £ 25 more than the British seller
of wheat.
It would thus appear that the enhanced prices of wheat
in this country arising from indirect taxation of 33 per
cent, on labor, are now a premium to that extent to the
foreigner, selling his wheat in our markets.
With respect to the British manufacturer who buys the
raw material at the enhanced price, the price of his manu¬
factured article will be enhanced in proportion to the
rise in raw material. The question may be put, how,
with such enhanced prices, can he sell his goods abroad, or
compete with the foreigner ? The answer is, that he will
20
sell his goods for gold, at its market value, equal say to 100
sovereigns, for which on arrival in this country, he may
command an equivalent value, in other goods or labor, equal
to £ 133 6s. 8d. in the proposed currency.
The truth is, we should have two currencies—Gold at its
market price, or natural value, for our foreign transactions,
f and our National Credit, or Paper Currency, in which tax¬
ation prices would be represented or expressed, for our
home or domestic exchanges.
In accordance with such a monetary system, the foreigner,
on bringing his corn to the British market, would receive,
for example, the following relative prices :—When wheat
sold at42s. 8d. in the proposed currency, the foreigner would
receive 8 dwts. 10 grs. of gold, equal to 32s. of our present
coinage ; and when at
Nominal price Natural price Equivalent in
of wheat, per qr. of wheat, per qr. standard g-old.
42s. 8d. 32s. Od. Sdwts, lOgrs.
It is our opinion that the 600 millions that were added
to our national debt during the Bank Eestriction Act of
1797, were lent in pounds sterling of national taxation
values ; and the interest of the debt was paid in such tax¬
ation pound notes, and the fixed price of gold was
abolished;—and although the act of 1819, that made the
Bank notes redeemable in sovereigns, yet such sovereigns
discharged no greater amount of taxation or public or private
debts than the falsely called "inconvertible bank note"
(as it was always convertible into gold at its market price)
had previously done ; so long as the then existing corn laws
were retained that virtually kept up the price of labor to
9s. a week, and wheat 48s. a quarter (their taxation prices),
as such sovereigns were depreciated in their intrinsic value
33 per cent, when expended in labor, wheat, and other taxed
products and consequently the fundholder was not benefited
48 0
63 0
58 0
36 0
39 9
43 6
9
10
11
5
4
3
21
so largely as is generally supposed by tjie yebajpü
tallic standard of value, as he obtained no greater quantities
of the necessaries of life for the sovereign, than the taxation
note or pound gave, or is intended to give him.
One great advantage which would arise from tl\e proposed
currency is that it would, to a great extent, prevent in future
all " drains" of gold, '' monetary panics," " commercial em¬
barrassments," and stagnations (what Lord Overstone calls
" necessary cycles of trade"), which have occurred so repeat¬
edly since 1819, under our present monetary system, in con¬
sequence of gold being of more value abroad than in England.
Under the present fixed price the same results would follow
were gold to fall in value in relation to silver, by a drain of
silver instead of gold, though not perhaps to the same ruinous
extent. The loss to the producing and other classes from
such panics, and consequent depreciation, have been esti¬
mated for 1821-2 at 100 millions—1825, 300 millions^—
1832-3, 100 millions—1839, 100 millions—1847, 400 mil¬
lions ;—making a total of 1200 millions sterling !*
The bullionistshave attributed much of our occasional ma¬
nufacturing embarrassments to thé high price of bread in de¬
fective harvests ; but it wasnot the high price of breadbutthe
necessity of exporting bullion to pay for foreign corn, under
the existing currency laws, that produced the monetary
panics since the year 1819,^and the consequent contraction
of our circulating medium, based on the amount of gold in
the bank coffers, and theßxed price of gold. Such panics
and manufacturing distress never occurred in 1811-12 and
1816-17, when we had defective harvests, high-priced
bread, and immense imports of corn, under the operation of
the Bank Restriction Act, and the won-fixed price of gold.
It is therefore evident the present currency system, that ad¬
mits of monetary panics, was one great cause of the over-
*It would thus appear the annual average loss for 28 years, arising from
the fixed price of gold, has been a tax on the community of 42 millions
sterling, or one-third in excess of the interest of the national deht.
Y.'helming.cüstress and embarrassment of our commercial and
manufacturing iiiterests, and the enormous loss that occurred
from the depreciation of our public securities, railway and
other investments, in the year 1847.
It is not to be denied that the proposed currency woirld
affect materially foreign fundholders, and also absentees or
British residents abroad. For every £ 100 they now draw
from England, they draw 100 sovereigns ; but under the
proposed currency they would receive only the market
value of the national money at their command. But
it is maintained there would be no injustice in this, because
it is only fair and equitable that all incomes drawn from
England should bear a share of the taxation of this country.
Such share, however, the foreign fundholder and English
absentee have wholly escaped since 1819, with the exception
of the income tax since 1842;—they have virtually been
receiving 38^ per cent, per annum more in real value than
what British fundholders and residents have received since
1819 ; as by remaining in the country and contributing to
the support of the Government, and paying taxes necessary
for the interest of the national debt, the latter have vir¬
tually, in the expenditure of their dividends, suffered a
reduction equal to 33 per cent, on every £ 100 they have
drawn—which reduction has been altogether avoided by the
foreign fundholder and absentee. To put therefore these
latter on the same footing of equality with British fund-
j holders and residents, is only a simple act of justice, to
which there cannot possibly be any well-founded or valid
objection, Besides itis to be kept in view that three-fourths
of the national debt were contracted, and the annual divi¬
dends paid for 22 years, in the paper currency of the
Restriction Act ; and it cannot be asserted that there is any
injustice in paying either the debt itself, or the interest of
the debt, in a currency similar to that in which it was con-
#
tracted. The simple fact is, that the acta of 1816 and 1819
have given an immense bonus to the foreigner and absentee
for the last 30 years.
As to the injury which might be supposed to be inflicted
by the proposed currency on certain classes of the community
by enhancing the price of labor and commodities, it is
evident that, under protective corn laws that kept up
the prices of corn, cattle, and other products, to taxation
prices, the money so expended by the consuming classes
was depreciated in its intrinsic value, in relation to
those commodities, 33 per cent. ; but the corn laws being
now withdrawn, the object of the proposed currency, is to
maintain corn, labor, and products, at their taxation prices,
or 33 per cent, above their natural value as compared with
gold and silver ; and instead of money being depreciated 33
per cent, when expended in taxed labor and products,
its appreciated price will enable the landholder, railway
proprietor, producer, and the working classes generally,
to obtain as much rents, dividends, and necessaries of
life, as they did with the depreciated currency, under pro¬
tective corn laws.
The jonncepaZdiflerence would be in the triflingly increased
price of manufactured goods, arising from the enhanced
cost of raw materials, and also that of tea, sugar, &c. ; but
compared with the vast beneflt to the agricultural classes
and the employers of labor generally, from their being ena¬
bled by means of a taxation currency to recover in enhanced
prices the taxes paid by them on their products, such diffe¬
rence would be of comparatively little moment, and might be
presumed to be fully compensated by the increased security
to the fundholder and mortgagee, and to Government it¬
self ;—for, unless the producing classes, in a country like
England, are well off and justly recompensed for their labor,
the Revenue cannot be kept up, nor can Government be
considered safe from internal convulsions.
The foregoing deductions are based on the enhancement
of our currency 33 per cent., assuming taxation to be only
33 per cent. The results give wages 8s. a week, or Is. 4d.
a day ; wheat 42s. 8d. per quarter ; and silver 6s. lOd. the
ounce, as equivalent values. The com laws of the past
century were taxation laws, that enabled the British agricul¬
turist to recover from the consumer the taxation embodied
in the wages of labor and the general expenditure of the
farmer. Their abolition will imperatively require an altered
currency. Such alteration could not occur at a more appro¬
priate time than the present ; for, although the corn laws
have been repealed for the last 2 years, yet the wages of the
mechanic, artisan, &c., our soldiers, sailors, and the salaries
of our public ofiScers, or persons employed in mercantile
pursuits, have not at present been reduced. Nor have the
rents of houses, manufactories, or the interests on mortgages,
been lowered. All are still in accordance with the taxation
and corn law prices that existed previous to the abolition of
such corn laws ;—nor has the important article of bread
fallen more than a fraction of one half-penny the quartern
loaf, from the prices that prevailed under the corn law of
1842, during the years 1843, 1844, 1845.*
Whether the price of wheat at 42s. 8d. will meet the
requirements of taxation on the agriculturist, may be ques¬
tionable, as it is certainly not in accordance with the corn
laws that existed in the 17th century, before the imposition
of the vastly-increased indirect taxation of the last 60 or 70
years ; as such corn laws forbade the importation of foreign
wheat when our average prices were below 48s. a quarter ;
and such 48s. was equal to the enhanced denomination of
our coins 50 per cent., on the natural relative values of the
standard and measures of value, as they exist under our
present monetary laws :—for example—Labor 6s. a week ;
wheat 32s. a quarter ; silver 5s. 2d. the ounce ;—and adding
50 per cent., it gives—Labor 9s. a week; wheat 48s. a
quarter ; silver 7s. 9d. the ounce; and these com laws which
Appendix—Note D.
25
thus kept up the prices of wheat to about taxation prices,
were the cause why the currency writers have hitherto over¬
looked the disturbance of the equation in this country
betwixt labor and corn, and gold and silver—which equation,
or their uniform relation to each other, is the main principle
of all honest or scientific monetary systems. To restore the
equation as the value of buUion has altered through the in¬
cidence of taxation, by making the coins or moneys of the
country correspond with such altered value, so that the parts
may agree in relation with the whole, is the object of the
proposed Monetary Reform ; but without a just appreciation
of the elements' and influences of taxation and the corn
laws, and a clear perception of the difference between
natural and artificial values, the currency question wUl
remain a problem unsolved.
Events succeed each other so rapidly in the present day,
and modern interests are so complicated and various, that
the time and attention of those who are called upon to *
discharge of many important public and private duties, must
necessarily be too fully occupied to afford leisure for the
perusal of voluminous publications. The writer has there¬
fore merely given a general sketch of his views on the
questions of the currency and taxation, leaving to an
Appendix, which may hereafter be expanded as required,
the fuller and more minute examination of this important
field of enquiry.
APPENDIX.
Note A.
1 .After Mr. Lowndes had gone through the whole of the ptocesse.^ of
coining and changes made from the time of Edward III. to his day,
(King William's reign, 1695) he says, in his report,—'' And now (haviag
cleared my way) I humbly take leave to ofier my opinion that all such
silver moneys as are after enumerated, of the lawful coins of the realm of
England, which are now in being, and are not at all diminished by clip¬
ping, filing, washing, or any other artifice, be raised by public authorili/
to the foot of six shillings and three pence for the crown, and proportion-
ably for the other species, namely, the crown to go for seventy-five pence,
the half-crown to go for thirty-seven pence and a hal'-penny, the shilling
for fifteen pence, and the half-shilling for seven pence half-penny, &c."
2 He also recommended that as the shilling was a coin familiar to
the people they should continue to make such money. "And because
it may he convenient to have the denomination of shillings continued,
let there he added one piece to he called a shilling, or twelve penny
piece, to he equal in fineness, though not in weight, to any standard mo¬
ney now in being, to run for twelve pence sterling (which will he a fifth
part less in weightüiaxi the present shilling : of these there shallbe seventy-
seven and a half in a pound weight troy."
3 It has been the custom of Sir Robert Peel and the hullionists in the
House of Commons to hold up to ridicule, under the cant term of the
•' little shilling," any proposition to raise the nominal value of our metallic
coins by reducing the quantity of pure gold and silver in their weights,
hut not to depreciate the silver standard of fineness below the standard of
Elizabeth—hut we here see that Mr Lowndes, one of the ablest practical
writers on currency, recommended the same measure upwards of 150
years ago, at which time there was a duty on the admission of foreign
wheat of IBs. a quarter, when our average price was helow 48s., and the
price of wheat for that year 50s. per quarter ; there is consequently no
novelty in our proposition to enhance the denominations of our currency
33 per cent., but from the abolition of com laws, there is an imperative
necessity to adjust our monetary system to the requirements of the exis-
ing taxation, so vastly increased in amount by the addition of an enormous
national debt.
4 It has been said that in repaying the depositers in the Savings Bank in
what is called the " little shUling," it would he robbing the depositer
not so, as the Government are bound to repay to the depositers, when called
upon, in the current money of the realm ; and as such shilling would pay
as much rent, taxes, and custom and excise duties, as the existing sovereign
or shilling, the depositer would sufler little injury -, and should the price
of consols fall to 75s. the Government would be the only sufferers.
?
Note B.
1 Sir Isaac Newton, in bis report to the Treasury, 1717, on the relative
value of gold and silver, says "In China and Japan, 1 lb. weight of fine
gold is worth but 9 or lOlbs. weight of fine silver ; and in the East In¬
dies it may be worth 12 ; and this low price of gold in proportion to silver
carries away silver from all Europe."
2 The abolition of the gold standard of value, and gold currency of Hol¬
land and Belgium, and the adoption of silver as the sole standard, is an
important feature in the monetary question, showing that gold and silver
in themselves possess no fixed intrinsic values, except the labor employed
in their production ; nor hav,- they ever been monies, but when coined
into certain fixed quantities and weights.
3 The drain of silver from this country has already commenced, the
Bankers' Circular of the 17th June stating that 580,000 ounces were in
the previous week exported to France, Belgium and Holland.
Note C.
Prices of the 3 per Cent. Consols., during the Bank Restriction
Act, and the non-fixed price of Gold.
Highest Price.
Lowest Price.
Highest Price. Lowest Price.
1796
1796
1807
1807
12 Jan. .
• 70|
30 Dec....
53|;
17 Nov...
. 64# 23 Jan. ...
57|-
1797
1797
1808
1808
17 Jan. .
. 56^
1 June....
47i
17 June..
.691
7 Jan. ...
62f
1798
1798
1809
1809
7 Nov...
. 58
23 Aug....
47i
10 Nov...
. 70|
19 Jan. ..
63|
1799
1799
1810
1810
3 Sept..
. 69
29 Jan. ...
52f
22 May...
71
28 Sep. ...
63i
1800
1800
1811
1811
29 Sept..
.67;^
29 Jan. ...
60
4 Jan. ..
. 66|
16 July...
61#
1801
1801
1812
1812
14 Oct. .
. 70
26 Jan. ...
54i
7 Jan. ..
. 63
10 July..
55i
1802
1802
1813
1813
6 Apr..
. 79
22 Jan. ...
66
24 Dec. ..
• 67i
14 July...
541
1803
1803
1814
1814
6 May..
.. 73
28 July...
50i
9 Apr...
. 72i
31 Mar...
611
1804
1804
1815
1815
6 Dec...
. 58|
6 Jan. ...
53f
21 Jan. ..
. 65f
15 June...
.531
1805
1805
High.
Low.
14 Jan. .
.. 62
8 April..
.. 57
1816 64i
591
1806
1806
1817 83|
631
731
4 Aug..
..64|
1 Dec
58i
1818 81
1819 78 66i
The above fluctuations in the price of consols, elucidate the apparent
anomaly " that if money falls in value it rises in price for instance,
3
giying the speciñc sum of £ 60, at 5 per cent, interest, (which was the
current and legal rate of interest at the time the money was borrowed)
was giving £ 60 of real capital for a nominal sum of £ 100 , but as the
value of money, that is, the rate of interest for its use, declined to 4 per
cent., the price of consols rose to 80, and money then became of two-fifths
less real value, as the purchaser of consols at 80 was content with 4 per
cent, interest, and paid 80 sovereigns for the nominal £ 100.
Should it be said we injure the foreigner by paying his dividends in a
depreciated currency, we reply—the foreigner has a very simple remedy; let
him take in exchange for our national money, the proceeds of purely British
labor—say, £100 worth or iron, pottery, or cutlery, all which are merely
condensed British labor, and as the existing rate of wages in this country
is still based on taxation prices, the prices of iron, hardware, &c., will
not rise higher than they have done of late years, from the national cur¬
rency being placed on a par with such taxed labor, and, consequently,
£100 worth purchased in this market with our national notes, will still
command £100 of intrinsic gold value in America, equally as it does at
present ; and why should we hesitate therefore to raise the denomination
of our coins 33 per cent, above their natural values? Our silver coins,
since 1816, have already been appreciated 6 per cent.;and the far-seeing
Statesmen of America, when in 1779, they adjusted the currency of
that country, raised the dollar to 4s. 6d., intrisically worth 4s. 2d., or
about 8 per cent, above its natural value, which has constantly oper¬
ated to that extent in favor of all their foreign transactions.
The Gold Standard.
" I never could discover why a single gold standard (measure) should
be insisted on in this country, or what could possibly come from it ;
while, on the other hand, it is fraught in all directions with injury and
destruction to the prosperity of the nation. I firmly believe the error to
have emanated originally from a misguided and capricious' minister. No
advantage can ever be derived from it. No other nation has ever at¬
tempted aby thing so preposterous. Try all fine-fangled schemes—main¬
tain gold as the standard—cripple trade—destroy prosperity,—and you
completely starve a great population of the most ingenious and intelligent
artisans in the world; and you will still find, that silver ever toas—silver
is—and silver ought to be—the standard or monetary measure of all pro¬
perty in every part of the world. Its basis is broad and sound, and
nothing can shake it."— Universal Monetary System, by W. Virgo, pp.
12 and 13. London, 1847.
In appreciating the denomination of our coins, we should not affect the
standard measure of value, of gold and silver—but. only their price ; the
standard is a fixed weight of fine gold or silver, of a certain standard of
fineness.
4
Note D.
Return of Hemel Hempsled Union for the Quartern Loaf, of
the best Seconds quality, for the 3^ years after the passing of
the Corn Laws of 1842, with the 20s. per quarter fixed duty,
when the average price of Wheat was below 50s., and when
such duty of 20s. was paid for 101 out of the 200 Weeks.
(The potato disease appearing in the harvest of 1845, the prices of Bread
in the autumn rose to 6d. the loaf, and the prices continued high until the
abolition of the law in 1846.)
Quartern Loaf.
Wheat.
First 6 Months ..
5d
60s.
1843
First 6 Months ..
5d
47s. 2d.
48s.
1814
First 6 Months ..
5id
50s.
Second ditto
56s. 6d.
1845
First 6 Months ..
45s. 4d.
4|d
7)35d.
7)353s. 2d.
5d. a loaf 50s. 5d.
Quarterly Contracts for Bread under Free Trade and the Is. duty.
Quartern Loaf. Wheat.
March, 1849 4id 45s. Id.
June, ,, 5d 44s. 6d.
Sept., 4|d 44s. 6d.
Dec., ,, 5d 39s. 4d.
March, 1850 4|d 38s. 6d-
June 4|d 39s. 8d.
Sept., 4td 42s. i Od.
Dec., 4|d 393, 9d.
March, 1851 4^d 37s. 9d.
June, ,, 4id 39s. 6d.
10)47d. 10)411s. 5d.
say 4jd. 41s. Id.
One of the reasons why the price of the loaf has not been more reduced by
Free Trade in corn, and the lowered price of wheat, is, that its elements
consist of 70 per cent, of wheat, and 30 per cent, of millers' and bakers'
charges. Thus, with wheat a t 48s., per quarter and the loaf at 5^d, the
miller and baker receive l|d. ; the Government 33 per cent, of taxa¬
tion, lid. ; the farmer 2Jd., or 11 farthings—total 3Jd.,—and the two
first items 'being fixed charges, any reduction in the price of wheat must
be taken from the farmers' proportion of 11 farthings.
If wheat falls from 48s. to 383., per quarter, or bread Id. a loaf—it
would abstract 4 farthings or 36 per cent, from the 11 farthings received
by the farmer for rent, wages, &c.—if from 38 to 28—8 farthings or 72
per cent, from his capital engaged in the cultivation of wheat.
5
Oh Natural Value, and Taxation or Artificial Prices.
1. The addition of taxation to natural value has been a stumbling
block to manj of tbe political economists of the present day,—pátticnlarly
the buUionists, whose aim is to measure all products by their " one
measure " the " natural or intrinsic value of gold " without reference to
taxation-
Th.* following examples may tend to elucidate this important question.
- We assume as an axiom that all profits are virtually taxes on the com¬
munity, and as one of the most striking instances, we will take the
Imperial taxes of the Government, which it may be said are their profits
to the extent of 52 millions a year ; amongst such taxes or profits, the
duty on soap, paper, spirits, malt, &c., are unquestionably added to the
selling prices of tbe different products.
3. It is evident that all profits of manufacturers, tradesmen, &c., are
virtually taxes on the community ; as the current expenditure of the
tradesman, from the employment of shopmen, porters, &c., as well as the
rent and taxes he pays on his premises, must be recovered from his cus¬
tomers in the shape of profits, before he can get any return for his capi-
trl, or the means of supporting his family.
Natural Value.
1. The National Unit of Account, or pound sterling, or Money Poun,.\
is no longer the pound troy of silver, as it was originally, for the pound troy
of Silver is now coined into 66s. or at the rate of 5s. 6d. the ounce, whereas
it was coined into only 20s. originally, or at the rate of Is. 8d. the ounce.
2. The standard of natural or intrinsic value is Labor.—But " labor
being an abstract notion,'' as Adam Smith says. Corn is the practical
standard, and silver is the common monetary measure, constructed accord¬
ing to the standard, or in other words, the standard or sterling measure
of values. On an average of years certain quantities of silver and certain
quantities of corn are found to be vmiform equivalents. 3. Thus Is. and 1
peck of wheat, and 4s. or a bushel of wheat, are equivalents.—Why are
they equivalents, or the one the measure of the other? Because it takes
the same quantity of labor to produce each.
4. Twenty days' labor at Is. a day is the equivalent therefore of the
pound sterling of intrinsic or natural value.
5. In Great Britain, silver to conform to the standard is coined into 5s.
2d. ihe ounce, and gold at 15 2-13 times the value of silver, which gives
77s; lO^d. as the price of the ounce of gold, and 5 dwts. 3 grains as the
weight of each sovereign into which the ounce of gold is coined.
6
6. The Representative, or Symbolic, or Paper Found, or legal obligation:
to pay a pound, implies 20 days' labor, or 5 bushels or 20 pecks of wheat,
or 20s. in silver, orSdwts. 3 grains of gold, or a sovereign.—The repre¬
sentative—the measure, and the standard, all conform in this case as they
ought to do.
Taxation Price.
7. Assuming our agricultural laborer's wages to be 98. a week, and
that taxation, and the incidences of taxation, absorb one-third of his
weekly expenditure on the cost of his snbsistence, or 3s. a week, such
wages are 50 per cent, in excess ol the natural rate of wages as compared
with gold and silver, that is, wages Is. a day, wheat 32s. per qr., gold
77s. lOid., and silver 5s. 2d., the ounce ; whilst the wages of 9s. a week
are equivalent to wheat at 48s. per qr., gold £5 16 8, and silver 7s. 9d.
the ounce; and such taxation adds 16s. per quarter to the natural cost of
wheat—and 48s. is then the taxation price of the quarter of wheat ;
or 6s. a bushel, or Is. 6d. the peck—and 9s. a week, or Is. 6d. a day,
is the taxation price of labor.
8. Thus days' labor rcould be the equivalent of the pound sterling of
taxation value.
Results.
9. But as the present standard of value by which Corn and Labor are
measured—does not make allowance for taxation, it can no longer remain
a just measure of value, for the exchange of taxed Wheat and Labor—
unless the denominations of our coins are raised 50 per cent—which
would give the monetary price of the ounce of silver as 7s. 9d. and gold
as 116s. 8d., in which case the gold pound or gold equivalent of the paper
pound—instead of containing 5 dwts., 3J grains of Gold as at present
would then contain only 3 dwts. and 10 grains.
10. Wheat, and all other commodities in this case, would still exchange
at their respective values, or fortbesame quantities of silverorgold. But
the silver having now a higher money denomination, the prices of the
jaheat, &c., would rise likewise and correspond with the higher denom¬
ination of money. Accordingly instead of 4s. a bushel, or 32s. a quarter,
the price of wheat would be 6s. a bushel, and 48s, a quarter. The 48s.
however would contain no more real value than 32s. formerly did.
It would be only nominally, or in price, that there would be any alteration
The effect however would be that while the same quantity of wheat
would buy the same quantity of silver, or its equivalent in gold, the
seller of the' wheat would obtain a,n increased price corresponding to the
indirect taxation he' had paid by increased wages of labor, and other-
7
\iÍ3e, in producing the, ^rheat ¡ and for this silver or gold, or its repre¬
sentative in paper, he would obtaiii credit in payment of taxes to the^
amount of 483. ; or in other words he would be. enabled to pay 48s. wortli
of taxes with one quarter of wheat, whereas, if the silver remained at its'
natural value, or untaxed price, he would require to pay IJ quarters of
wheat, or wAen computed in real value, actually 50 per cent more taxes !
Such increase of denomination, and decrease in value, or purchasing
power of silver as the medium of exchange, is absolutely necessary as a
11 casure of Protection to British producers, to enable them to obtain
prices for their commodities commensurate with the indirect taxation
with which they are burdened.
11. It is evident therefore we must either wholly abandon indirect'
J taxation, or have a currency fitted to represent taxed products, and suitable
for our system of indirect taxation, and the free admission and competition
of the products of untaxed foreign labor.
12. The addition of taxation to natural value of 33 per cent., is not a
substantial addition to the gold unit or sovereign of 33 per cent, more
gold —it is only a nominal increase ; it only counts 33 per cent, more,
and according to this enhanced price, commodities are calculated or
measured in it and by it.
13. In all domestic transactions it must be admitted that whatever
money representative the Government choose to issue as a symbol for the
sterling pound of 20s., if made a legal tender, redeemable by the receipts
of customs, and excise, it would be the pound of account.
14. Taxation, in addition to natural value, ought tobe the great rrgula-
ting metre of all ourdomestic prices, and ever should be in all countries
where indirect taxation enters largely into the cost of the subsistence
of the people. Such currency would be an efficient medium of exchange,
as it would unquestionably represent the labor, embodied in the
intrinsic cost of production, and the labor embodied in taxation, or both
the right and power of the Government to abstract from the community
so many days' labor or products of labor, in name of taxes ; and such
taxation money would in truth be the representative of British labor,
or in other words, neither more nor less than national labor notes.
22 ÂS metallic coins are required it would be necessary to abolish
the fixed mint price of gold,—leaving it to find its value as a commodity.
If its price fell 10 per cent, the existing sovereign, as a commodity,
would be worth only 18s., and if it rose 10 per cent, it would pass
current for 22s. in the discharge of all Government demands, and in all
domestic debts and exchanges—whilst the bank note would as effectually
be the mercantile pound of account as is the present sovereig or oound
sterling of natural value
8
On Revolving Taxation, and the ultimate Distribution of Taxes.
In entering on tliis enquiry, it is assumed the wages of labor must be
in accordance with the cost of the common necessaries of life required by
the agricultural laborer (on whose rate of wages all other wages are more
or less based) ; and that from the existence of heavy taxation in this
country, such cost of subsistence and the wages of labor have been greatly
enhanced above their natural values, as a component part of the three
standards or measures of value—say, wages at Is. per day ; wheat Is.
per peck, or 32s. per quarter ; and bullion, as silver, at 5s, 2d., and gold
at 77s. lOJd. the ounce.
It is thus seen that for the past fifty years the required rate of agricul¬
tural wages has been some 9s. the week, or an advance of 50 per cent,
on 6s. a week, (or an addition of 50 per cent to the natural rate of wages) ;
and it is found from a careful analysis of the generel expenditure of such
9s. a week, as well as other wages of the working classes of a much higher
denomination, that such enhanced cost of subsistence arising from indi¬
rect taxation appears to be full 33 per cent, of the expenditure.
From the above facts it is therefore assumed that the working classes
generally have received 50 per cent, additional wages in excess of natural
values, and have hitherto been enabled to pass to their employers the
taxation embodied in the enhanced cost of their subsistence arising from
such indirect taxes ; and it follows as a general result that their employ¬
ers must have been enabled to pass to their customers not only the taxation
embodied in the laborers' wages, but likewise the enhanced cost of their
own subsistence arising from taxation, as well as the respective profits of
their trades ; and as this rule applies to aU parties engaged in trade or
manufactures, it follows that all taxation on the wages of labor and the
profits of trade ought ultimately to fall on and be paid by the non-pro¬
ducing classes or non-traders—that is, on the recipients of rents,
annuitants, mortgages, bank stock, the proprietors of railways, or
other public companies ; on professional men, the builders of houses,
manufactories, ships, or the constructors of railways, machinery, and
other fixed properties ; orón the expenditure of Government, and the
foreign consumers of British products.
It would thus appear that so long as the working classes receive wage.s
adequate to the taxation embodied in the cost of their subsistence, and
are enabled to pass such taxation to their employers, they are compara -
tively as unconscious of the incidences of taxation as the London steam
engine is of the Is. 2d. duty levied by the Corporation on the ton of coal.
The laborer is thus the humble instrument that engenders three-fourths '
of our taxation, and profits of trade, and sets the machinery of taxation in
motion.
»
The Bank of England.
Of the magnitude aud importance ot this Institution it is difficult to
form a correct opinion. It is the medium through which one million
of Government taxes are weekly received, and one million of Govern¬
ment expenditure weekly paid. It is the great regulator of our system
of currency, and commercial credit ; as on the decisions of the Bank
depends in a great measure the welfare of our vast trading in¬
terests ; whilst the ability and integrity shown by its Directors during
the trying periods of the last 60 years have enabled them to overcome
difficulties that at times have appeared overwhelming.
One of the most important epochs of that period was the 22 years of
the Bank Restriction Act, which abolished the fixed price of gold, placing
the bank in a comparatively easy position, as compared with the return to
cash payments, and the fixed price of gold, since 1819. During the Restric¬
tion Act the efiect of that crusliing instrument called the Bank Screw,
was eomparativelyrarely felt ; but with the return to the fixed price of gold
it has been repeatedly called into operation; and notwithstanding the for¬
bearance of the Directors, has periodically produced the most disastrous
results, bringing to poverty tens of thousands of individuals, including
even some of the Directors themselves.
The adoption of the proposed Currency would require material altera¬
tions in the constitution of the Bank itself, and the following are
Suggestions.
1. The bank Directors, and the authorities of the Issue department
jointly to regulate the current or quarterly rates of discount.
2. The Issue department to charge the Bank the current rate of inter¬
est on the amount of all notes in weekly circulation, allowing 1 percent,
for the management of the Bank.
3. The profits of the future coinage at the mint, and the interest on
the notes, in the first instance to be applied to the liquidation of the
Bank Debt, and the extent of such coinage to be limited and placed un¬
der the superintendance ( f the officers of the Issue department, and weekly
returns made.
4. During the Restriction Act gold was treated as a commodity, and at
one period it was upwards of 25 per cent, above its standard or measure
of value ;—were it again treated as a commodity, and from excess of sup¬
ply its price fall 25 per cent., the intrinsic value of the present sovereign
would be only 15s.
5. With the abolition of the convertibility of the notes into gold,the Bank
would be relieved of the enormous loss of interest on capital caused by the
deposit of bullion in the Bank vaults.
ïo
Observations on the Standards of Labor, and Corn, and Gold
or Silver.
Labor is the primary standard of value, and the instrument of pro¬
duction, and the variations in the length of the day, from the Geographical
position of this country, give us an efficient standard of labor, or 10 hours
as the average day's work for the agricultural laborer, and likewise for our
mechanics and artizans—and any additional number of hours is paid for
as extra time.
The natural standard of labor is regulated by the standard of time
(which is 10 hours for one days lahor), and the standard of the cost of
subsistence.
The standard of com is regulated by the standard of the measure of
capacity, as the peck of wheat, and the standard of subsistence, is based
on the price of a peck of wheat as Is , being the sum of money required
for the general expenditure of the laborer and his family for one day.
The standards of gold and silver are regulated by the standards of
weight and purity, and the standards of subsistence.
On the Standard of Intrinsic Value,
Price is the exponent of value, and to form a standard of value a fixed
price for given quantities of the precious metals, and of labor and wheat,
were agreed upon as follows :
The money value of labor was fixed at Is. per day ; and a peck
of wheat at Is.; an ounce of silver at Ss. 2d. ; and an ounce of gold
at 77s. lOJd., or fifteen times the value of the ounce of silver ; each being
the equivalent or measure of the other.
Such are the existing Standards, and standard measures of Value, that
have been in use in this country since the reign of Elizabeth.
On Artificial Prices.
Since the time of Elizabeth the country has adopted a system of indirect
taxation to a vast extent, which, entering into the cost of the necessaries
of life of the agricultural and other laborers, the wages of labor and the
price of wheat have been enhanced 50 per cent, above their natural values
as compared with standard moneys ; and it would have been impossible to
have retained the metallic standards as just measures of such artificial
prices, had there not been corn laws that kept out the competition of fo¬
reign labor whenever the prices of wheat were below 48s. to 50s. per qr.
These laws had the important effect of depreciating the sovereign 33 per
cent, in value when given in exchange for such taxed lahor or products ;
and this depreciation of its exchangeable value of J, or 6s. 8d. in the pound
was a \'vctvia\.appreciation, or raising the denomination of the coins 50 per
cent., equal to that of raising the ounce of silver from 5s. 2d. to 7s. 9d.,
and therefore when Sir Robert Peel was declaiming in the House of
Commons against the Birmingham "little shilling" the "little sovereign"
was virtually the current money of the realm for our domestic exchanges!.
But with the abolition of corn laws and the free admission of foreign
labor, either the denomination of our coins must be increased 50 per
cynt., in accordance with taxed labor and corn, or all taxes on lobor must
be abolished ; and what says Mr Took on this important question ? why,
" that every nation has a right to form its internal circulation to defend Us
4r$ on/l
11
Tavation and Wages.
Amount of taxation on the expenditure of wages of an agncultural laborer
earning 10s. a week, assuming such taxation to be 33J per cent .
8.
d.
s.
Bread (5 people consuming 11 loaves
at 6d.) . . .
3
9 taxation 33 per cent.
1
3
Groceries ....
0
0
8
Fuel and Beer . .
1
0
0
4
Meat ' .
0
0
4
Clothes, &c. . . .
9
0
3
Bent
6 capitalised taxation in
the cost of the house
0
6
10
0
3
4
Intrinsic or natural value is 66J per cent. ; artificial or taxation value
is 33i per cent.
In the Prize Essay of the National Confederation of Liverpool (several
of whose Committee are Members of Parliament) the amount of taxation
on a labouring man's wages earning 20s. a week is assumed to be 33/. 15s,
per cent, in which calculation they have omitted the capitalized taxation
on rent at 3s. a week, which would add Is. a week to the taxation, making
it altogether 38 per cent.
It is evident that if the cost of a house is enhanced 33 per cent, by
taxes on the materials and labor, so must the rent be one-third more—
which increased rent, strictly speaking, is a retrospective taxation, as the
taxes so paid were absorbed in the national expenditure of the year when
the house was built.
In their advocacy of substituting direct for indirect taxation they
propose a tax of three-fourths per cent on every man's daily wages, over¬
looking the fact that in thus enhancing the cost of labor, they must
indirectly tax corn and bread.
On the Standard of Wages.
The rate of wages are not regulated by the price of gold, but in all old and
thickly-inhabited countries are greatly influenced by'the cost of subsis¬
tence of the gricultural laborer, and the diflereiit kinds of food consumed ;
but as a general result, whenever the price of labor is low, the cost of
subsistence is also low; thus the taxed wheaten loaf in England requires
Is. 6d. a day, the rye bread of Germany lod.—lu Russia with rye breap
and serf labor 4d. to 6d.—The potato diet of Ireland 6d.. and the rice of
India 2d. to 3d., and the pulse of Egypt 3d. to 4d. a day.
12
Taxation is another important element of the scale of wages, as in
those countries where the common necessaries of life are highly taxed,
the standard of wages must be enhanced in proportion.
The taxes of a country do not necessarily affect the standard of wages ;
there are two species of taxation—direct and indirect—and a tax on
income, whether derived from houses, lauds, fund?, mortgages, railways,
ôr the profits of trade or professions, does not affect the cost or price of
labor or com.
But when a government impose indirect taxes on the cost of the sub¬
sistence of the laborer equal to 33 per cent, of their expenditure for the
necessaries of life, requiring wages at 9s. a week instead of 6s.—the wages
of laborare then raised 50 per cent., or from Is. to Is. 6d. a day, or to 9s.
a week—and consequently wheat, the real standard of labor, must
be equally enhanced in price 50 per cent., or from 32s. a qr., to 48s.
a qr., and our gold and silver coins representing natural values only, are
no longer just measures or equivalent values when given in exchange
for such taxed wheat and labor.
Retrospective Taxation is taxation in perpetuity, from which the Go¬
vernment derive no available revenue—for instance,the amount of taxation
embodied in houses, manufactories, and machinery, being 33 per cent, of
their cost, it remains as an incident of taxation, an annual rent-charge on
the occupier and employer, that requires one-third additional rent.
Assuming the amount of rents received fbr such bouses, &c., to be 40
millions a year, the annual retrospective taxation is 13J millions.
ITie indirect taxation on the capital and labor embodied in land requiring
the addition of 33 per cent, to the rents, and such rents being 40 millions
a year, the retrospective taxation is also 13| millions.
The present cost of railways being 216 millions, the embodied taxation of
72 millions is a rent-charge, or restrospective taxation of3,600,0001. a year.
The capital embarked in shipping is also subject to a similar tax.
The payment of the dividends of our national debt, are equally retro¬
spective taxation—levied to pay the interest of the money expended in
the year the debt was incurred.
Indirect Taxation has many advantages;—it enables us to tax the
foreigners who consume our goods to the extent probably of some 5 to 10
millions a year, by their paying the taxes of the laborer and their employ¬
ers producing the goods.
The Government also in their annual expenditure of some 21 millions
in salaries, wages, ^nd materials, cqntribufë one-third of the amount to
our general taxation ; and the fundholders in expending the greater pro •
portion of their dividends of 28 millions likewise contribute one-third of
such expenditure to our annual revenue, or some 9 millions a year—
making together some 16 millions a year that is returned to the national
exchequer.
13.
Californian- Gold.
Gold has been the idol of our modem statesman, and is what every one
strives to possess, but when obtained is a positive loss, unless it is imme¬
diately parted with, from being unproductive capital ;—^it is like an empty
house—not yielding rent.
Were we to receive 20 million pounds' worth of gold bullion from the
newly discovered mineral districts, they would not add to the money
of the country, unless coined into sovereigns.—It is not the interest of the
bank of England, or the country bankers, to have any material increase of
gold coinage, as it might to a certain extent supersedethe issue of their notes,
and destroy a large amount of credit capital which they are now enabled to
afford the community by such issue.
No country can become possessed of gold without giving in exchange
for it commodities, or public or private securities—and its possession in
excess of the required amount of the currency, therefore, would be a
drain of national capital, that might be usefully employed in stimulating
its industrial resources, and the t reation of its wealth.
It may be a question to what extent the bank of England could
purchase any greater quantity of bullion, than the amount of notes they
may have in actual circulation (which at this time is 19 millions), unless
it was sent to the mint and coined into sovereigns—as they, like all other
purchasers of bullion, must give their notes representing their capital for
the bullion purchased and deposited in their vaults.
It cannot be doubted that were the Americans to find a mountain of gold
and we retained the fixed price of 77s. lOèd. the ounce, they might be¬
come possessed of a large proportion of our funded debt, our railroad
securities, bank stock, &c., and the whole Ration become their slaves,
working night and day to pay the interest of the debt.
It has been said by a high monetary authority that " he cared not who
purchased our debt, nor who paid it off hut purchasing and paying off
are two distinct proc.sses;—the sting of the debt would not be removed
by the foreigners purchasing our public and private securities.
The American in exchanging his bullion for bank notes, virtually coins
them into sovereigns, as he may immediately demand sovereigns for the
notes Î and the fixed price of gold at the Bank of England is the real
Golconda of the foreigner, as with the products of his bullion, he has already
bought up a large amount of his own state securities held in this country,
and he can purchase our public and private securities, our railways, houses,
or land, and receive their interest and rent, whilst residing abroad, without
contributing to our taxation by his general expenditure.—And what is it
we get in exchange for our national securities, land, &c. ? Why Gold !
that is as unproductive of interest or rent, whether coined or uncoined, as
the waters of the Dead Sea ;—we get unproductive capital in exchange
for our productive capital, that is constantly yielding interest and rents
to its possessors.
14
Taxed Gold and Silver Bullion, and the Fixed-Price of Gold.
As all goyernment taxes are the profits of the State, so are the profits
of private individuals taxes on the consumers of the articles produced.
The excessive duty of 30 per cent, on our manufactures levied by the
Americans are profits to that Government, and just so much saving to
their people of more direct and disagreeable taxation, like our income tax :
—the consumption of British and French goods is voluntary.
The Emperor of Russia levies a royalty of profits of some 20 per
cent, on the product of the gold mines, worked by his subjects, and when
the gold is sent to this country, and exchanged for bank notes, represent¬
ing bank capital, we pay the tax on the gold levied by the Russian state ;
and when the Califomian digger of gold, obtains an ounce for one day's
subsistence (costing probably 5s.) and the gold is sent into this country
and sold at our fixed price of 77s. 9d. the ounce, we virtually pay the
American a tax of 72s. 9d. the ounce;—but \et th.efixed price in this country
be abolished and then gold like all other commodities will ultimately find
its level as the representative of labor and the cost of subsistence.
We most assuredly are sufficiently drained of our capital by imperial
and local taxation, and to allow the foreigner to tax us to the present
J enormous extent by taking advantage of our credulity, and our fixed
price of gold, is an infatuation without parallel in the history of nations.
If in California an ounce of gold is obtained for one day's subsistence
costing 5s. 2d., the ounce of silver and the oxmce of gold are consequently
brought topar, in labor and cost of subsistence,—thus labor and subsist¬
ence being the basis of the existing standards of value of gold and silver,
the 15 million sovereigns or bullion now in the bank vaults, or 3,875,000
ounces of gold, are virtually of no more intrinsic value than the same
number of ounces of silver that represent one million sterling—leaving
the value of the sovereign as iidlion (one-fourth of the ounce of gold), when
measured by the standard of corn or subsistence as Is. 3id.
The increased Supply of Gold.
There seems a general impression, some undefined idea amongst
all classes of the community, that a rise in the prices of all com¬
modities will by some means or other take place in a similar degree
to that which followed the discovery of the gold and silver mines of South
America in the 15th century.
We do not share in these expectations, for the following reasons.
Since that period bank notes, bankers' checks, post ofiice orders and
stamps, and bUls of exchange, have been substituted to a vast extent
for gold and silver coins ; and our national debt of 800 miUions, as well
as those of other countries, have become floating securities that are passed
as money from one country to another in discharge of debts.
15
That in this country therè is now an excess of currency over the de¬
mands of trade, and the wants of the community ; as is exemplified by
the 15 millions of gold and the 10 millions of unemployed bank notes in
the Bank of England, and a large surplus of unemployed notes in the Eng.
lish, Scotch, and Irish banks—and were 20 millions more sovereigns
coined they would not be required unless the prices of all commodities
were greatly enhanced.
Judging from recent events, such as the depressed state of the colonial
markets, the ruinous prices of our great staple products of iron, coal, and
other minerals, and agricultural produce, it would appear that notwith -
standing the greatly increased quantity of gold, the prices of our products
must to a great extent still remain regulated by the vicissitudes of supply
and demand of the market, so long as the fixed price of gold remains.
OUR MONETARY SYSTEM.
Coins were originally issued for the collection of the taxes of the State.
In the earliest periods they did not possess intrinsic value, as the repre¬
sentative of their cost in labor,—but for the past ten centuries their value
and price have been based on the assumed cost of the labor employed in
the production of the precious metals, and their density, and the purity of
their metal, have been great preventatives of forgery.
The First Monetary Era.
The Unit of Account of the year 1066, or the £. sterling of 20s., the
£. s. d. of our ledgers, is now an ideal or symholio pound, used for the
expression of value, or a standard of reference to value, in all foreign and
domestic exchanges-
Its standard of value and weight was the pound troy of 12 ounces of
silver, coined into 20 shillings,—and its standard of Price was Is. 8d. the
ounce Î for without price there can be no exchangeable valué.
The co-relative STANDARDS of VALUE and PRICE were—wages
4á. a day, wheat id. a peck or 10«. 8d. a qr.
Thus Id. being equal to 8 grains of silver, 4d, a day wages were equal
to 32 grains,—and 5 days' labor equivalent of the ounce of silver of 160
grains, at 20d. or Is. 8d. the ounce, and 60 dayà' labor at 4d. a day the
equivalent of the lb. of silver of 1960 ounces, or the pound sterling.
But as the price of silver in after periods decreased, the price of
wages and com were increased ; for as money falls in value it rises in
price, so are the standards of wages and com raised in proportion.
The Second Monetary Era,
Or the Elizabethan Standards,—when the labor cost of silver being
reduced to 75 per cent.,—its price was enhanced some 200 per cent., the
12 ounces of silver were coined into 62 Shillings, and the relative , stan¬
dards of wages raised to Is. a day, wheat Is. a peck, or 30s. per quarter.
During this period, in 1694, the Bank of England was established, and
the issue of bank notes, and in 1716 the price of gold fixed at £ 4 2 8 as the
equivalent of silver at 5s. 2d. the ounce. The issue of exchequer bills in
1708, and the creation of our National Debt, a species of credit
m
!
money, or money stock, transferable from one individual to another, bear¬
ing interest — with a great increase of bills of exchange, — the es¬
tablishment of Scotch: banks of deposit, issuing one.pound and other
notes,—and the creation,of Bank and East India stock or money credits.
The Third Monetary Era,
Was the suspension of cash payment by the Bank of England, and the act
of 1797, abolishing the fixed price of gold, making the bank note a legal
tender, and the standard of money value, or a token of taxation price.
The issue of coimtry bank ánd Bank of England notes of jê 1 and up¬
wards, Avithout limitation-^the latter uotesbeipg convertible Hito gold at its
market p'ice only.
The Spanish dollar of 4s. 2d. was stamped to pass fo 4s. 9d. and 5s. 6d.,
.md silver tokens issued of is. 6d. and 3s. each.
In ISlii, silver as q, legaltcndt r reduced to ICs. and free coinage abolished.
The pricf of gold in 1814 rose to £5 4 0 theoun ie, and the guinea
as a commodity yvas sold for 27s. to be sent abroad—although a? a
coin it wa.s worth only 20s. in this country.
It has been asserted by many persons that the 20s. bank note was de¬
preciated in its value 25 per cent.—although it continued to pay all taxes
and discharge all public and private debts ; but if we admit such to have
been the fact,it follows as a sequence, that if the fixed price of gold is again
abolished, and its price fall 25 per cent., the bank note, as a token
of value, and the present sovereign as a coin, will be appreciated 25
per cent, as compared with the value of uncoined gold;
The. Fourth Monetary Era,
^Vas the act of 1819, or Peel's bill, restoring the fixed price of gold,
to the assumed standard of Elizabeth,—a standard of value only appli¬
cable to natural values, or untaxed commodities,—and the withdrawal of
£l notes by the Bank of England, followed by their abolition in the
country banks in England and Wales in 1829.
The monetary panic in 1825, that was stopped by the emission for a
temporary period of 2 millions of one-pound old Bank of England notes.
In 1826 gold at 77s. lOjd. the ounce was made the sole standard of
y.slue, whilst as the equivalent of silver at 5s. 2d. the ounce, its price should
have been 82s. 8d.,—and we thus kept up our false standard of value.—
The silver standard abolished, and the lb. of silver was coined into 66
shillings, which then became tokens of value.
Joint Stock Banks were established, and in 1833 bank notes declared
a legal tender, except at the Bank itself.
In 1842 the Bank of England was divided into two separate departments
—the hank of issue and the hanking department, and its issue confined to 14
millions of notes, with such an additional amount as it may have buUion
in its vaults.
17
in 1844 an act passed limiting the issue of country bank notes, and
compelling the Scotch and Irish Banks to hold one-third of the amount
of their issue of notes in gold, and prohibiting new banks of private issue
—substituting Bank of England branches in the provinces.
In 1847, the great monetary panic, relieved by the temporary sus¬
pension by the Government of the Restriction Act of 1844.
Bitring the past 25 years, bankers' checks, post-ofTice money orders,
and stamps, have been adopted, which have superseded the use of coins
and notes to an immense extent, with the creation of 220 millions of rail¬
way securities, or credit capital, based on fixed pioperty, but such
securities being liable to be transferred to foreign countries.
A SuGGllSTIiD CuKltENCY.
From the enormous increase < f ti:e precious metals it seems probable
they may ere long become very i.neirtidn measures of fixe I values, ami
we are of opinion that the taxation of a country would be an efficient
practical standard of value and price, as taxation is the abstraction of a
given quantity of money representing a given quantity of labor from the
community generally, in discharge of the labor services and the debts in¬
curred by the Government for the products of labor ;—and why should
not taxation therefore express value, as well as a given quantity of the
precious metals, whose admitted values are the cost of the labor employed
in producing them ?
Thus, assuming the wages of an agricultural laborer (on which all othef
wages are based) in this country to be 9s. a week, or Is. 6d. a day—13J
days' labor would give the unit of 20s., or pound of accmmt, cr-l the issue
of National Bank Notes of 1, a-vl upwaul ; « itii go'd „ud hii v r coins as
tokens of value (as our present shillings arc) containing such a fixedweight
and purity of the precious metals as may be agreed upon, the amount of
which should be regulated by a Government issue department—would
give us an efficient domestic currency, or taxation money not
liable to be sent abroad, and in accordance with tlie true principles of
money.
The abolition of the fixed price of gold would leave bullion to find its
market price as a commodity j and if its price falls 25 per cent.,
the present gold coins of this and all other countries would be depreciated
25 per cent., and become Government tokens of velue ; and every State
must then resume the ancient privilege of confining to itself the
coinage of the Stdte monies.
All moneys strictly speaking are the coins of a State, bearing the im¬
press of the State stamp, which they agree to receive in disci arge of taxes
Or custom duties ; and consequently a free coinage from bullion depreciated
25 per cent, in its intrinsic value, would be a robbery of the State to the
benefit of private individuals;
sl8
Sir Robert Peel's Monetmry Law.
Amidst all our monetary fluctuations the Standards of Value of the
Elizabethan period still remaines the basis of our exchanges—although
they simply represent hatural values—whilst oiir system of indirect
taxation has enhanced our wages and corn (the actual real and only
standards of value) some £0 per cent, above their natural prices, and
from a false estimate of the relative values o*" silver and gold, the latter
being lowered instead of raised in price, (an error of la ¡¡er cent.) there has
been a profit on the re-coinage of our sovereigns into rrianV foreign coins.
Sir Robert Peel Seems not to have dllly considered the important fact,
that the sovereit.h has two attributes ;—it contains 20s. worth of gold, and
may fluctuate in value as a commodity, and be sent abroad ; but aS a coin
it can pay only 20s. of taxatiön however much its value as bullion ma^ be
enhanced.— h s overs ght hasled to the monetary panicsbt the last 30 years,
which have en'ailed a loss upon the country greatly exceéding the amount
of our national debt.
Posterity will view with astonishment a minister who . assumed he had
taken the tax off bread made from British corn, from having admitted
foreign corn free of duty,— whilst the burthen of some 30. millions of indi¬
rect taxation on the wages of our labor remain unaltered;
Posterity will view with astonishment, a statesman attempting to
measure artificial values arising from taxation, by a currt ncy of natural
value ;—that is, the products of taxed labor by untaxed labor (gold). It
would have been quite as reasonable to have weighed the pound ol bread by
the half-pound, or to use the quart and pint as equal measures,of capacity.
The jatuily ol a Statesman persiáting for .'10 y ars in inrpos ng upon
the«ation a currency based on natural values and a fixed price of gold,
with a national debt of 800 millions, and a Government annually abstract¬
ing 56 millions of taxes ;—a local taxation of 14 millions ;—and the
burthen of the condensed taxation in our houses, land, railways, &c.j &'Ci,
enhancing the amount of their annual rent 20 millions ; whilst the incidences
of our general taxation w ere a furtl.er additional tax of some 8 of 10 irrilliori j
and the monetary panics of the last 30 years, which patiics, oii an average
have annually cost the country 40 mill ons. The results are—
Government Annual Taxes...56. Local... 14. Inherent taxation
on fixed Properties...20. Incidences of Taxation...8. Panics...40
Totai-—138 millions, whilst the available taxation for the cur¬
rent expenditure of the State is only some 26 millions.
To the above we might add the effects of our restricted cur¬
rency, and false stándafd of value ánd price, which have presseá
so heavily on our manufacturing interests—but thé above ana¬
lysis of taxation will sufficiently indicate that this country is not
in a position to contend against the free admission of foreign pro¬
ducts—a question we shall leave for the consideration of the
public, and the advocates of Sir Robert Peel's system of unlimited
competition.
•19'
Cn the ¡ielative Values of Gold, Silver, and Labor,
The fall in the value of silver after the discovery of South
America, indicates the probable results of the recent discoveries
of gold, assuming that all exchangeable values are based on labor.
Thus when it was found that a given quantify of silver, pro^
duced by a given quantity of labor, was 3 lbs. instead of I Ib.,
its value as a commodity, or article of exchange, was reduced
two-thirds ; and as a measure of value its price was enhanced
from Is. 8d. to 5s. 2d. the ounce ;—and the other relative standards
of value, the wages of labor, were equally advanced from 4d. to
Is. a day, and wheat from 10s. 8d. to 32s. a quarter.
In applying the sam.o rule to our present gold standard of value,
it will be fouud that if 3 ounces of gold are now obtained by an
equal quantity of labor as ^ ounce previously, its exchangeable
value will be reduced two-thirds, and its price, as a measure of
labor value be enhanced from 77s. lO^d. to 233s. 7^d. the ounce,
and the relative standards of v, ages raised from Is, to 3s. a day,
and wheat to 96s. a quarter.
Thus if we retain gold as our sole standard oi value, the price
of wheat will be y6s. per qr., whilst other countries with the
silver standard vdll produce wheat at 32s. per qr„ and their
profit in sending it to this country, will be 200 per cent.
The present standards of gold, and the wages of labor, are
unquestionably based on labor as Is. a day, or 11\ days' labor
for the ounce of gold, as its assumed productive cost in labor ;
but what will our statesmen and bullionists say to their fixed
price of gold, if 20 or even 10 days'labor should ere long pror
duce the ounce ? In the latter case the sovereign as bullion would
only be worth 2s. 6d., although as a State coin passing for 20s.
The American President says, "the increased quantity of gold
will add greatly to the currency of the world,"—but gold is not
currency until it is coined, and should the Americans continue
to coin unlimited quantities of Eagles, and half and quarter
Eagles of the present weight and purity to pass for 20s., such coins
wiU bè tokens of value in that and aU other countries, as they will
not possess the intrinsic value, of 20 days' labor—and if they find
their way to this country they will be returned to pay the high
custom duties on the admission of our manufactured goods.; }
It wiU be found on investigating the nature of trade, thát aU
! exchanges of commodités are the barter of labor for labor, and
the precious metals themselves must ultimately conform to this
law of Commerce.
The ancient Standard of Value, the Tower Standard of 1092, was the lb. weight of
..^Irer coined into 20^.,—and the price was Is. 8d. the ounce, and Labor 4d. a day ;
.thus & days' Labor were the équivalent of the ounce, and 60 days*, the lb. of Silver.
Hemel Hempsted, January 1st, 1852.
12
Taxation is<anotlier important element of the scale of wages, as in
those countries where the common necessaries of life are highly taxed,
the standard of wages must be enhanced in proportion.
The taxes of a country do not necessarily affect the standard of wages ;
there are two species of taxation—direct and indirect—and a tax on
income, whether djrived from houses, lands, funds, mortgages, railways,
or the profits of trade or professions, does not affect the cost or price of
labor or corn.
But when a government impose indirect taxes on the cost of the sub
sistrnce of the laborer equal to 33 per cent, of their expenditure for the
necessaries of life, requiring wages at 9s. a week instead of 6s.— the wages
of labor are then raised 50 per cent., or from Is. to Is. 6d. a day, or to 9s.
a week—and consequently wheat, the real standard of labor, must
be equally enhanced in price 50 per cent., or from 32s. a qr., to 483.
a qr., and our gold and silver coins representing natural values only, are
no longer just measures or eqiiivalent values when given in exchange
for such taxed wheat and labor.
Retuospective Taxation is taxation in perpetuity, from which the Go¬
vernment derive no available revenue—for instance,the amount of taxation
emboJied in bouses, manufactories, and machinery, being 33 per cent, of
their cost, it remains as an incident of taxation, an annual rent-charge on
the occupier and employer, that requires one third additional rent.
Assuming the amount of rents received for such houses, &c., to be 40
million t a year, the annual retrospective taxation is I3| millions.
The indirect taxation on the capital and labor embodied in land requiring
the addition of 33 per cent, to the rents, and such rents being 40 millions
a year, the retrospective taxation is also 13J millions.
The present cost of railways being 216 millions, the embodied taxation of
72 millions is a rent-charge, or restrospecîive taxation of 3,600,000/. a year.
The capital embarked in shipping is also subject to a similar tax.
The payment of the dividends of our national debt, are equally retro¬
spective taxation—^levied to pay the interest of the money expended in
the year the debt was incurred.
Indirect Taxation has many advantages;—it enables us to tax the
foreigners who consume our goods to the extent probably of some 5 to
millions a year, by their paying the taxes of the laborer and their employ¬
ers producing the goods.
The Government also in their annual expenditure of sometí millions
in salaries, wages, and mateiials, contribute one-third of the amount to
<iurgeneral taxation ; and the fundholders in expending the greater pro¬
portion of their dividends .of 28 millions likewise contribute one-third of
such expenditure to our annual revenue, or some 9 millions a year—
making together some 16 millions a year that is returned to th e national
exchequer.
13,
Califomian Gold.
Gold has been the idol of our modem statesman, and is what every one
strives to possess, but when obtained is a positive loss, unless it is imme¬
diately parted with, from being unproductive c.ipital ;—it is like an empty
house—not yielding rent.
Were we to receive 20 million pounds' worth of gold bullion from the
newly discovered mineral districts, they would not add to the money
of the country, unless coined into sovereigns.— It is not the interest of the
bank of England, or the country bankers, to have any materi:d increase of
gold coinage, as it might to a certain extent superse'lethe issue of their notes,
and destroy a large amount of credit capital which they are now enabled to
afford the community by such issue.
No country can become possessed of gold without giving in exchange
for it commodities, or public or private securities—and its possession in
excess of the required amount of the currency, therefore, would be a
drain of natic nal capital, that might he usefully employed in stimulating
its industrial resources, and the ireation of its wealth.
It may he a question to what extent the bank of England could
purchase any greater quantity of bullion, than the amount of notes they
may have in actual circulation (which at this time is 19 millions), unless
it was sent to the n int and eoinid into sovereigns—as they, like all other
purcbaseis of bullion, must give their notes, or credit receipts, represent-
ingtheir capital for the bullion purchased and deposited in their vaults.
It cannot be doubted that were the Americans to find a mountain of gold
and we retained the fixed price of 77s. 10|d. the ounce, they might be¬
come pos-essed of a large pronorlion of our funded debt, our railroad
securitiis, bank stock, &c., atid the whole nation become their slaves,
working night and day to pay the interest of the debt.
It has been said by a high, monetary authority that " ho cared not who
purchased our debt, nor who paid it oil but purchasing and paying off
are two distinct proe ssas;—the sting of the debt would not be removed
by the foreigners pvreliai.ing our public and private securities.
The American in exchanging his bullion for bank notes, virtually coins
f II inü sovereigi s. as he may iinmed'ately demand sovereigns for the
notes : rnd the fixed price of gold at the Bank of England is the real
Golconda of the foreigner, as wit' the products of hisbullion, he has already
bought up a large amount of his own state securities held in this country,
and he can pui\ base our public and private securities, our railways, houses,
or land, and rei eivi their interest and rent, whilst residing abroad, without
contributing to our taxation by his general expenditure.—.lind what is it
we get in exchange for our national securities, land, &c.? Why Gold!
that is as unpioductive of interest or rent, whether coined or uncoined, as
the waters of the Dead Sea ;—we get unproductive capital in exchange
for our productive capital, that is constantly yielding interest and rents
to its possessors.
14
Taxed Gold and Silver Bullion, and the Fixed-Price of Gold.
As all government taxes are the profits of the State, so are the profits
of private individuals taxes on the consumers of tlie articles produced.
The excessive duty of 30 per cent, on our manufactures levied by the
Americans are profits to that Government, and just so much saving to
their people of more direct and disagreeable taxation, like our income tax :
—the consumption of British and French goods is voluntary.
The Emperor of Russia levies a royalty of profits of some 20 per
cent, on the product ol the gold mines, worked by his subjects, and when
(he gold is sent to this country, and exchanged for bank notes, represent¬
ing bank capital, we pay the tax on the gold levied by the Russian state ;
and when the Californian digger of gold, obtains an ounce for one day's
subsistence (costing probably 5s.) and the gold is sent into this country
and sold at out fixed price of 77s. 9d- the ounce, we virtually pay the
American a tax of 72s. 9d. the ounce;—but let the fixed price in this country
be abolished and then gold like all other commodities will ultimately find
its level as the representative oflabor and the cost of subsistence.
We most assuredly are sufficiently drained of our capital by imperial
and local taxation, and to allow the foreigner to tax us to the present
enormous extent by taking advantage of our credulity, and our fixed
price of gold, is an infatuation without parallel in the history of nations.
If in California an ounce of gold is obtained for one day's subsistence
costing 5s. 2d., the ounce of silver and the ounce of gold are consequently
brought to par, in labor and cost of subsistence,—thus labor and subsist¬
ence being the basis of the existing standards of value of gold and silver,
the i5 million sovereigns or bullion now in the bank vaults, or 3,875,000
ounces of gold, are virtually of no more intrinsic value than the same
nuntber of ounces of silver that represent one million sterling—leaving
the value of the sovereign as '«Mian (one-fourth of the ounce of gold), when
measured by the stairdard of corn or subsistence as Is. 3Jd.
The increased Supply of Gold.
There seems a general impression, some undefined idea amongst
all classes of the community, that a rise in the prices of all com¬
modities will by some means or other take place in a similar degree
to that which followed the discovery oí the gold and silver mines of South
America in the 15th century.
We do not share in these expectations, for the following reasons.
Since that period bank notes, bankers' checks, post ofiice orders and
stamps, and bills of exchange, have been substituted to a vast extent
for gold and silver coins ; and our national debt of 800 millions, as well
as those of other countries, have become floating securities that are passed
OS money from one country to another in discharge of debts.
IS
That in this country there is now an excess of currency over the de¬
mands of trade, and the wants of the community ; as is exemplified by
the 15 millions of gold and the 10 millions of unemployed bank notes in
the Bank of England, and a large sui'idus of unemployed note- in the Eng.
lish, Scotch, and Irish banks—and were 20 millions more sovereigns
coined they would not 'le required unless the prices of all commodities
were greatly enhanced.
Judgiiig from recent events, such as the depressed state of the colonial
markets, lIic ruinous prices of our great staple products of iron, coal, and
other minerals and agricultural produce, it would appear that notwith-
Stan ding the greatly increased quantity of gold, the prices of our products
must to a great extent still remain regulated by the vicissitu des of supply
and demand of the maiket, so long as the fixed price of gold remains,
with a metallic currency of natural values irrespective of taxation prices.
OUR .MONET .^RY SYSTEM,
Coins were originally issued for the collection of the taxes of the Slate.
In the earliest periods thev did not pos-ess intiinsic value, as the repre¬
sentative of their cost in labor,—but for the past ten centuries their value
and price have been based on the assumed cost of the labor employed in
the production of the precious meta s, and their density, and the purity of
their mietal, have been great preventatives of forgery.
The First Monetary Era.
The Unit of Account of the year 1066, or the &. sterling of 20s., the
£. s. d. of our ledgers, is now an ideal or symbolic pound, used for the
expression of value, or a standard of reference to value, in all foreign and
domestic exchanges-
its standard of value and weight was the pound troy of 12 ounces of
silver, coined into 20 shillings.—and its standard of Price was Is 8d. the
ounce ; for without price there can be no exchangeable value ; it is the ex¬
ponent of the value of the products of labor based on the labor cost of
silver and gold.
The co-relative STANDARDS of VALUE and PRICE «erre—wages
4d. a day, wheat id. u peck or lOs. 8«/. a qr. ; and 5 days' labor were
equivalent to the ounce of silver, and 60 days' the lb. of silver.
But as the price of silver in affer periods decreased, the price of
wages and corn were increased ; for as money falls in value it rises in
price, BO are the standards of wages and corn raised in proportion.
The Second Mon?tary Era,
In the reign of Henry the 6th, the value of silver having fallen 50 per
cent., thé lb. of silver was coined into 30s., equal to wagis at 8d. a day,
wheat Sd. a peck or 21s. 4d. per quarter; and in Edward the 6th reign
into 60s . equal to wages at Is. a day and wheat 32s. a quarter.
•In Elizaheth'à reîgn the 12 ounces of silver were coined into 02 shillings,
and the relative standards Of wages raised to 12id. a day, wheat 12|d. a
peck, or 33s. 4d., and the ratio of gold to silver raised fromlO to 15,
During ibis period, in 1694, the Bank of England was established, and
théissne of bank notes, and in 1717 the price of gold fixed at 77s. 6d. as the
eqtiivalent of silver at 5s. 2d. the ounce. The issue of exchequer bills in
1708, and the creation of our National Debt, a species of credit
*|D omr previoasealciilationB to avoid fracUona we asoomed labor ao only Is. a day,
and.Wkwt 33o. per v.
IB
woney, ot money stock, transferable from one individual to another, beat¬
ing interest — with a great increase of bills of exchange, — the es¬
tablishment of Scotch banks of deposit, issuing one.pound and other
notes,—and the creation of Bank and East India stock or money credits.
Daring {his century was introduced our .system of indirect taxation that
enhanced the cost of the snhsistence ( f the laborer 33 per cent., dnd his
wages 50 per cent. ;—a new element of Brice previously unkncu-n in ouir
monetary standards or measurers of labor value.
The Third Monetary Era,
Was the suspension of cash payment by the Bank ofEngland, and the act
of 1797, abolishing the ftxed price of gold, making the'bank note a legal
tender, and the measure of money value, Or taxation prices.
The issue of country bank and Bank of England notes of £ I and up¬
wards, withoutlimitation—the latter notes being convertible into gold at its
market price only.
The Spanish dollar of 4s. 2d. was stamped to pass for 43. 9d. and 5s. 6d.,
and silver tokens issued of Is. 6d'. and 3s. each.
In 1816, silver as a legal tender reduced to 40s. and free coinage abolished.
The market price of gold in 1814 rose to £5 4 0 the ounce, and the
guinea as a commodity was sold for Í7». to be sent abroad—although as
<1 coin it was legally worth only 20s. iii this country.
It has been asserted by many persons that the 20s. bank note was de¬
preciated in its value 2? per cent.-—although if continued to pay all taxes
and discharge all public and private debts j but if we admit such to have
been the fact,it follows as a sequence, that if the fixed price of gold is again
abolished, and its price fall. 25 per cent., the bank note, as a token
of value, and the present sovereign as a coin, would be appreciated 25
per cent, as compared with the value of uncoined gold or bullion.
The Fourth Monetary Era,
Was the act of 1819, or Peel's bill, restoring the fixed price of gold,
to the assumed standard of Elizabeth,—a standard of value only appli¬
cable to natural values, or untaxed commodities,—and the withdrawal of
£l notes by the Bank of England, followed by their abolition in the
country banks in England and Wales in 1829.
The monetary panic in 182.5, that was stopped by the emission for a
temporary period of 2 millions of one-pound old Bank of England notes.
In 1826 gold at 77s. lOJd. the ounce was made the sole standard measure
of value, whilst as the equivalent of silver at 5s. 6d. the ounce, its price should
have been 82s. 8d.,—and we thus adopted our false standard of value,—
and the silver standard being abolished, and the lb. of silver coined into
€6 shillings, they then became tokens of value.
Joint Stock Banks were established, and in 1833 bank notes declared
a legal tender, except at the Bank itself. . '
In 1842 the Bank of England was divided into twosexiayatedeparfn^enta
—the bank of issue and the banking department, and its issue confined to 14^
millions of notes, with such an additional amount as it may bave bullion
in its vaults.
ir
In 1844 an act passed limiting the issue of country bank notes, and
compelling the Scotch and Irish Banks to hold one-third of the amount
of their issue of notes in gold, and prohibiting new banks of private issue
—substituting Bank of England branches in the provinces. •
In 1847, the great monetary panic, relieved by the temporary-sus¬
pension by the Government of the Restriction Act of 1844.
During the past 25 years, bankers* checks, post-office money orders, ai.d
postage stamps, have been adopted, which have superseded the use of coins
and notes to on imngiense extent, with the rreation of 220 millions of rail¬
way securitiea, or credit capital, based cn fixed property, such se¬
curities being available, and sent abroad in discharge of foreign debts.
Suggestions for a Dom estío Currency.
From the enormous increase of the precious metals it seems probable
they may ere long become very uncertain measures of fixed values, and
we are of opinion that the taxation of a country would be an efficient
practical standard of value and price, as taxation is the alstraction of a
given quantity of money representing a given quantity of labor from the
community genera'ly, in discharge of the labor services and the debts in¬
curred by the Government for the products of labor ;—and why should
not taxation therefore express value, as well asa given quantity of the
precious metals, wliose admitted values are the cost of the labor employed
in pioducing them ? '
Thus, assuming the vfàges of an agricultural laborer, based on taxation
priees, in this country ^ Be'9s. djd. a week, or Is. fifd. a day—13
days' labor would give rlfl üná of 20s., or pound of account, and tlw issue
of National Bank Notes of £ 1, and upwards with gold and silver coins as
tokens of value (as our present shillings arc) containing such a fixed weight
and purity of the precious metals as may be agreed upon, the aniount of
which should be regulated by a Government issue department—would
give us an efficient domestic currency, or taxation money not
liable to be sent abroad, and in accordance with Ú>e true principles of
mtney.
The abolition of the fixed price of gold would leave bullion to find its
market price as a commodity ; and if its price fall 25 per cent.,
the present gold coins of this and all other countries would be depreciattd
25 per cent., and become Government tokens of vulue ; and every State
must then resume the ancient privilege of confining to itself the
coinage of the State monies.
All moneys strictly speaking are tiie coins of a State, bearing the im¬
press of the State stamp, which they agree to receive in disci arge of taxes
or custom duties -, and consequently a free coinage from gold bullion depre¬
ciated 25 per cent, in its intrinsic value would be an injustice to the State
for the benefit of private individualsi
IS
Sir Robert Peel's Monetary Law.
Amidst all our monetary fluctuations tlie Standard Measures of Value of
the Elizabethan period still remain the basis of our exchanges—although
they simply represent natural values—whilst our system of indirect
taxation has enhanced our wages and corn (the actual teal and only
standards of value) some 50 per cent, above their natural prices, and
from á false estimate of the relative values of silver and gold, the latter
being lowered instead of raised in price, tiiere has beert ia prdfit on the re-
coinage of our sovereigns into many foreign coins. i, ;
Sir Robert Peel seems not to have duly considered the important fact,
that the sovereign has two attribut es ;—it contains 20s. worth of gold, and
may fluctuate in value as a commodity, and be sent abroad; but asa coin
it can pay only 20s. of taxation however much its value as bullion may be
enhanced.—This oversight has led to the juonetary panics of the last SO years,
which have entailed a loss upon the country greatly exceeding the amount
of our national debt.
Posterity will view with astonishment a minister who assumed he had
taken the tax off bread made (rom British corn, and admitted foreign
corn free of duty,—whilst the burthen of some 30 millions of indirect
taxation on the wages of British labor remain unaltered.
Posterity will view with astonishment, a statesman attempting to
measure artificial values aiising from taxation, by a currency of natural
value ;—that is, the ptoducts of taxed labor by untaxed labor (gold). It
would have been quite as reasonable to have weighéíl the pound of bread by
thehelf pound, orto use the quart and pint as eqtud measures of capacity.
The fttidty of a Statesman persisting for 80 yi at s in imposing upon
the nation a currency lased on natuial values and a fixed price of gold,
with a r ational debt of 800 millions, and a Government annually abstract¬
ing 56 n illions of taxes ;—a local taxation of 14 millions ;—and the
burthen of the cot.densed taxation in our houses, land, ra Iways, &c., &Cè,
enhan. ing the amount of their annual rent 20 millions ; whilst the incidences
of our general taxation w ere a further additional tax of some 8 or 10 million ;
and the n onetary panics of the last 30 years, which panics, on an average
have annually cost the country 40 mill ons. The results are—
Government Annual Taxes...56. Local...14. Inherent taxation
on fixed Propel ties. ..20. Incidences of 'J axation...8. Panics. ..40
T oTAi.— i 38 millions, whilst the available taxation for the cur¬
rent expenditure of the State is only some 26 millions.
1 o the above we might add the eflects of our restricted cur¬
rency, and false standard of value and price, which have pressed
so heavily on our manufacturing interests—but the above ana¬
lysis of taxation will sufficiently indicate that this country is not
in a position to contend against the free admission of foreign pro¬
ducts with onr present currency—a question we shall leave for
the consideration of the public, andthe advocates of Sir Robert
Peel's system of unlimited competition.
N irthwesterw
University 1H
Library
I H the Relative Vulues of Gold, Silver, and Labor.
The fall in the value of silver after the discovery of South
America, indicates the probable results of the recent discoveries
of gold, assuming that all exchangeable values are based on labor.
Thus when it was found that a given quantity of silver, pro¬
duced by a given quantity of labor, was 3 lbs. instead of I lb.,
its value as a commodity, or article of exchange, was reduced
two-thirds ; and as a measure of value its vrice was enhanced
from Is. 8rf. to 5s. 2d. the ounce ;—and the other relative standards
of value, the wages of labor, were equally advanced from 41, to
Is. a day, and wheat from 10s. Sd. to 32s. a quarter.
In applying the same rule to our present gold standard of value,
it will be found that if 3 ounces of gold are now obtained by an
equal quantity of labor as ! ounce previously, its exchangeaye
value will be reduced two-thirds, and its price, as a measure of
labor valuo be depreciated from 77s. lO^d. to 25s. 1 Id. the ounce,
and the relative standards of wages raised from Is. to 3s. a day,
and wheat to 96s. a quarter.
The present standards of gold, and the wages of labor, are
unquestionably based on labor as 12-gd. a day, or 74^ days" labor
for the ounce of gold, as its assumed productive cost in labor ;
but what will our statesmen and bullionists say to their fixed
price of gold, if 20 or even 10 days'labor should ere long pro¬
duce the ounce ? In the latter case the sovereign as bullion would
only be worth 2s. 6d., although as a State coin passing 20s.
If the fixed relation between the silver pound and the gold
pound be abolished, the silver standard will be the only standard ;
and then the 5 dwt. pieces of gold called sovei eigns, will pass,
current for just so much as they are worth (as was the case pre¬
vious to 1728), whether § or 3-3rds,—or 6s. 8d., ISs. 4d. or
20s., unless they are made Government tokens of value for 20s.
The American President says, "the increased quantity of gold
will add greatly to the currency of the world,"—but gold is not
currency until it is coined, and should the Americans continue
to coin unlimited quantities of Eagles, and half and quarter
Eagles, of the present weight and purity, to pass for 20s., such coins
will be tokens of value in that and all other countries, as they will
jiot possess the intrinsic value of 20 days' labor—and- if they find
their way to this country they will be returned to pay the high
custom duties on the admission of our manufactured goods.
It will be found on investigating the nature of trade, that all
exchanges of commodités are the barter of labor for labor, and
the precious.metals themselves must ultimately cpnform.to thjä
universal standard and law of Commerce.
Taxation enhancing the cost of the subsistence of'the laborer 33
per cent, it requires an addition of 50 per cent, to his wages,
that is, 6¿d. a day ; and wheat, the representative of labor, will
equally be enhanced 50 per cent, in price, or 16s. 8d, per qr.—
And our coins as the exponents or measures of value of wages at
Is. 6|d. a day, and wheat at 50s. per qr., should then equally
be enhanced 50 per cent, in their denomination or price, thus
combining the ,two elements of natural and artificial prices, as the
basis of our national currency.
1851 Natural values, wages Is. OJd wheat. .33s. 4d.'... silver...5s. 2d.
Artificial valqes Os 6Jd. 16s. 8d. 2s. 7d.
Is. 6id. SOB. Od. 78. 9d.
2Û
The objects sought to be obtained by the proposed Currency are—
1. To abolish the fixed price of'gold, retaining however the standard of
weight and purity of the sovereign ;—and our silver moneys of stan¬
dard puri'y being coined 33 per cent, below their nominal value, or price
in the ratio of indirect taxation, leaving gold to find its maiket price
in our appreciated silver coins, and bank notes representing the "pound
sterling" or "pound" of account, in our present standard of silver.
2, To provide a national currency not liable be sent abroad, and one in
accordance with taxation prices, and our increased population and trade.
3. To secure the Eank of England, and the employers of labor, against
monetary panics, arising from a drain of the precious metals, by the.
emission of 26 millions of Government notes, redeemable by taxation—
instead of basing our monetary system virtually on the retention of a few
millions of gold (unavailable to a great extent) in the Bank vaults.
4. The Government alone to he responsible for the security of the
notes—and the weekly abstraction of 1 million for the demands of taxa¬
tion will effectually accoin]:lish tlii.s.—The past conrertihihty of the Bank
note into gold on an average of 28 y ears,has entailed an annual loss upon the
country of upwards of 40 millions sterling, arising from periodical panics.
5. To tax the absentee, and foreign fundholder, 2.5 per cent, who at present
do not contribute the taxation required for the protection of their property.
6. To enable the working classes by adequate wages, and a just pref ert nee
for their labor in the British market, to pass to their employers the taxa¬
tion embodied in their necessaries of life, and their employers to rot over
such taxes, as well as their own, ficm the consumers of their prolucts,
by obtaining prices in accordance with the existing taxation.
7. To enable us to purchase wheat and other foreign grain at tlieir natural
prices instead of the artificial prices of this country ; the foreigner
npw having the advantage of our artificial prices, without contributing
to the taxation of the State.
8. Justice to the Fundholder, w ho during the .22 years of the Ecstric-
ticn act, when gold and silver as our measures of value w ere .supt r>i dcd
by bank notes reprt renting taxat on prices, lent his caiiital aiid received
Ills interest.in such notes ; —n ost assuredly «ot.imguinosis orsoveiejgns
which as bullion were then worth ,22s. to 2es; each,—therefore
requires that he should again receive his dividends-in bank hofes repre-t
senting t.vxation prices.
9. That the incidences of taxation price of 3.3 per cent, should be ad.lcd
to the natural values of our silver coins as 5s. 2d. the ounceWraising the
denoiuinaticn otour silver coins to 7s. 6d. the ounce.. ' '
21
General Observations,
That no Bank can possibly issue or keep out more notes than
are required for the community in the district of their usual
circulation—the Bank of England now having 12 millions of
notes unemployed.
The sovereign of natural value cannot express taxation
prices, and when given in exchange for labor taxed 33 per cent,
it is depreciated 6s. 8d. in the pound in its intrinsic value.
The employers recovered such depreciation when they
received prices for their products enhanced 33 per cent, above
their natural values ; say instead of 33s. 4d. a quarter for wheat
they obtained 50s.
That such Corn Laws and Custom duties were the main cause
of keeping up the wages of labor to taxation prices, which enabled
the woraing classes to pass their taxaticn to their employers.
That without such enhanced wages above their natural price
of 6s. a week, no large amount of public revenue could have been
obtained I'rom indirect taxation.
'I'he artificial price of wages of labor being 33 per cent,
above the natural price, or 3s. in excess of 6s. a week, on 5 mil¬
lions of laborers, it gives the sum of 39 millions—which mainly goes
to the public revenue and the profits of traders ; and therefore
the revenue is greatly influenced by the rate of wages.
The. corn lawa that kept out foreign competition when the
prices of wheat were under 50s., or 16s. 8d. a qr. above its natural
price, as compared with the precious metals, were the balancing
power to the 33 per cent, oí taxation on the wages of labor, and
restored the taxation on wages to the producers of corn, neutral¬
ising the effect of our metallic measures of value, which must
succumb to the price of wheat that is a dominent power over
money values, as the price of wheat in times of scarcity rises 20
to 50 per cent, in excess of tie value of the sovereign,
It is not altogether the abundance of money we require but its
quality that should be attended to Our present coins express
only natural values or untaxed products, but what we really re¬
quire are coins that shall express artificial or taxation prices.
The amount of our annual public burthens arising from taxa--
tion and the fixed price of gold, are some 138 millions, of which
only some 26 millions are available for the general current ex¬
penditure of the Government.
As an instance of the effects of our imperfect currencyj or
standard of value, our four sovereigns or pounds sterling will
sell for £s. 6d. more in London than four Sapolebns or French
pounds sterling—a difference of 4^ per cent.—Thus a French
n.iller selling flour in London at 30s. the sack, and tnking home
our gold will realize 1 s. 3d. more per sack than the price ob¬
tained for the flour in this country.
Hemel Hempsted Jan. 7th, 1852, S. SANDARS.
This Edition will be sent Free on the transmission of Twelve Stamps to the
Flinte?, 1.Masen, iierncl Ueu-psted.