SIR ROBERT PEEL’S CURRENCY PLAN;' 
 
 A 
 
 i/' lectur'e ; 
 
 UELIYERUD A1 THE BRITISH COFFEE-HOUSE, IN COCKSFUR-STREET, 
 
 On Thursday the 13th of June, 1844, 
 
 ON THK 
 
 CURRENCY PLAN OF SIR ROBERT PEEL 
 
 SHOWING ITS 
 
 TENDENCY AND PROBABLE EFFECTS. 
 
 BY EDWARD CAPPS, 
 
 AUTHOR OF “the NATION IN A DILEJOIA,” AND “ THE CURRENCY 
 QUESTION IN A NUTSHELL.” 
 
 LONDON: 
 
 SAMUEL CLARKE, 13. PALL MALL EAST; 
 
 R. HASTINGS, 13. CAREY STREET, LINCOLN’S INN; AND 
 . PEI.HAM RICHARDSON, CORNHILL. 
 
 1844. 
 
■a 9 
 
 f 
 
 
 London ; 
 
 Printed by A. Spottiswoode, 
 N ew- Street- Square. 
 
PREFACE. 
 
 The following Lecture was delivered at the instance of 
 several influential gentlemen who were desirous of 
 having the subject of the currency exhibited to the 
 public in a light in which, apparently, it has not been 
 considered by the supporters of the measures now 
 before Parliament. The promoters of the new currency 
 regulations betray not the slightest indication that they 
 are aware of this important truth : namely. That a 
 system of indirect taxation requires a currency quite 
 difibrent in principle from that which may be very 
 proper where direct taxation is alone or principally 
 employed ; and that the new regulations in question, 
 if suitable at all, would only be so provided all 
 duties upon goods were abolished, and the entire 
 revenue raised by Property Taxes. This view of the 
 question appears to have been entirely overlooked, and 
 yet so important is it, that the right perception of it 
 clearly shows Sir Eobert Peel’s currency principles to 
 be both erroneous and defective ; for no currency 
 measure that does not make provision for the operation 
 of our indirect taxation, can be correct in principle 
 or advantageous to the bulk of the community. 
 
 The Author, having been applied to only a few days 
 before the time the Lecture had to be delivered, hopes 
 that the haste with which it was necessarily prepared may 
 be pleaded as an excuse for its defects of composition, 
 or for any slight inaccuracies which may be detected. 
 A request was made immediately after its delivery, that 
 it might - be printed before- the Bank Charter Bill went 
 into Committee. The Author has not, therefore, had 
 that opportunity for revision which he could have 
 wished, and consequently feels it necessary to make this 
 appeal to the indulgence of his readers. 
 
 
 

LEG T'U 'E E. 
 
 Gentlemen, 
 
 Having for a number of years past devoted a considerable 
 portion of my leisure time to the study of the question of the 
 Currency, I have acceded to a request made to me that I would, 
 at this important time, when it is so essential that a right 
 judgment should be come to respecting the monetary measures 
 now before Parliament, give a lecture upon this all important 
 subject. I would not have ventured to come forward to occupy 
 the position I now am placed in, had it not been for a deep and 
 painful conviction that the measures submitted by the Minister 
 to Parliament will, if carried into operation, inflict grievous 
 suffering upon the nation at large, that in principle they are 
 unsound and erroneous, and that in operation they will prove 
 conflscating and destructive. In addition to this, I feel an 
 equally painful conviction, that there is, generally speaking, 
 even among the well educated and upper classes of society, a 
 lamentable want of information upon this important subject; 
 and that it is consequently the especial duty of those who have 
 made it their study to supply as well as they are able this 
 deficiency. As Davenant remarks in his Essays, The pilot to 
 whom the vessel is trusted is not to be disturbed on every 
 light occasion; but if he is apparently running it upon a 
 rock, a private passenger, who is to sink with it, may be per- 
 mitted to give notice of the danger.” 
 
 So far as the Minister, whose measure I am about to impugn 
 is concerned, no apologetic introduction is required. It is in 
 accordance with his own especial request, that his plan should 
 undergo investigation and discussion. His own words are, 
 
 B 
 
2 
 
 I am most anxious the different principles contended for 
 should be thoroughly tested and understood.” Again, ‘‘ I invite 
 discussion,” &c. It will therefore, I hope, be at once felt, that 
 it is not out of any want of due respect either for the position 
 or the talents of the Premier, that the soundness of his currency 
 principles should be called in question, seeing that he himself 
 requests that they may be so called in question, by those who 
 are not satisfied of their correctness. 
 
 Without further introduction, we shall now proceed to con- 
 sider Sir Robert Peel’s new currency measure both with 
 regard to its principles, whether they are correct or whether 
 they are erroneous, and also with reference to its contemplated 
 and probable effects, whether they are likely to be beneficial 
 to the nation or not. 
 
 The object which all legislation on this subject has in view, 
 — the express object that Sir Robert Peel himself professes to 
 accomplish, is the provision and supply of an instrument of ex- 
 change which shall fairly render unto every man that value 
 which is due to him from his fellow man. That in all contracts 
 and engagements which have been entered into, and in all those 
 which hereafter may be entered into, justice shall be done to all 
 parties in the fulfilment of these contracts, as far as the medium 
 for fulfilling them — the money,” — is concerned. And here 
 we are pleased to find that we must also begin where Sir Ro- 
 bert Peel begins, and as the Pound ” is the denomination of 
 value which is used in this country — as men when they agree 
 to receive or to pay a certain value, agree to pay or to receive 
 a given number of pounds. The first principle to be examined 
 is naturally that which was propounded by the Premier, in his 
 answer to the following question put by himself, What is a 
 Pound, and what is the engagement to pay a Pound?” Sir 
 Robert truly remarks, that this is the foundation of the whole 
 subject.” 
 
 Now, Sir Robert Peel explains his principles upon this point, 
 by answering this question in the following manner : — 
 
 “Now, the whole foundation of my measures rests upon the 
 assumption, that, according to practice, according to law, ac- 
 cording to the ancient monetary policy in this country, the 
 meaning of a Pound is neither more nor less than a certain de- 
 finite quantity of gold, with a mark upon it to determine its 
 
3 
 
 weight and fineness, and that the engagement to pay a Pound 
 means nothing, and can mean nothing else than the promise to 
 pay to the holder a definite quantity of the precious metals.” 
 Let us examine this assumption. In the first place we remark, 
 that as we are now discussing this matter for the very purpose 
 of placing our currency upon a correct footing, and establishing 
 it upon sound principles — for the very purpose of correcting 
 what we think has been wrong in former days — it would not at 
 all militate against us, even if we had to admit that Sir Robert 
 Peel is correct in this assumption, that such as he describes it 
 has been hitherto the character of the Pound. It would be 
 quite sufficient for us to say — True, it has been as you say, but 
 this is just what we think so erroneous in the principles of our 
 monetary system, and what we want to see altered. It does 
 not follow because a thing always has been so and so, that it is 
 therefore right. We say that, granting even that Sir Robert 
 was right in this assumption of what a Pound always has 
 been, we might fairly make such an answer as this to Sir 
 Robert Peel, and thereby force on the discussion of the principle 
 of what a Pound ought to be. But is he right in what he 
 assumes ? Is it the fact that a Pound, according to the ancient 
 monetary policy of this country has always been a certain defi- 
 nite quantity of the precious metals ?” We find the very reverse 
 of this to be the case. We suppose that Sir Robert, when he 
 says a pertain definite quantity, means a fixed quantity, not a 
 changing quantity. If so, he is egregiously in error — the Pound 
 having been successively 12 oz., — 10 oz. 13 dwts. — 9 oz.l2 dwts. 
 — 8 oz. — 6 oz. 8 dwts. — 5 oz. 6 dwts. — 4 oz.l 6 dwts. — 2 oz. 10 dwts. 
 — 3 oz. 14 dwts. — 4 oz., and 3 oz. 18 dwts. But Sir Robert, 
 in an after part of his speech, somewhat qualifies this assertion, 
 and confines the invariability of the “ Pound ” to the period 
 which has elapsed since the latter part of the reign of Queen 
 Elizabeth. But in this also Sir Robert Peel is greatly in error, 
 for he does not take into consideration the difference in the 
 value of silver (about 50 per cent.) which ensued from the dis- 
 covery of the American mines. Had he reckoned by gold 
 which still retained its former value, he would have found that 
 the pound,’’ instead of being a certain definite quantity of 
 gold from the time of Elizabeth to the present, was of the fol- 
 lowing variable quantities : — 
 
 B 2 
 
4 
 
 dwts. grs. 
 
 Elizabeth : first gold poundj called the sovereign 7 
 
 Second ditto - - - - 7 4 
 
 James I. : ditto - - - - , - - 6 lOf 
 
 Ditto - - - .. - - 5 204 
 
 Charles I. : ditto - - - - - - 511 
 
 Charles II. : ditto - - - - - - 594 
 
 ditto, made to pass current for 2\s. 5 3 
 
 It is not correct, therefore, as Sir Robert Peel has asserted, 
 that, according to the law, the practice and tlie ancient mone- 
 tary policy of this country, the Pound has been a certain defi- 
 nite quantity of the precious metals. 
 
 But though Sir Robert Peel has made these great mistakes 
 about this matter, yet we are fully aware that it does not follow 
 that because we show, in opposition to Sir Robert Peel, that 
 the Pound has been a variable instead of a fixed and definite 
 quantity of the precious metals, we say we are aware that this 
 does not prove but that the Pound ought to have been a fixed 
 and definite quantity, and ought now to be so. Nor should we 
 have thought of entering into this historical sketch of the 
 Pound, if the Premier had not in some degree made it the 
 ground and basis of his recommendations and resolutions. It 
 is of far more importance that we should ascertain what the 
 Pound ought to be than what the Pound has been ; and we there- 
 fore propose to dismiss without further consideration this his- 
 tory of the Pound, and discuss the following plain proposition, 
 which goes to the root of the whole matter as propounded by 
 Sir R. Peel: — Ought or ought not our money denomination, 
 whatever it may be, whether pound, dollar, shilling, or franc, 
 to be or represent at all times and under all circumstances a 
 certain definite (that is, an ascertained and invariable) quantity 
 of gold or silver ? 
 
 Sir Robert Peel says it ought. We humbly presume to say 
 it ought not, and join issue with him on this point. We say 
 that neither in this nor in any other country ought the money 
 denomination to be or represent under all circumstances a fixed 
 and invariable quantity of gold or of silver. And we beg you 
 to remark, that if we overthrow Sir Robert Peel upon this 
 point, we, upon his own confession, overturn the whole of his 
 
currency scheme, for lie says the whole foundation of his mea- 
 sure rests upon that assumption. 
 
 Now, it appears to us that Sir Robert Peel entirely omits to 
 take into account this most vital truth, namely, that in a country 
 like our own, ichere about eight tenths of the revenue is derived 
 from duties upon commodities, the quantity of any commodity 
 ivhich will fairly he obtainable for any given denomination of 
 money will depend upon the amount of the taxation imposed upon 
 eommodities in general — for as Mr. McCulloch somewhere 
 justly reniarks, “ When taxes are placed upon commodities, their 
 prices must rise in ^ corresponding proportion, otherwise the pro- 
 ducers will not obtain the ordinary rate of profit.” — Now, it is 
 clear that if, through taxation, prices of commodities are to rise 
 or become larger in money, a synaller quantity of any commodity 
 will be obtainable for any given sum of money. 
 
 If, for instance, any particular commodity has risen from I5. 
 to \s. Qd. per pound, it is clear that I5. Qd. will only obtain 
 1 pound of that commodity, whereas it formerly commanded 
 
 pound. The very operation of raising the prices of com- 
 modities necessitates the fact that less of commodities shall be 
 ■obtained for money. Now, the metals gold and silver are com- 
 modities and are naturally as subject to this law as any other 
 commodities are, yet Sir Robert Peel says that an invariable 
 quantity of these commodities shall be obtainable for the Pound, 
 however high taxation may raise the prices of other goods. But 
 can Sir Robert Peel or any other man bring forward the slight- 
 est shadow of a reason to show us why, if the Pound is to pass 
 in exchange for less corn, less cloth, less meat, less iron, less 
 lead, less cotton, &c. because all commodities here are raised in 
 price by the general taxation of the country, we say, can any 
 one tell us why less of these other two commodities, gold and 
 silver, shall not also be obtainable for the pound by the opera- 
 tion of the same cause ? Are not gold and silver produced, and 
 their value formed by the same agent which produces all other 
 things. Labour ? Is not the value of gold and silver constituted 
 by the same law that constitutes the value of all other com- 
 modities, namely, the amount of labour embodied in their 
 production, and is the price of every thing to be affected by 
 taxation, except gold and silver ? Is it intended that taxed 
 corn, and taxed cloth, and taxed iron shall be expected to 
 
 B 3 
 
6 
 
 exchange against untaxed gold and silver without the producers 
 of the corn and the cloth and the iron, suffering from such an 
 unequal competition? And it must be so, if the pound is always 
 to be an invariable quantity of gold or silver, for if gold and 
 silver be thus held down and prevented from rising in your 
 medium of exchange, whatever that medium of exchange may 
 be, while all other commodities of equal value do rise in that 
 medium of exchange, that arrangement effectually prevents the 
 gold and the silver from bearing the same weight of taxation, 
 which other commodities of equal intrinsic value do, and effec- 
 tually untaxes them compared with other commodities. — And 
 this is the case with our present currency. 
 
 Gold is always held down to one fixed price, because it can- 
 not be otherwise in such a currency as we have now. We 
 coin pieces of gold bullion of a certain definite weight and fine- 
 ness, and put a fixed denomination or price upon them which 
 never alters. For instance, we coin our present sovereigns of 
 the weight of 5 dwts. 3 grs. of gold ; and these 5 dwts. 3 grs. 
 of gold are called, and always pass in account for, one pound,” 
 or twenty shillings.” It is evident, therefore, that gold can- 
 not rise ; because 5 dwts. 3 grs. of gold are always current at 
 one pound,” or twenty shillings ; ” yet, such is the absurdity 
 of our system, that equal values to these 5 dwts. 3 grs. of gold 
 in other commodities are exchanging at the same time for thirty 
 shillings — causing a distortion in the relative prices of things 
 of equal value, which distortion leads, as we shall hereafter 
 show, to the greatest losses, both on the part of the productive 
 classes and the nation at large. We do not dispute the con- 
 venience of coining gold or silver into certain sized pieces or 
 weights, and also of a certain purity; but we do dispute the 
 policy and the justice of their always passing current for a fixed 
 denomination of money. 
 
 The following extract from Locke will just express our sen- 
 timents, though at the same time we think it right to say, that 
 we believe Locke applied it to gold only, and as a commodity, 
 while we would apply it either to gold or silver money. Locke 
 says : It is necessary your gold should be coined, and have 
 
 the king’s stamp upon 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 a fixed value set upon it by public autho- 
 
7 
 
 rity.” This extract from Locke contains, according to our 
 view, the whole philosophy of the case ; for though pieces of 
 gold like our sovereigns might very properly circulate authen- 
 ticated by having the king’s stamp upon them, yet if indirect 
 taxation has raised the price of all other commodities beyond 
 the natural price, these pieces of gold ought to rise in price 
 also in the same proportion; and in order that this may be 
 effected, another vehicle or medium of exchange must be adopted 
 to form the legal tender or money of the country instead of 
 gold ; one, which possessing no intrinsic value itself as a com- 
 modity, will allow gold to rise or fall in it according to the 
 weight of taxation imposed upon the country, just the same as 
 other commodities of equal natural value do. 
 
 We think, from these few remarks, it will be evident that 
 where goods are raised in price by duties laid upon them, and 
 where, consequently, a smaller quantity of any commodity is 
 necessarily obtainable for any given sum of money, there, for 
 the same reason, less gold and silver should also be obtainable for 
 money ; and, if so, then Sir Robert Peel’s fundamental prin- 
 ciple that the Pound ” should always be a certain definite 
 quantity of the precious metals is clearly unsound ; as the quan- 
 tity of these which the “ Pound ” ought to command will depend 
 upon the degree in which taxation enhances the price of gold 
 and silver as well as all other commodities. 
 
 But the question will no doubt again be urged : What then 
 is the pound to be, if it be not a certain definite quantity of 
 gold or silver ? 
 
 We answer, let it be what Sir Robert Peel himself shews 
 it should be, by another branch of his legislative arrangements. 
 His legislation, with regard to the price of corn, the great 
 staple food of this country, and, therefore, the truest and most 
 natural " Standard of Value.” Sir Robert Peel has shewn 
 most eloquently and most forcibly in his various speeches upon 
 corn and corn laws, that such are the expenses which pro- 
 ducers have to sustain in this country, that the fair price of 
 corn here, a price which will only just enable the farmer to live, 
 is upon the average at least 56 s. a quarter, or 7 s. a bushel. 
 Now, from this starting point, we shall proceed to prove that 
 Sir Robert Peel himself disproves his own currency doctrines by 
 his doctrines upon corn, and in doing this we shall have to refer 
 
 B 4 
 
8 
 
 to axioms of political economy admitted on all liands^ and to 
 facts which are within the reach of every one who chooses to 
 investigate the subject. 
 
 1. The natural value of all articles, according to the econo- 
 mists, is the quantity of labour necessary for their produc- 
 tion ; those articles, therefore, are of equal value which require 
 for their production equal quantities of labour. 
 
 2 . According to the best authorities, and from experience, 
 it is found that on an average of all countries, and on an average 
 of seasons, it requires the same amount of labour to produce 
 one quarter of wheat as it does to produce 8 ^ dwts. of gold. 
 This proportion is found by observing the quantity of gold 
 for which wheat exchanges in the public markets on an average 
 of countries and seasons. 
 
 The respective quantities of these productions therefore are 
 natural equivalents of each other — 1 quarter of wheat, and 
 8 ^ dwts. of gold. And as they are thus each of the same value 
 as the other, they ought in any currency to be of the same 
 price, — for the express object of a currency is to exchange 
 equal values fairly and upon equal terms. Whatever price then 
 is required to remunerate the farmer, upon an average of years, 
 for producing a quarter of wheat, is the price, the proper price 
 or equivalent of 8 J dwts. of gold. Now Sir Robert Peel says, 
 in his corn law legislation, that this price for the quarter of 
 wheat is 56s. , he therefore himself determines what gold ought 
 now to be an ounce; and what amount of gold the Pound,” 
 our denomination of money ought to be. 56 shillings, says 
 Sir Robert, is the proper price for a quarter of wheat in Eng- 
 land. Very well: then in that case 56s. is the proper price for 
 8 J dwts. of gold, also because 8 J dwts of gold and 1 qr. of 
 wheat are natural equivalents. And if 5 65 . be the proper price 
 for 8 J dwts'. of gold, then the proper price for an ounce must 
 be 61. II 5 . 9d. instead of SI. 17 s. \0\d., the price which Sir R. 
 Peel, by his monetary measures, is endeavouring to perpetuate. 
 Sir Robert Peel himself thus proves beyond the possibility of 
 dispute, that those persons are correct in their judgment who 
 condemn the present standard. 
 
 In like manner may be deduced from Sir R. Peel’s corn 
 legislation what the “ Pound ” in England ought to be, or be 
 convertible into — reckonina; either in gold or in wheat. For 
 
9 
 
 if both 8 J clwts. of gold and one quarter of wheat are to l^e 
 represented by 5Q>s,, then as the Pound is twenty shillings, it will 
 of course follow that the Pound will represent that proportionate 
 quantity of 8| dwts. of gold and of one quarter of wheat, as 
 20 to 56 expresses. In gold, if 56.9. be 8J dwts, 205. will be 
 3 dwts. 4 grs., instead of 5 dwts. 3 grs. which is Sir R. Peel’s 
 currency pound; and in wheat, if 565. represent one quarter, 
 20s. will represent not quite 3 bushels. 
 
 But not only does Sir Robert Peel by his corn law legisla- 
 tion inform us what the Pound ought to be at present, but he 
 also admits that the Pound ought (in opposition to what he 
 asserts by his currency legislation) to be a variable instead of an 
 invariable quantity of gold ; forsuppose from any circumstances, 
 — say another continental war, — that taxation should be so in- 
 creased in this country, and the expense of every production be so 
 enhanced, that 56s. per quarter for wheat would no longer be a 
 price that would give a living to the farmer. Sir Robert Peel 
 would be obliged, by his present corn law principles, to admit 
 that wheat might possibly require to be sold for 765 . instead of 
 56s., just the same as he now maintains it ought to fetch 565. 
 instead of 365., which w^as the price 100 years ago, before we 
 had our present amount of taxation. In the case contemplated, 
 if wheat were 7 65. a quarter, 8J dwts. of gold would also be 
 765., provided these two commodities were allowed to maintain 
 their natural equality with each other. But if seventy-six 
 shillings were 8J dwts. of gold, what would twenty shillings or 
 the Pound ” be ? why just 2 dwts. 6 grains of gold. But the 
 Pound is now 5 dwts. 3 grs. of gold, and Sir Robert Peel says 
 that the whole foundation of his measure rests upon the assump- 
 tion that a Pound has been and ought to be, a certain definite, 
 that is, as I understand him, an invariable quantity of gold or 
 silver. Sir Robert Peel therefore clearly contradicts himself, 
 and his currency opinions are manifestly disproved by his opinions 
 respecting the proper price for corn, both under the present bur- 
 dened circumstances of the country, and with respect to what that 
 price might, upon the same principle, require to be, if the country 
 had an increase of burdens. From what we have already ad- 
 vanced upon the natural relative values of gold and wheat, let 
 the agricultural interest seriously ponder upon the consequence 
 of submissively deferring to Sir R. Peel’s dogma of the invari- 
 
10 
 
 ability of the “ Pound ” — that dogma, if carried out, will ruin 
 them beyond redemption, as we will explain. 
 
 We said just now that one quarter of wheat and 8 J dwts. of 
 gold were natural equivalents of each other, being both of the 
 same natural value in labour. Now, if Sir R. Peel is allowed 
 to carry out his currency scheme, one of these two articles, the 
 dwts. of gold will never be higher than 335. 2c?., — for, as 
 the pound or twenty shillings is to be invariably 5 dwts. 3 grains 
 of gold, it gives a price of 335. 2d. for 8 J dwts. You see, there- 
 fore, that Sir R. Peel’s plan permanently prices one of these two 
 natural equivalents, the 8 J dwts. of gold, at 335. 2d . ; and do 
 you not think that forcing one of these two equal values to be 
 constantly current at 335. 2d. has a tendency to bring down the 
 other, the wheat, to the same price ? — we say has a ten- 
 dency to bring it down — because the corn laws and the 
 expense of importation in some degree protect wheat at present 
 from the operation of this depressing standard. Still the ten- 
 dency is the same, and you will find it operate when, from 
 a good and abundant harvest, this tendency is not counter- 
 acted. We beg you to reflect upon this point most seri- 
 ously ; for, if 5 dwts. 3 grains of gold, the quantity contained 
 in our present sovereigns, ought never to be at a higher price 
 than 205., then, upon the same principle, ought wheat never to 
 be higher than 335. 2d. a quarter, that being as high a price for 
 a quarter of wheat as 205. is for 5 dwts. 3 grains of gold. But 
 Sir Robert Peel justly scouts the idea of selling wheat at 33s. 2d. 
 a quarter in this country, and legislates for 565. Why, then, 
 does he set up this competition of untaxed gold against taxed 
 wheat and other commodities, which would, if it were not for 
 the interposition of the corn laws, speedily bring down wheat to 
 the level of gold ? And why does he contend that a certain 
 denomination of money — the Pound,” shall always command a 
 certain definite quantity of labour, if that labour is embodied in 
 gold, when he acknowledges that it ought not always to com- 
 mand that same definite quantity of labour if embodied in wheat 
 or other commodities ? 
 
 And here let us remark that Sir Robert Peel avails himself of 
 the want of acquaintance with this subject on the part of the 
 Members of the House, and takes an unworthy advantage of 
 the express and acknowledged opinions of his opponents. The 
 Right Honourable Baronet says, somewhat tauntingly. Define 
 
11 
 
 your Pound — state shortly, and not in a long pamphlet, what 
 your Pound is. Let us have a definition. Now, it is clear to 
 all who have attended to what we have already advanced, that 
 the very opinion which Sir Robert’s opponents entertain, — 
 namely, that the Pound ought not at all times to be or represent 
 a certain definite quantity of gold or silver, prevents them from 
 giving a precise definition ; for how can they give a fixed defini- 
 tion of what is, in their opinion, a variable thing ? We could 
 as easily pose Sir Robert Peel himself by asking him to define 
 the length of a column of mercury in the thermometer. He 
 would of course reply that he could not define what the exact 
 length was at all times, but that he could just say that it was a 
 column of mercury depending for its length upon the tempera- 
 ture of the surrounding atmosphere. And so say we of the 
 Pound ; that it is a quantity of gold or silver, if you choose to 
 have gold or silver, depending for its amount upon the degree of 
 taxation imposed upon commodities in general. Let the tem- 
 perature of the atmosphere become colder, and the column of 
 mercury will become shorter. Let taxation become heavier, 
 and the quantity of gold arid of all other commodities for which 
 your “Pound” ought to exchange will become smaller. Is it 
 not surprising that Sir Robert Peel does not see that, as the 
 effect of all taxation on commodities is to lessen the quantity of 
 commodities which shall be obtainable for money, the money, to 
 be a true representative and reflex of the commodities, must 
 lessen in intrinsic value in precisely the same proportion as the 
 things do which it has to represent ? 
 
 We come now to the second question which Sir Robert Peel 
 has asked of his opponents with an air of great triumph, evi- 
 dently deeming it unanswerable, except upon his own prin- 
 ciples. What can be the meaning of an engagement to pay a 
 Pound, if the Pound be not a definite quantity of gold or of 
 silver ? 
 
 In replying to this question, we beg you still to bear in mind, 
 that we want no alteration of the present Pound, if there be no 
 taxation imposed on commodities. Repeal all indirect taxation, 
 and collect the whole revenue by a tax on realised property, and 
 the Pound may remain just what it is, for as no commodity 
 would in that case be taxed, the gold in the Pound would not 
 need to be taxed. We have no objection to an untaxed Voxmdi 
 
12 
 
 being a definite quantity of gold or of silver as Sir E.. Peel 
 desires ; and as such untaxed pound has been for a long time 
 past and still is 5 dwts. 3 grs. of gold, we can have no pos- 
 sible objection to its still remaining so. But what we object to 
 is, that the untaxed Pound should be the pound of account, 
 and the legal tender pound in a community where commodities 
 are all taxed, because the quantity of gold in it being Invariable, 
 it cannot be a fair representative of that diminished value due 
 from one person to another, which arises from the Government 
 having already forestalled part of the value in taxation upon 
 goods. 
 
 In reply, therefore, to this question of Sir E. Peel’s, we say, 
 first, that as the untaxed Pound is 5 dwts. 3 grs. of gold, an 
 engagement to pay a Pound if none of our commodities are 
 taxed, is an engagement to pay 5 dwts. 3 grs. of gold ; but that 
 if commodities are taxed, and thereby raised in price, less gold 
 as well as less of every other commodity, must necessarily be 
 obtainable for the Pound, and that an engagement in that case 
 to pay a Pound will be an engagement to pay as much less than 
 5 dwts. 3 grs. of gold, as taxation raises the price of gold. Or, 
 in other words, an engagement to pay a Pound will be an 
 engagement to pay that quantity of gold which 205. in a Go- 
 vernment paper currency will purchase, gold being- allowed to 
 rise in price like all other commodities. 
 
 But says a creditor to a debtor, “ if gold were to rise in 
 price in this way, I might probably be only able to purchase 
 4 dwts. of gold for every pound, which you would pay me in- 
 stead of 5 dwts. 3 grs. True, the debtor may answer, but how 
 are you harmed by that ? Do you not now, even with your 
 present Pound, purchase also less wheat, and less cloth, and less 
 iron, from the same cause ? namely, the higher prices at which 
 all these commodities are obliged to be sold in consequence of 
 Government choosing to lay the taxes on the people by means 
 of taxing the commodities which they purchase, thereby giving 
 to every one a smaller quantity of these commodities for their 
 money? You surely cannot expect as much wheat, and as 
 much gold, and as much cloth, and as much iron for your 
 money, as though there were no taxes on them. 
 
 The truth is, that Government by this indirect taxation, 
 lessens the value of every payment, because it abstracts part of 
 
13 
 
 the payment beforehand from the Payer for the service of the 
 State. 
 
 It produces the same result indirectly by raising tlie prices of 
 commodities as the income-tax does directly by taking seven- 
 pence in the pound away from you. F or instance : I am the 
 proprietor of some house property, and I go to a tenant — say 
 for lOOZ. — being a half year’s rent due to me. Instead of his 
 paying me lOOZ. he pays me 100 times 195. 5d . ; and if I ask 
 him why he does not pay me the full rent agreed upon — why 
 he pays me 195. 6d. instead of a pound, he tells me he has 
 already advanced Id. in the pound for me to the Government in 
 discharge of the income-tax, and that I am not entitled to a 
 pound of full size, but a pound short the 7rZ. he has paid in tax- 
 ation. 
 
 Now suppose the income-tax, instead of being Id. in the 
 pound, were 45 . in the pound, my tenant would, of course, only 
 pay me 1 65 . for every pound of rent, and in that case instead of 
 my obtaining 5 dwts. of gold for every pound of rent, as at first 
 agreed upon, I should obtain only 4 dwts. But is not this pre- 
 cisely the same result as is brought about by the process of in- 
 direct taxation when gold is allowed to rise in price in proportion 
 with everything else ? The creditor said just now to his debtor 
 that if gold were to rise, he might possibly get only 4 dwts. of 
 gold for his pound ; but we see that the same result woidd be 
 produced if all indirect taxation were repealed, and an income 
 or property-tax substituted for it to-morrow. If 1 dwt. of gold, 
 or 4s. in the pound, have to be abstracted from every body in 
 some way or other, it matters very little whether they lose this 
 amount in a direct manner, through an income-tax which takes 
 at once 1 dwt. of gold or 45 . from every pound of rent, &c., or 
 whether they lose it in an indirect manner, by all commodities, 
 gold among the rest, so rising in price, through taxation, that 
 they shall be able to purchase only 4 dwts. of gold .for the cur- 
 rent pound, instead of 5. It comes to the same thing. Every 
 person is mulcted of 1 dwt. of gold out of every 5, because the 
 Government has abstracted it for the service of the State. 
 
 But let us ask Sir Bobert Peel and those who agree with 
 him, what benefit can possibly arise to any person from receiving 
 a Pound containing 5 dwts. of gold, instead of one representing, 
 perhaps, 4 dwts., if, after all, the 5 dwts. are made to pass in 
 
14 
 
 exchange only for the same quantity of commodities as the 4 
 dwts. would have exchanged for? 
 
 The practical value of any currency is the amount of goods 
 which it will purchase, and if we are honestly to let goods rise 
 in price according to taxation and according to Sir R. Peel’s 
 Corn-Law legislation, and I have to part with three pounds for 
 a quarter of wheat instead of tioo pounds, it is of no earthly 
 benefit to me that the three pounds with which I purchased the 
 wheat contained each 5 dwts. of gold instead of 4 dwts. If 
 three pounds of 4 dwts. each would equally have purchased me 
 a quarter of wheat, I derive no advantage from the pounds 
 having contained an additional dwt. of gold. The goodness of 
 the pounds to me did not depend upon what gold they con- 
 tained, but upon what quantity of commodities they would 
 realise for me. Thus, Dr. Adam Smith says, the revenue of 
 a person to whom a guinea is paid, does not so much consist in 
 the piece of gold as in what he can get for it, or in what he can 
 exchange it for. If it would exchange for nothing, it would, 
 like a bill upon a bankrupt, be of no more use than the most 
 useless piece of paper. It is, after all, therefore, very great 
 folly to put more gold into the Pound than is necessary to pur- 
 chase the goods at the price at which they ought to be sold, and 
 is of no benefit to the receiver of the Pound, while to the 
 country which has to provide the extra quantity, it is a very 
 great evil. 
 
 I beg you, however, to remark, that I only affirm that it is when 
 commodities are fairly allowed to rise to the price which taxation 
 requires, that a Pound which contains only just that quantity of 
 gold, which is the natural equivalent of the commodities, is as 
 good to the possessor of it as though it contained half as much 
 more gold. I know that if you use the gold pound, not as 
 “ Money ” that is a token or sign to produce you the quantity of 
 commodities to which you are faikly entitled considering 
 the taxation of the country, but, as a commodity to fetch as 
 much of another commodity as is equal to its own intrinsic 
 worth, then the value of your Pound will certainly depend upon 
 the quantity of gold it contains. But if this is allowed, you 
 frustrate the just principle, that as taxation increases, less com- 
 modities shall be obtainable for money ; for the Pound being 
 made invariable, its possessor will obtain an invariable quan- 
 
15 
 
 tity of commodities for it, however taxation may render it ne- 
 cessary that he should receive less. If this is what Sir Robert 
 Peel means by making the Pound invariably of a definite weight 
 of gold, it is evidently a measure which will have the effect 
 (whether intentionally or not, I cannot take upon me to say) of 
 throwing all the burden of indirect taxation upon the produc- 
 tive classes, for they will have to part with as many commo- 
 dities to obtain money from the possessors of money, as though 
 they had not already parted with a portion of those commodities 
 to Government in taxes — which taxes were to be borne eventu- 
 ally by the consumers of the goods by their being only able to 
 obtain a less quantity of goods for their money. 
 
 Having now answered Sir Robert Peel’s question, What is 
 a Pound, and what is the engagement to pay a Pound, if it be 
 not an engagement to pay a certain definite quantity of gold or 
 silver ? ” Having shewn that if direct taxation alone prevails, 
 and no commodities are taxed, the untaxed Pound may be, as it 
 is now, 5 dwts. 3 grs. of gold ; but that if indirect taxation is 
 employed for raising the revenue, the Pound cannot in justice 
 be that fixed quantity of the precious metals, but a less quan- 
 tity in proportion to the taxation borne by commodities. 
 Having likewise shewn that Sir Robert Peel himself, when 
 legislating upon corn, by fixing wheat at 56s. per quarter, ac- 
 tually determines what that quantity of gold is at the present 
 moment, and that his own principles of corn legislation show 
 that that quantity of gold for the Pound may become either 
 more or less as taxation alters and the prices of goods in con- 
 sequence fall or rise. Having shewn that a currency esta- 
 blished upon these principles would operate to produce precisely 
 the same results as Sir R. Peel’s own income-tax does, namely, 
 by taking so much in the Pound away from every man who 
 possesses Pounds, but doing it through lessening their pur- 
 chasing power, rather than by taking away a certain number of 
 these Pounds from their owners. Having shewn, that if prices 
 are justly permitted to rise, a Pound of 5 dwts. of gold is no 
 better or more valuable to its possessor than one of 4 dwts., 
 and that it can only become more valuable by its being used as 
 an instrument unjustly to deprive the productive classes, both 
 agricultural and trading, of a fair price for their products. We 
 say that having shewn these things, and met Sir Robert 'with a 
 
16 
 
 fair and straight-forward reply, we will now turn questioner, 
 and ask Sir Kobert Peel how, concurrently with the circulation 
 of such a pound as he talks of, a Pound that is invariably to be 
 5 dwts. 3 grs. of gold, he can carry out that acknowledged 
 maxim of economical science which we have already quoted 
 from Mr. M^'Culloch, viz., “ When taxes are laid upon commo- 
 dities, their prices must necessarily rise in a corresponding pro- 
 portion, otherwise the producers will not obtain the ordinary 
 rate of profit. ” We will also ask how the taxes are to be made 
 to fall upon people, according to their property, if notwith- 
 standing any increase of taxation the Pounds they receive in 
 their income are to experience no diminution in their power of 
 commanding commodities ? 
 
 First, how are goods to rise in price in proportion to the 
 taxes on them ? 
 
 It is evident that with such a currency as Sir Kobert Peel 
 proposes, where the Pound is invariably 5 dwts. 3 grs. of gold, 
 any increase of price must be a larger quantity of gold. If the 
 Pound of 205. be 5 dwts. of gold, 305. must be 7-g dwts. Now, 
 suppose, for the sake of argument, that a commodity which is 
 naturally worth 5 dwts. of gold, or 205., should require to be 
 sold for 305., in consequence of the additional charges caused by 
 taxation, how, we ask, is 305., which would be 7^ dwts. of 
 gold, to be obtained of the foreigner for the article, if it be only 
 intrinsically worth 5 dwts? No ordinance of government can 
 ever make thing-s exchange in a free market for more of the 
 commodity gold or the commodity silver than they are intrin- 
 sically worth. Government may choose to put a tax of 6s., 
 IO 5 ., or 155. upon any article beyond its intrinsic value ; but 
 it cannot make the foreigner give the 6s., IO 5 ., or 155. more 
 for the article, if that be so much beyond its intrinsic value, 
 nor can it even make the home consumer pay it, if he have free 
 access to a cheaper foreign market. By requiring an increased 
 quantity of gold for goods, whenever it suits either the caprice 
 or necessities of rulers io increase taxation upon goods, it would 
 seem to be inferred that governments had the power of making 
 goods exchange for any quantity of gold that they thought proper. 
 This is all a mistake. The higgling and bargaining of the 
 markets, as Dr. Adam Smith remarks, will bring all things 
 down to ’their proper relative positions and values with reference 
 
17 
 
 to each other, according to the amount of labour embodied in 
 their production. You will not be able to get more gold for any 
 goods than will be equivalent to the amount of labour in them, 
 whatever taxes you may put upon them, or however you may 
 enhance the cost of their production by repeated duties upon 
 every thing used in the process of their production. 
 
 In such a currency, therefore, as Sir Robert Peel advocates, 
 it will be utterly impossible to get that additional and higher 
 price which taxation renders necessary, unless we shut out all 
 foreign intercourse ; and it is to the inability to get this higher 
 and compensating price which renders business so unremunerating 
 at the present time to those engaged in it, and the wages of 
 labourers so incapable of furnishing them with a fair share of 
 the productions of the country. If the higher prices which 
 indirect taxation renders necessary, are to be secured to the 
 producers, who in the first instance advance the taxes, a cur- 
 rency system must be established upon a totally different prin- 
 ciple to Sir Robert Peel’s currency scheme. It is useless to 
 look for higher prices, if these higher prices are to be realised 
 in a gold currency ; for the laws of nature and commerce forbid 
 such prices to be realised. If the taxes are to be repaid to 
 producers, it must not be in the way of a higher gold price for 
 their goods, but by giving them a currency which will enable 
 them to charge the tax without increasing the gold price of the 
 goods. This would be effected by adopting a government cur- 
 rency, in which gold and silver being allowed to rise in it as 
 well as other things, any higher price that might be found 
 necessary might be obtained without difficulty by the produc- 
 tive classes, and without interfering with our foreign trade. 
 Such a currency even might be established by the simple prin- 
 ciple of making the Bank of England take up its notes in gold 
 at the market price, instead of one fixed unvarying price of 
 3Z. 175. lOJof. per ounce. But such a currency would be quite 
 at variance with the principle of the Pound being always an 
 invariable quantity of gold or silver; for these commodities 
 would fetch their fair value in the market in this currency, ac- 
 cording to the real relative worth of them as compared with 
 other commodities. 
 
 But an objection arises here in the minds of some persons 
 which, though it has no real foundation, is so very specious and 
 
 C 
 
18 
 
 plausible, that we find some of the first practieal men in the 
 country misled by it. “ What,” say they, “ is the use of a 
 higher nominal price to the producers of any goods, if, after all, 
 the apparently higher price is not really a higher price, because 
 it is only a higher price in a less valuable currency ? ” What 
 good,” say they, is a greater number of pounds or shillings, if 
 at the same time you only obtain for the greater number the 
 same quantity of gold or silver as you did for the lesser number* 
 You might as well expect to be bettered in your circumstances 
 by receiving 40 sixpences instead of 20 shillings. 
 
 Now, the persons who reason thus are misled by the following 
 deplorable fallacy, which is plainly embodied in this argument, 
 namely, that producers are remunerated for their goods in precise 
 proportion only to the particular quantity of gold or silver 
 which they obtain for them, without taking any thing further 
 into the account. But this is not the case, and this is where 
 their whole error lies, for producers are remunerated, not in 
 proportion to the mere quantity they receive, but in proportion 
 to the quantity they receive compared with the quantity the goods 
 have cost them. Now in the currency we have been alluding to, 
 people would receive a greater number of Pounds, and though 
 these contain in the aggregate no more gold or silver, yet these 
 same pounds are paid away as Pounds in discharge of rents, 
 taxes, &c. Producers, therefore, while they receive as much 
 gold and silver as before, pay away less in their costs and ex- 
 penses, and have consequently more left to themselves on the 
 balance. The fact is the tax is deducted from the Pound itself 
 and the loss occasioned by the tax falls, as we have shewn before, 
 on the ultimate recipients of the Pounds ; on those, who after 
 squaring accounts with every body, after paying all the Pounds 
 they owe, and receiving all the Pounds owing to them, have a 
 surplus number of pounds left to them on the balance. This 
 surplus is what constitutes them men of property, in proportion 
 to its amount, and the loss on each of the pounds which form 
 the surplus, acts as we have before shewn as a most perfect 
 property-tax. 
 
 But it may still, perhaps, be urged — but if the expenses of 
 producers rise in the same proportion as their receipts through 
 the general advance of prices, how do they benefit ? ” We 
 answer, why no, it is true they would not benefit if these 
 
19 
 
 expenses did rise in tRe same proportion. A large portion of 
 these expenses however do not rise with a general rise of prices, 
 such as rents, taxes, rates, assessments, &c., and producers 
 benefit by these expenses becoming lighter. And if it were pos- 
 sible to make these rise, a currency which allowed gold and 
 silver to rise with other things would allow of counter charges 
 on the part of the productive classes for their goods sufficient to 
 reimburse them. 
 
 We have thought it absolutely necessary to go closely into 
 this argument, because we find, lamentable as is the fact, that 
 the well-being of the country has been sacrificed to hasty and 
 superficial views of the theory of this question, which have been 
 entertained by men who, from their position, have been looked 
 up to as undoubted authorities in these matters. Will it be be- 
 lieved that this erroneous and superficial view of the subject 
 which I have just been exposing is the view which has not only 
 been entertained but acted upon by our greatest practical men : 
 men, to opposewhose opinion would have been looked upon as 
 the height of folly and presumption, yet men who have over- 
 looked the simple principle that the productive classes could be 
 as well relieved from that taxation which did not belong to 
 them, by deducting the tax from all the payments they had to 
 make, as they could be by adding the tax to their receipts? 
 We can hardly think this would be believed, did we not know, 
 from all history, what fatal and gross errors may be committed 
 in the application of every branch of human knowledge, if 
 erroneous or even imperfect principles be acted upon. To shew 
 you what class of men — what order of statesmen have been 
 acting upon these imperfect views of the currency, I will re- 
 late an anecdote, the circumstances of which came under my 
 own personal observation. — A distant relative of my own, 
 residing in the country, and being the rector of the parish, is 
 on visiting terms with an important member of the present 
 Government, a gentleman who sustains an office that renders 
 some knowledge upon these questions almost necessary. A few 
 years ago my relative put a little work on the currency, distin- 
 guished for its simplicity, into this gentleman’s hands, and 
 shortly afterwards asked him what he thought of it. The re- 
 ply was, “ Why the fact is, I don’t know much about the sub- 
 ject ; we, in Parliament, leave all these matters in the hands of 
 
 C 2 
 
20 
 
 Bnring and Peel.” You see, therefore, that it was thought al- 
 most impossible for Baring and Peel to be wrong, and you per- 
 ceive, likewise, that if such men as Mr. Baring and Sir Robert 
 Peel did happen to entertain a fallacy, which, by the bye, is 
 
 very easy on such a subject as the currency, it is a hundred to 
 
 one but the fallacy is acted upon, and the prosperity of the 
 country impaired in consequence. Now, would it be thought 
 that Mr. Baring himself, one of the two great authorities 
 
 to whom is confided the conduct of all such questions, is 
 
 one who has been misled by the plain and palpable fallacy I 
 have been just describing ? It is, however, the case ; for here is 
 a report of what Mr. Baring said on the debate respecting the 
 agricultural distress in 1834 : — 
 
 He undoubtedly concurred with the Hon. Member for Yorkshire (Mr. 
 Cayley) in thinking that the distress of the farmers arose from insufficient 
 prices, but he did not see how any diminution in the value of the coin 
 could better the farmer’s condition. It made no difference whether he sold 
 his wheat at 40^. per quarter or for 80^., if in the latter case the value of 
 the shilling was reduced one half. He had heard several farmers attribute 
 their difficulties to the alteration of the Winchester bushel, and he really 
 thought that their notion was not more absurd than the idea that a depre- 
 ciation in the value of the currency was calculated to benefit the agricul- 
 tural interest. The distress of the farmer arose from lowness of prices ; 
 and that was occasioned by the great supply of corn from Ireland, where 
 labour was cheaper, and where poor-rates and other charges did not press 
 so heavily as on the farmers of England.” — Times. 
 
 To this, Mr. Taylor, in his Catechism of the Currency,” 
 p. 66., most truly replies; — 
 
 When Mr. Baring, who is so great an authority on the subject of the 
 currency, declares that he cannot see how the farmer is to he benefited by 
 receiving 80.?. instead of 40?. per quarter for his corn, if the 80?. are to be 
 of equal value with the 40?. in the precious metals, we ought not to wonder 
 at the want of knowledge displayed by other people. A plain farmer, how- 
 ever, might have told Mr. Baring that it makes a most material difference 
 to him v/hether he has to pay his rent and taxes and all other outgoings 
 out of 80?. or out of 40?. per quarter. He might add, that this difference 
 is no boon to him, for that he is fairly entitled to 80?. if the taxes have 
 doubled the cost of the production of corn, as it is clear they have ; and 
 that he now gains no more by the 80?. than he formerly did by the 40?., 
 when the taxes were in proportion. He might further inform Mr. Baring 
 that our merchants would be enabled, without any disadvantage, to carry 
 on all branches of foreign trade by means of that very conversion of 80?. 
 paper into 40?. metallic currency, which seems to him so absurd a measure ; 
 and that, in fact, it is a provision which would benefit the tradesman and 
 manufacturer, quite as much as the agriculturist. I am not surprised at 
 the low opinion Mr. Baring entertains of the capacity of farmers, if he has 
 among his tejiantry those who speak of the change of the bushel as the 
 
21 
 
 cause of their distress ; but I trust that the farmers in other parts of Eng- 
 land will prove by their petitions against Sir Robert Peel’s Bill, that they 
 are not obnoxious to this taunt.” 
 
 But we have now a second question to put to Sir R. Peel and 
 those who concur with him in his principles of currency, 
 namely, — " How are the taxes to be made to fall upon people 
 according to their property, if, notwithstanding any increase of 
 taxation, the Pounds they receive in their income are to expe- 
 rience no diminution in their power of commanding commodi- 
 ties ? ” 
 
 There are but three ways in which taxes can be made to fall 
 upon people. The first is by direct taxation, such as an ipcome 
 or property-tax ; a person having 100 'golden pounds per annum, 
 and the tax being, say 10 per cent, the Government takes away 
 10 of the pounds from the person, leaving him 90 for himself. 
 
 ' This is direct taxation, and if the revenue be entirely collected 
 in this way, there will, as we said before, be no necessity for 
 any alteration of the present currency, nor of Sir B. Peel’s pre- 
 sent Pound. 
 
 But, unfortunately, very little of the revenue is collected in 
 this way. Generally speaking, we leave people in quiet posses- 
 sion of the number of Pounds, which their rents, investments, 
 interests, and businesses bring them in ; and this being the case, 
 there are but the remaining two methods by which they can be 
 taxed, namely, either by making them pay 10 percent, more for 
 their commodities, by which means a man with 100/. a year 
 will only obtain for his 100/. as many goods as 90/. formerly 
 purchased, and he will thus lose ten of his Pounds ; or, secondly, 
 by diminishing the value of each of his 100/. 10 per cent., by 
 which means he will also lose 10/. 
 
 With regard to the first of these two methods, viz. making 
 the man pay 10 per cent, more for his goods, we have shewn that, 
 if the Pounds which are in circulation be golden pounds, this is 
 impossible ; as it is directly in opposition to the laws of com- 
 merce and exchanges that more gold shall be obtainable for 
 goods than is equal to their intrinsic value. If taxation is to 
 be levied in this way, it will fail to reach the parties it ought to 
 reach ; but will remain where it is first imposed, namely, upon 
 the producers of goods. 
 
 If, therefore, the first method of direct taxation be not re- 
 
 C 3 
 
22 
 
 sorted to, and the second method fail because it is opposed to all 
 the laws of commerce and exchanges, there remains but the 
 third method, namely, to tax the man by lessening the value of 
 each of his Pounds 10 per cent. 
 
 This is the plan which would come into operation if a cur- 
 rency system were established which would allow gold and sil- 
 ver to rise with other commodities. If taxation increased, the 
 Pound would become less valuable, because it would command 
 less wheat, less gold, less silver, less every thing else. If taxa- 
 tion were repealed, the benefit of the repeal would be felt by 
 the possessor of the Pound, by the Pound becoming more avail- 
 able to purchase wheat, gold, and other things. 
 
 And if this last plan of currency be not adopted, but Sir 
 Robert Peel’s acted upon instead, the productive interests of 
 this country, both agricultural and manufacturing, must prepare 
 for a degree of continuous depression and adversity to which 
 they have hitherto been strangers, — great as their sufferings at 
 times have been. For, though the principle of the new measure 
 propounded by Sir R. Peel is just the same as that of his former 
 Currency Bill of 1819, yet it is important to remark that the 
 principle of that Bill has never yet been fully carried out. 
 Prices have never yet been suffered to sink for a permanence to 
 the low level which it is the natural tendency of that Bill to 
 effect. They have always been kept up by the paper currency 
 of the country at a higher rate than could possibly be obtained 
 under a currency strictly conformable to the standard established 
 by that Bill, and at times prices have been for a short period 
 even remunerating. But this new measure of Sir R. Peel’s is 
 to put an end to these alternations "of prosperity and distress. 
 Fluctuations are to be prevented : but how are they to be pre- 
 vented? No doubt by producing one continuous level of low 
 prices which will never permit of that just return to producers 
 in general which a system of indirect taxation renders necessary. 
 The agriculturist may think that he is secure against this de- 
 pres_sion of prices, being protected by the operation of the corn 
 laws ; but we respectfully advise him not to be too sure of that. 
 Even if the corn laws are continued, and bond fide acted upon, 
 — if they are not in any way shirked or neutralized by double 
 dealing, yet the depressing effect of these new currency regu- 
 lations upon all other branches of industry not protected like 
 
23 
 
 farm produce, must re-act very injuriously even upon land. 
 Tlie farmer cannot prosper long, if all around him are in adverse 
 circumstances; and there is no question but that the natural 
 tendency of the measure is to bring down the prices of all com- 
 modities to the level of the lowest priced countries, where no 
 taxation of any amount prevails. The lowness of price to 
 which all other things will thus be brought by this measure, 
 will make the higher price obtained for corn stand out in more 
 prominent and ungracious relief ; and stimulate to a greater pitch 
 of enthusiastic determination those exertions which are being 
 made to adjust the prices of agricultural produce to the prices of 
 other commodities. The corn laws cannot stand long if the 
 community at large become really distressed : and we think it 
 will be unwise if our landowners allow this fearful experiment 
 to be made. 
 
 And such a result as this must follow the adoption of the 
 principle openly avowed by Sir R. Peel ; he says it is his ex- 
 press object to bring all the paper currency of the kingdom to 
 the same value as gold. His w’^ords are, “ What I want is this, 
 that I shall have an ample supply of that paper currency whose 
 value shall be exactly conformable to gold.” Now this has a 
 very specious and plausible appearance, and the very idea of 
 the Premier being able to establish such a currency as this was 
 welcomed by the cheers of the House. But it will be found 
 on examination that this is the very principle which if carried 
 out will annihilate the prosperity of all the productive interests 
 of the country, but more especially that of the agricultural in- 
 terest. What is the meaning of the paper being of the same 
 value as gold? Paper of itself has no intrinsic value, it is its 
 value in exchange that constitutes the only value of paper. It 
 is clear, then, that it is the exchangeable or purchasing value 
 of paper which Sir R. Peel wishes to make equal to that of 
 gold ; that every pound of paper shall be equal in purchasing 
 power to 5 dwts. 3 grs. of gold ; that no higher prices shall be 
 obtained in the general currency of the country for products of 
 any kind but what is the equivalent of these products in gold. 
 Now, I venture to say, that if Sir R. Peel is permitted to effect 
 this avowed purpose of his, if the agricultural and other pro- 
 ductive interests of this country are so utterly blind to their own 
 welfare as to allow Sir R. Peel to consummate this intention, 
 
 C 4 
 
and if prices are actually brought down to the gold price, 
 then wheat will be brought down to about 345. a quarter, for 
 this is its natural price in gold. The higher you make the 
 value of that instrument for which your goods are exchanged, 
 the lower do you make the goods which you exchange away. 
 Observe, I do not mean to say, that do what Sir Robert Peel 
 will, he can bring down wheat to quite as low a price as this, for 
 there are the expenses of importation, which form a natural pro- 
 tection to the farmer to some small amount ; and where there is 
 a population like ours, increasing i*apidly every year, the increas- 
 ing demand will keep an article like wheat up to the highest 
 price possible. The price I think wheat will come to on an 
 average under the full operation of Sir R. Peel’s currency mea- 
 sure Avill be somewhere about 455. a quarter ; and if the agri- 
 culturists of this country can live in comfort and respectability 
 upon this price with the prices of all other agricultural produc- 
 tions in the same proportions : — if they think they can, upon 
 such prices, pay the various rates, taxes, and assessments made 
 upon them, and keep the poor from starvation ; — if they can 
 discharge the various obligations arising from family settle- 
 ments ; — if they can pay off incumbrances arising from moneys 
 advanced to etfect improvements on their estates ; — and if they 
 can find it a safe and profitable speculation to take up more 
 money to continue and extend such improvements ; — I say, if 
 they think they can do all this, and still receive proper remune- 
 ration by selling wheat at 455. a quarter, then let them join the 
 low-price gentlemen in cheering on Sir Robert Peel in his great 
 plan of currency reform ; let them have the honour of lending 
 a helping hand to establish that sound and wholesome system,” 
 which will allow of no addition to the prices of corn or other 
 commodities from the general weight of taxation. But let them 
 not be surprised some four or five years hence, to find the county 
 newspapers rather inconveniently crowded with advertisements 
 of sales of stock and farming implements, — let them expect to 
 hear from their tenant farmers, that half or the whole of the 
 capital which they had invested in their farms, had become 
 absorbed ; — let them expect to experience the absolute necessity 
 they will find themselves under at every audit, of making some 
 considerable abatement of rent, and perhaps, in some cases, of 
 foregoing it entirely ; and, finally, when the time arrives when 
 this notable scheme has come into full play, let them expect to 
 
25 
 
 see those men, who were wise enough to keep till this time their 
 property in money securities, which could be realised at any 
 moment, able to invest their cash in land, at a price which will 
 cause many a noble estate to pass away from the hands of its 
 possessor. 
 
 Then, and I fear not till then, with reference to many, will 
 be learned, by the sufferers, the inevitable and disastrous effects 
 of a paper currency, whose value shall be exactly conformable to 
 gold, in a country circumstanced like our own. Then will they 
 experience the dire effects of that apathy, or that rash con- 
 fidence which prevented them making themselves personally ac- 
 quainted with this momentous subject, but which led them to 
 trust their dearest interests in the hands qf one man, and upon 
 his sole decision to risk the possession of their very estates. 
 
 That the express tendency of Sir Robert Peel’s scheme is to 
 bring every kind of product down to its own natural price in 
 gold, that is, to assimilate the prices of articles in this country 
 to the lowest prices prevailing for these articles in other coun- 
 tries, thereby making no provision for the higher prices which 
 every producer feels he requires in this country — that this is the 
 express tendency and object of Sir Robert Peel’s new currency 
 regulations, is evident from the whole tone and complexion of 
 his speech. It is so important to understand this, that I am 
 sure I may be forgiven, if I even run the risk of having to 
 repeat the same arguments, in calling attention to any parts of 
 the Premier’s speech, which make this object palpable. Now, 
 this is evident, from the way he talks about gold. The very 
 reason adduced by the Premier why he thinks gold to be so 
 pre-eminently fitted to be our measure of value is this : that 
 it is an article of commerce, the possession of which depends 
 upon the same laws which regulate the import and possession 
 of all other articles. 
 
 Now what, let me ask, regulates the import and possession of 
 gold and of all other articles ? What will induce the foreigner 
 to bring gold here, and what will enable us to retain it after we 
 have got it ? And what, on the contrary, will cause the ex- 
 portation of gold, and consequently deprive us of this medium 
 of exchange ? Why, just this : — The foreigner does not send 
 gold here for nothing, he sends it in the purchase of or pay- 
 ment for goods ; and when does he purchase goods ? Why 
 clearly when he can purchase them as cheap or cheaper here than 
 
26 
 
 any where else. If his gold will fetch him more of commodities 
 by sending it to another market, he will send it there and buy 
 in that market. It is evident, therefore, that we can only 
 oMain and r<?tain the gold by assimilating the prices of our com- 
 modities to the lowest prices of those commodities in other 
 countries, and this is what Sir Robert Peel’s plan goes ex- 
 pressly to effect. Sir Robert Peel desires to see gold either go 
 abroad or come from abroad, in obedience to the same laws 
 which regulate the importation or exportation of all other com- 
 modities. He desires to accomplish a perfect equilibrium of 
 gold currency between this and all other countries, but he must 
 either overlook the fact, that an equilibrium of currency will 
 bring an equilibriuni of prices, or he must intend that such 
 an equilibrium of prices shall be effected. One hardly knows 
 which system it is that he wishes to see carried out, for he acts 
 upon one system with regard to corn legislation, and upon 
 another with regard to his currency measures. When he is 
 legislating upon corn he says, that such are the heavy bur- 
 dens to which producers in this country are subjected, that 
 though 345. is the natural price of a quarter of wheat, yet the 
 farmer must receive 56s. Yet, when he comes to his currency 
 legislation, instead of adopting measures to carry out and render 
 practicable this just increase in the price of corn and of all 
 other productions, he takes steps to prevent this increase as far 
 as the currency can effect it, and legislates for prices to become 
 as low here as in other countries, where no taxes are levied on 
 commodities. He acts therefore in opposition to himself, and 
 in opposition to that sound maxim which we cannot too often 
 quote. “ When taxes are laid upon commodities, their prices 
 must necessarily rise in a corresponding proportion, otherwise 
 the producers will not obtain the ordinary rate of profit.” 
 
 But the tendency of Sir Robert Peel’s currency regulations is 
 not only to lower prices by assimilating them to the lowest 
 priced markets, but also as an effect of this depression of prices, 
 greatly to increase the amount of taxation. Whether taxes are 
 light or heavy, depends upon the amount received to pay them 
 with, — lOOZ. a year to a man who had 10,000Z. a year would be 
 a light payment, but to a man who had only 150Z. a year it 
 would be a ruinous deduction from his income; — so in like 
 manner will our taxation be, in some proportion, light or heavy 
 
27 
 
 according to the amount of our receipts. Now what forms the 
 receipts or revenue of the country ? What is it that furnishes 
 the fund out of which the taxes are paid ? Why, the sale of the 
 productions of the country, agricultural and manufacturing, 
 and the amount of taxation will entirely depend upon what 
 quantity of these productions it will take to pay them, and the 
 quantity of these productions that it will take will depend upon 
 the prices obtained for them. The lower you force down the 
 prices of goods, the greater quantity will it take to pay the 
 taxes. Through the influence which Sir Robert Peel’s Currency 
 Bill of 1819 has already had in lowering the prices of commodi- 
 ties, taxation has been made much greater since the war termi- 
 nated, than it was during the war. Even reckoning it in wheat, 
 an article which has in some degree been shielded from the 
 effects of that measure, we find that on an average of fifteen 
 years, taxation had been increased about 30 per cent. 
 
 FIFTEEN YEARS OF WAR. 
 
 1800 to 1815 - 13,953,719 quarters of wheat. 
 
 FIFTEEN YEARS OF PEACE. 
 
 1815 to 1830 - 17,191,160 quarters of wheat. 
 
 Now it took this increased quantity of wheat, notwithstanding 
 that the price realised on an average of the whole time was 65 s. 
 a quarter. How much more wheat will the taxation take if 
 wheat be reduced by the new currency regulations, from 65s. 
 to 455. per quarter. The inference is so obvious, that it would 
 be a waste of time to dwell longer upon this point by way of 
 argument, and we will, therefore, proceed to lay before you a 
 few facts, to shew you to what extent the burdens of the country 
 have been increased already, by Sir Robert Peel carrying out 
 his bill of 1819, as far as he has already carried it out, and then 
 leave you to judge whether any words have ever yet been in- 
 vented, which (if we were disposed to express ourselves angrily 
 towards Sir Robert Peel) would be strong enough to express 
 that burning indignation, which every man ought to feel, to see 
 so much injustice perpetrated, and so much suffering induced. 
 
 For the first part of the unnecessary additions to the burdens 
 of this country. Sir Robert Peel is not responsible, namely, the 
 way the loans were contracted during the war ; but it is neces- 
 sary, nevertheless, that we should describe it, that the whole 
 case may be understood. 
 
28 
 
 During the last war about 520 millions of our present national 
 debt were contracted, and it is naturally and reasonably supposed 
 by most persons, that 520 millions of money were actually bor- 
 rowed and spent to carry on the war : but this is a mistake, no 
 more than that which was equivalent to about 215 millions of • 
 
 our present gold currency were borrowed, and the other 305 
 millions have been added, without a farthing of value having 
 been received for them. This addition has been effected by the ♦ 
 method of contracting the loans in the first place, and by Peel’s 
 bill of 1819 in the second place. 
 
 To understand this, you must know that, at the time Govern- 
 ment borrowed the money to carry on the war, the common 
 interest for money was 6 or 7 per cent. Government, how- 
 ever, instead of borrowing the money upon a stock which was 
 to bear this rate of interest, kept borrowing money on a 3 per 
 cent, stock, and the way they borrowed it was this. They 
 would say, we want to sell 30 or 40 millions of a 3 per cent, 
 stock, who will give us the most money for it ? Now it is evi- 
 dent, that if capitalists could make 6 or 7 per cent, for their 
 money in other ways, they would not lend it to Government at 
 3 per cent. They therefore said, if it is to be a 3 per cent, 
 stock, we can only give you 50/. or 55/. (as the case might be) 
 for each 100/. of this stock. If you will create a 6 per cent, 
 stock, that is, pay 6 per cent, interest, we will give you 100/. 
 money for every 100/. of the stock ; but if it is a 3 per cent, 
 stock, we can only give you 50/. Thus the Government only 
 received 50/. in money, though it was recorded as a debt against 
 the country of 100/. ; each purchaser of 100/. of this stock 
 having a written acknowledgment given to him that the coun- 
 try owed him 100/., when perhaps he only gave 50/. or 55/. 
 for it.* 
 
 4 
 
 * We are quite aware that it made no difference at the time the money 
 was raised, whether the loans were contracted in a three per cent, stock or 
 in a 6 per cent, stock, that it was of no importance whether the government 
 borrowed two principal sums of 50L each, and paid two sums of ‘61. per annum 
 as interest for them, or whether it borrowed a principal sum of lOOZ. and paid 
 6Z. per annum as interest for it. We say, we know it made no difference at the 
 time, but the evil is that it has perpetuated a high rate of interest for these 
 loans for ever. Had government said thus : — “We are aware money is at a 
 high rate of interest, 6 per cent., and we must of course create a stock bearing 
 this rate of interest,” Government then could have raised the same amount 
 of money by creating half the quantity of stock. That 300 millions of stock 
 
29 
 
 In this way were created, though not all in the 3 per cents., 
 520 millions of the national debt, which stand charged against 
 us at that amount, while the sum actually received was only 
 306,800,000/., the average rate paid for 100/. of stock from 
 1793 to 1815 being about 59/. Bank paper money received 
 for every 100/. charged to the country. Thus, in the first 
 place, was 213,200,000/. at once put down to us which was 
 never had at all. 
 
 One would have thought that this was surely a sufficient 
 overcharge to the country ; but Sir Robert Peel did not think 
 so, for now comes his share in the business. This 59/., which 
 had been received by the Government, for every 100/. of stock 
 was not 59/. in golden sovereigns or guineas ; it was 59/. in a 
 currency of a different nature, one which was capable of that 
 diminution in the value of the pound which we have shewn a 
 system of indirect taxation calls for. This 59/. was lent to 
 Government in notes of the Bank of England, which had so 
 diminished and properly diminished in value by the process 
 already explained, that each 1/. note was worth only 14^., as 
 compared with our present currency. 
 
 By reference to some tables that we are able to produce, you 
 will observe what goods the paper currency commanded com- 
 pared with what goods the gold currency commanded, and will 
 judge what was the value of the paper pound. 
 
 [Tables were here exhibited to show that 46/. in paper were 
 only equal to 34/. in gold, and that this relative value prevailed 
 both with regard to the gold currency existing previous to 1797 
 and subsequently to 1819.] 
 
 Now, gentlemen, you have a full and complete view of the 
 addition to our burdens which has been brought about by Sir 
 Robert Peel and his coadjutors. Now, you see one great cause 
 of the misery and depression of the country, of respectable 
 families brought to ruin, of men unable to make headway 
 against low prices, and profits, and heavy taxation. But this, 
 
 would have raised them as much money as 600 millions did, and the advan- 
 tage would have been this : — Government could have said, money has now 
 fallen from 6 per cent, to 3 per cent., and we will give notice to the holders 
 of the stock, that we will raise fresh loans at 3 per cent, and pay off those to 
 whom we are paying 6 per cent, interest, thus saving half the interest. 
 Government cannot now, however, do this, as, in order to effect this purpose, 
 it would have to pay 600 millions of money instead of 300 millions, 
 because it has made itself liable to double the amount of money borrowed. 
 
ao 
 
 gentlemen, is not enough ; this very niglit is Sir Robert Peel 
 to move the second reading of a bill which is still more to lower 
 prices, profits, and wages, without lowering in a corresponding 
 degree the burdens of the country. This night will the Premier, 
 from the ignorance of the country, and the apathy of the Legis- 
 lature, rivet still more firmly the fetters of industry, and deprive 
 labour more surely and fatally of its due reward. 
 
 I dare not trust my feelings to go on with this part of the 
 subject. I wish not to declaim, but to reason. I wish to con- 
 vince your judgment, not to act upon your feelings ; and I 
 therefore resume the argument upon this important question. 
 
 You will recollect that the main point that I have been aim- 
 ing at — that which I wished most clearly to convince you of 
 the truth of, was this, that the “ Pound,” as a* denomination of 
 money, ought not to be or to represent an invariable quantity of 
 gold or silver. It will no doubt be felt by this time that there 
 must be some precise point in this question in which, according 
 to our opinion. Sir Robert Peel either fails to see that which we 
 believe to be the truth, or totally mistakes it ; and it may 
 possibly be desired by some present, that I would concisely 
 state what that point is. I will do so. Sir Robert Peel appears to 
 me evidently to be wanting in a clear conception of the difference 
 between “ Money ” and the commodities gold and silver. Sir 
 Robert Peel seems to have no idea that it is the necessary, just, 
 and proper result of indirect taxation to lessen the value of 
 money. Mark, I do not say to lessen the value of gold and 
 silver, but of Money.” There is an important distinction here, 
 of which few people have any conception. I may explain it to 
 you by a simple illustration. 
 
 Here is a shilling, and I find that the value of this shilling 
 depends upon the amount of taxation resting upon goods. In 
 the first place, fix upon any commodity you please, and say that 
 its natural price without any taxes is Qd. per lb., then my shilling 
 is worth 21b. of that commodity. But, in the second place, 
 taxation may have raised the price of this commodity to Is. per 
 lb., if so, my shilling becomes only worth only lib. of that com- 
 modity. My shilling will actually have fallen 50 per cent, in 
 exchangeable value from the taxation having doubled the price 
 of commodities. This is the case with ail “ Money ” truly and 
 properly so called; its value will necessarily depend upon the 
 
31 
 
 prices which goods realise in it ; and if our present eurreney 
 were merely “ Money ” and nothing else, its value would be 
 determined in this manner. It would alter, and become either 
 more or less valuable as taxation were diminished or increased. 
 But our present currency is something more than mere money, 
 * whose value is to be determined by the quantity of goods for 
 which it is made to exehange. Our currency is a commodity as 
 well as “Money.” Our golden sovereign is not only a pound, 
 but is also 5 dwts. 3 grs. of gold; and though its value as a pound 
 may alter, yet as 5 dwts. 3 grs. of gold it cannot alter, as long 
 as the labour necessary to raise it from the mines remains the 
 same. 
 
 The great evil in our present system is, that one or two eom- 
 modities, gold and silver, which have a fixed and natural value 
 in themselves as commodities, are selected from the mass to be 
 made money of, in which character of money ^ they are required 
 to fight against their character as commodities. As money, they 
 ought, as we have seen, to become less valuable as taxation in- 
 creases, but as commodities they cannot permit of this decrease 
 in value, forBiey still embody in themselves that fixed amount 
 of labour which constitutes their value, and which is never 
 altered by taxation. It is this subtle point that is not seen by 
 people in general, nor even by the majority of political econo- 
 mists. They do not clearly apprehend this most important fact, 
 that gold and silver, when shaped into coin, are absurdly made to 
 sustain, or rather, it is endeavoured to make them sustain two 
 characters and two values, namely their natural value as commo- 
 dities, and their conventional value as money, and that their 
 proper natural value as commodities is frequently in direct op- 
 ^ position to the value for which they ought to circulate as money 
 or tokens of value. As tokens or money they ought to repre- 
 sent or purchase less or more goods as these goods are more or 
 > less chargeable with taxation, but as commodities, they ought 
 to have an unalterable value as long as the labour necessary 
 to produce them remains the same, and it is this inharmoniousness 
 ^ between these two charaeters which unfits gold and silver from 
 acting as money in any State where indirect taxation is em- 
 ployed for the collection of the revenue. 
 
 Now it is only one of these two characters which Sir Bobert 
 Peel’s currency principles recognise or provide for. He divides 
 
32 
 
 pieces of gold into certain convenient portions, and lets them 
 circulate as commodities according to their intrinsic value, but 
 makes no provision whatever for their fulfilling their other 
 character, that of money. This is quite lost sight of. There 
 is no provision whatever made, by which no more than that 
 lesser quantity of commodities shall be had in exchange for 
 money, which indirect taxation naturally calls for. Sir Robert 
 Peel’s system is, in truth, no system of money at all. His sys- 
 tem is a system to destroy money in the proper and original 
 meaning of the term, which is that of a symbol or token of 
 value. His system is a mere system of barter, by which one 
 more convenient commodity than the rest is selected to be the 
 medium by which to exchange all other commodities, and with 
 this fatal drawback upon simple barter, that as the deduction 
 which Government makes through taxation on all commodities 
 ought to be provided for, this is rendered impossible, for certain 
 sized pieces of this commodity being always at one fixed deno- 
 mination or price, they cannot express that higher price which 
 taxation renders necessary ; or allow for that deduction in the 
 quantity of any commodity obtainable for a given sum of money 
 which the same course renders indispensable. 
 
 And I am the more convinced that this is the point in which 
 Sir Robert Peel’s acquaintance with the subject is deficient, 
 because, after a most careful examination of his speech, I do 
 not see the slightest indication that he has ever taken into ac- 
 count the proper effect of indirect taxation on commodities, and 
 consequently upon any currency which is formed of a commo- 
 dity intrinsically valuable. There is not the least symptom 
 that Sir Robert Peel is aware of this simple truth, that as the 
 proper effect of indirect taxation is to cause a less quantity of 
 any commodity to be purchased for the pound or the shilling 
 — less corn, less sugar, less every thing, so as to preserve the 
 relative prices of all goods from distortion ; less gold and less 
 silver must also exchange for the pound or shilling, and not 
 merely that the relative prices may not be distorted, but that 
 the higher prices may be effectually secured for the other com- 
 modities. 
 
 Let any member of the House ask Sir Robert Peel this plain 
 and simple question — Does he intend that the taxes levied on 
 commodities shall be added to the price of the goods when they 
 
33 
 
 are sold ? If he answer — Yes, then tell him that his currency 
 plan will fail to effect it, for its principles go only to provide for 
 that quantity of gold which is of the same intrinsic value as 
 the article, without including the taxes it bears. If, on the con- 
 trary, he say — No ! then at any rate the country will understand 
 ^ what Sir R. Peel means, because he will plainly say that he 
 intends to throw all the burden of taxation on the productive 
 classes — that when taxes are laid upon commodities their prices 
 shall not rise in a corresponding proportion, but that the pro- 
 ducers shall pay the taxes out of their profits instead. 
 
 But some people (not bearing in mind that the. higher prices 
 which our system of currency would produce, would not be 
 higher gold prices) are terribly afraid that these higher prices 
 would completely drive us out of the foreign markets, whereas 
 our system would be the very system to extend our foreign trade 
 greatly beyond what it is at present. The fact of gold and 
 silver not rising in our present system when other things do 
 rise, prevents the foreigner dealing in our markets, while, on the 
 contrary, if these metals were to rise with goods, the higher 
 prices would make no difference to him. F or suppose a foreign 
 merchant came over here to make purchases when our goods 
 have, through taxation, risen in our own domestic currency 
 from 2/. to 3/., this rise will be of no consequence to him if gold 
 and silver have also risen, for though he pays the higher price 
 for the goods, yet he receives an equally higher price for the 
 gold or silver money which he brings to pay for them, so that 
 this gold and silver still exchange for the goods. But if our 
 goods rise in price, while gold and silver do not rise likewise, 
 the foreigner’s money will not pay for the goods, and he will be 
 compelled to go to another market where it will buy them. It 
 is one of the greatest evils belonging to Sir Robert Peel’s sys- 
 tem of currency, that it either unnecessarily hinders our sales 
 '■ to foreigners, from our goods being too high in price for them, 
 or if .our goods be brought down low enough to enable the 
 foreigner to deal with us, then our productive classes do not 
 recover the taxation which attaches to aU our commodities. 
 Let gold and silver rise with goods, and our productive classes 
 will be amply remunerated, without requiring from the foreigner 
 a higher price in gold or silver than he must give elsewhere. 
 
 Having now shewn how injurious in every point of view is 
 
 D 
 
34 
 
 Sir R. Peel’s system of currency, let us look for and discover, 
 if we can, what is, and what was, the frightful and deplorable 
 circumstance connected with the condition of our country, which, 
 in the opinion of Sir R. Peel, rendered the Currency Act of 
 1819 necessary, and from which circumstance, we being still in 
 danger, these new currency regulations are rendered indispensa- 
 ble. Had we heard that it was the intention of Sir R. Peel to 
 effect some improvements in our currency system, and had we 
 been left to divine Avhat it was probable the Premier would have 
 said, we should have thought it most likely that he would have 
 dwelt upon the deplorable circumstances in which the agricul- 
 turists of this country had at various times found themselves 
 involved, and which had led to two or three committees being 
 appointed by Parliament to inquire into the causes of distress ; 
 we should have thought that he would have alluded to the fre- 
 quent depressions in the iron districts, giving rise to memorials 
 to Government, and earnest entreaties from the iron masters 
 that some steps might be adopted to raise the prices of their 
 produce so as to realise them some profit, and prevent the neces- 
 sity of blowing out their furnaces. We should have thought 
 that the distresses of other branches of our manufactures, such 
 as the silk trade and some branches of our cotton trade, would 
 have been recounted ; and that it would have been stated that, 
 after careful consideration, the conclusion had been arrived at, 
 that it was for want of steady and sufficient remuneration, 
 through want of compensating prices in all the departments of 
 industry, that this deplorable state of things was produced ; that 
 people had to work harder and receive less pay than they had 
 to do when the country was not half so rich in the aggregate in 
 material wealth as it is now. Further, that this want of remu- 
 neration for industry was evidenced by the alarming increase in 
 Poor-rates, in the increase of crime, and by the necessity which 
 existed for originating police establishments throughout the coun- 
 try. We should have expected further that the Premier would 
 have drawn this palpable inference ; that, as the wealth of the 
 country had in the aggregate increased instead of having dimi- 
 nished, that it was certainly not from want of a sufficient fund 
 that this distress existed ; that it was rather a want of the means 
 to make accessible, in fair proportions to all ranks, the wealth 
 which was being abundantly produced ; that the means of distri- 
 
35 
 
 bution evidently did not at all keep pace with the powers of pro- 
 duction ; and that as a necessary measure to put an end to this 
 deplorable state of things, he had come to the determination of 
 expanding and enlarging our distributive powers ; that they might 
 be more in accordance with our enormous powers of production, 
 which were every day producing wealth faster than our present 
 means of distributing it could circulate throughout society. We 
 ^ say we should have expected that these would have been the kind 
 
 of sentiments to which the Premier would have given utterance, 
 and which he would have advanced as a justification of his mea- 
 sures for regulating upon a better principle our monetary sys- 
 tem. But alas ! alas ! what do we hear instead ? We hear that 
 the proposed regulations are regulations of contraction rather 
 than of relief and expansion ; that though production increases, 
 the means of distribution shall decrease, and that the more goods 
 there are to exchange, the less money there shall be to exchange 
 them with. We hear also that the principle is to be adopted 
 and acted upon, that when we lose one part of our money — our 
 gold money, — then shall be taken from us, in similar proportion, 
 our paper money ; that standing, as we do, upon two crutches, 
 one of gold and the other of paper, should we unfortunately or 
 by design be deprived of one crutch, the other shall immediately 
 be knocked away from under us. And all this to prevent what 
 frightful circumstance — what deplorable calamity? Why really, 
 gentlemen, on Sir R. Peel’s account I am almost ashamed to 
 mention it, to prevent what is called the foreign exchanges 
 turning against this country, — a circumstance which, if rightly 
 understood, would be seen to be the very safeguard and protec- 
 tion of the country from suffering loss by the foreigner ; and 
 * the very thing which would accord ample and remunerating 
 
 prices to all our productive classes both agricultural and manu- 
 facturing. 
 
 As it is very important to have a clear conception of the 
 ground upon which Sir Robert Peel bases these currency re- 
 gulations, it is quite necessary that this part of the subject 
 should be clearly elucidated ; that, in the first place, a right 
 conception may be formed of what is meant by the foreign 
 exchanges turning against this eountry ; and, in the second 
 place, to ascertain whether there be all the evil in this circum- 
 \ stance Sir R. Peel seems to insinuate ; and we hope that tliose 
 
 D 2 
 
36 
 
 of our audience who understand these subjects, will bear pa- 
 tiently with us should we be a little elementary in our explana- 
 tions, as there may possibly be some present who have never 
 had their attention turned to the matter. 
 
 There are more senses than one in which it may be said that 
 the exchanges have become unfavourable to the country, but 
 the sense in which we wish to explain it is that in which Sir R. 
 Peel used the expression when he said that, in the year 1810, 
 “ men of sagacity observed that the exchanges had been, for a 
 considerable period unfavourable to this country,” and the origin 
 of which Sir Robert traced to “ that fatal measure, as he called 
 it, the Banh Restriction Act.” Now, the exchanges are mere 
 simple calculations of the value of our own money denomination 
 — the Pound, in the money of other countries. For instance, 
 our present sovereign is found, on comparing it with French 
 money to be worth intrinsically 25 francs 20 centimes of that 
 money ; — this, therefore, is called the par of exchange. In like 
 manner, compared with the money of Amsterdam, the sovereign 
 is found to be worth about 1 1 florins, — this par of exchange is 
 founded upon the intrinsic worth of the silver and gold con- 
 tained in the different coins. Now, what Sir Robert Peel says 
 “men of sagacity in the year 1810 observed, was this” — that 
 whereas the paper pound had formerly been worth 25 francs, 
 20 cents in French money, it was found by these men of 
 sagacity that, at successive periods, it kept constantly decreasing 
 in value when compared with the money of other countries ; — 
 that, compared with French money, the pound so fell in value 
 as that it became, successively, worth only 24, 23, 22, 20, 18, 
 and even as little as 17 francs, some odd centimes, — that is, 
 that the one pound Bank note, which would have formerly pur- 
 chased the silver contained in 25 francs, 20 cents, would only, 
 at last, purchase the silver contained in 17 francs. 
 
 Now this is the evil Sir Robert Peel complains of, the evil 
 which his great currency measure of 1819 was intended to 
 remedy, and the evil, the recurrence of which, his present cur- 
 rency regulations are to prevent the possibility of. But what 
 in truth was this evil ? What was it ? Why, just this, that 
 we possessed a medium of exchange in which gold and silver 
 could advance in price like all other commodities : the general 
 taxation of the country rendering the advance in price neces- 
 
37 
 
 sary for all commodities, and the bank note circulation (through 
 permitting gold and silver to rise likewise) rendering tlie ad- 
 vance possible. Silver and gold so rose in this bank note cir- 
 culation, though it was in defiance of law that they rose, that 
 at last only the silver contained in 17 francs could be purchased 
 for the pound, instead of the silver contained in 25 francs. 
 But then this was the very thing which permitted our farmers 
 to realise from 85. to IO 5 . per bushel for wheat — our iron 
 masters to realise 11. to 8/. per ton for iron, and all other productive 
 interests, those ample and compensating prices which have been 
 falsely attributed to our being in a state of war. Had silver 
 and gold not risen, these ample prices could not have been 
 obtained ; and when Sir Robert Peel succeeds in persuading 
 Parliament to allow him to establish so stringent a system of 
 currency as shall not permit of the exchanges being against this 
 country, as it is called, then will aU producers find that they 
 must be content with the natural gold price for their goods, 
 and that whatever taxes may be imposed upon these goods, 
 they must pay them out of their profits, instead of adding them 
 to the prices of their commodities. 
 
 But some may object and say, “ That is not the way to state 
 the case. Instead of saying that gold, silver, and other com- 
 modities rose at that time, you ought to say that the pound fell 
 in value — that the bank note was depreciated — that it fell 
 successively to 19, 18, 17, 16, and 15 shillings.” Well, I have 
 no objection to state the case in that way ; for, taking it in 
 that light, it will illustrate to you the proper, just, and neces- 
 sary consequence which I have shewn you in a previous part of 
 this lecture ought to follow the imposition of taxes upon goods 
 — that consequence being the lessening the value of money ; 
 and you will recollect that I pointed out that it was the great 
 evil of the currency we now have, that, being a currency of 
 unalterable intrinsic value, it could not lessen in value in pro- 
 portion as indirect taxation rendered it absolutely necessary 
 should be the case. 
 
 But not only did that rise in the price of gold and silver, of 
 which the unfavourable state of the exchanges was an evidence, 
 confer remunerating prices upon industry at home, but it pre- 
 vented that enormous loss which we should have suffered at the 
 hands of the foreigner had the exchanges not fallen in that way, 
 
 D 3 
 
38 
 
 and which losses we have suffered since Sir Robert PeeFs cur- 
 rency principles have been fatally adopted by Parliament, when 
 the general prices of commodities rose in our markets through 
 heavy taxation, from 4Z. to 61. What would have been the re- 
 sult, if when the foreigner had sold goods here for 61. , for which 
 he formerly only got 4/., he had been enabled to take in payment 
 6 English pounds undiminished in value, — still worth the 25 
 francs each ? Why clearly this, that he would havo obtained 
 for his goods six times 25 francs, that is, 150 francs instead of 
 100 francs, their real value. We did allow the foreigner 6/., it 
 is true, for his goods, but they were 61. worth according to the 
 unfavourable; state of the exchanges, as Sir Robert Peel calls it, 
 only 17 francs each. Now 61. at 17 francs each, amount to 102 
 francs, or much about the same price as 4Z. at 25 francs each. 
 The foreigner, therefore, did not take from us more than the 
 fair value of his goods ; he got a higher nominal price, but by 
 the fall in the exchanges this was made a mere nominally higher 
 price and not a real one. But what is the case now, whenever 
 from any cause our markets do rise higher than usual? why 
 this, that if the foreigner can manage to sell his productions in 
 these high prices, they are really higher prices, because he can 
 demand in payment a Pound, which by Sir Robert Peel’s policy 
 is kept constantly at 5 dwts. 3 grs. of gold, and of course inva- 
 riably worth 25 francs 20 cents of French money. It would be 
 protracting this lecture to too great a length, to enter fully into 
 this part of the subject ; but perhaps what we have said may 
 suggest ideas in the minds of the audience, as to what may pos- 
 sibly be in a great degree the cause of that great excess of ex- 
 ports over imports, which many have superficially thought to 
 be a proof of our prosperity, while at the same time it has turned 
 out that the more goods we sold, the worse off we were. We 
 shall therefore dwell upon this part no longer than to remark, 
 that the following extracts from the public press, seem to indi- 
 cate that the real truth of the case is beginning to be apparent 
 even to those who have been among the greatest sticklers for Sir 
 Robert Peel’s currency principles. The Morning Chronicle ” 
 thus remarked a short time since : — Imports as well as exports 
 are necessary to constitute a profitable trade, and it does not 
 depend so much on what is exported, as what is received in re- 
 turn, whether the trade is a gaining or a losing one.” 
 
39 
 
 So also the Globe/’ as follows : — 
 
 ‘‘ At every opening session, and in every Tamworth harangue, 
 before he took office, the increase in our exports furnished Sir 
 Robert Peel with his stock topic in answer to all the complaints 
 of commerce, and all the attacks on the corn laws. It was 
 ^ useless to tell him that increased exports did not necessarily 
 prove an increased trade ; but might equally indicate a depressed 
 home consumption, and a depreciation in the value of goods, 
 ^ the export of which was forced to relieve the home market of a 
 
 pressing excess, and to bring back the gold, which large im- 
 portations of corn at high prices are draining from us.” It is 
 indeed clear, that if we are allowing the foreigner better prices 
 in our markets than we are obtaining in his, we must export as 
 many more goods as will make up the difference. 
 
 We come now, gentlemen, to the last point to which we shall 
 be able at the present time to direct your attention ; namely, 
 the plain insinuation of Sir Robert Peel, that the Bank Restric- 
 tion Act gave rise to a system of money which had had no 
 previous parallel in the history of the country. The Right 
 Hon. Baronet’s words are, alluding to the Bank Restriction Act, 
 that it led not only to a new course of practice in mone- 
 tary affairs, but to new theories and notions as to the standard 
 of value.” Now, this new course of practice in monetary affairs, 
 as Sir Robert Peel calls it, could of course be no other than 
 the general circulation of the bank note as a legal tender, the 
 said bank note not possessing any intrinsic value, and not con- 
 vertible on demand into fixed quantities of gold and silver. 
 But I beg to acquaint you, gentlemen, that this, instead of 
 being a new practice, was the ancient course of practice in this 
 ^ country’s monetary affairs ; that such a thing as an entire cir- 
 
 culation of metallic currency, or of representative currency 
 convertible on demand into fixed quantities of gold or silver, 
 9 was, until the establishment of the Bank of England, unknown 
 
 in this country for 600 years previously. 
 
 From the time of Henry I. down to the reign of Queen 
 Anne, a period of 600 years, there was in circulation con- 
 currently with the coin of the realm a large quantity of Exche- 
 ' quer money in the shape of the Exchequer tallies, which tallies 
 were a legal tender at the Exchequer, and received there in 
 payment of taxes at the amount inscribed on them. The origin 
 
 I 
 
40 
 
 of these tallies is well worth knowing, and ought to be par- 
 ticularly interesting at the present time, as the necessity for 
 them was caused by the system of taxation adopted by Henry I. 
 The monarchs who preceded Henry I., William the Conqueror, 
 and William Rufus, derived their revenues partly from immense 
 estates held by the Crown, and partly by taxes and services 
 levied in kind upon the people, which taxes and services might, 
 however, be commuted for money at the option of the person 
 paying them. Thus, the payment of an ox, or of bread for 100 
 men, might be commuted by the payment of one shilling, and 
 the payment of a sheaf, or of provender for 20 horses, might be 
 commuted by the payment of 4 pennies. Henry, however, in 
 granting a charter, by which lands were held upon a more 
 secure tenure, introduced a clause by which those provisions 
 which had hitherto been furnished in kind to the monarch were 
 for the future to be rated at certain prices, and collected abso- 
 lutely in the coin of the realm. This arrangement tended, of 
 course, to make coin comparatively more rare and indispensable, 
 and to originate a necessity for some more extensive circulating 
 medium than then existed. To supply this, Henry instituted 
 the office of the Exchequer, and issued from it these Exchequer 
 tallies, which were made a legal tender to Government in dis- 
 charge of taxes. 
 
 We see, therefore, that though Henry did ordain that pay- 
 ments to himself should no longer be made in kind, but in 
 money, he wisely and considerately took care to furnish his 
 people with the means by which such payments might be made, 
 and it is important to remark, that during the time these Ex- 
 chequer tallies circulated, more remunerating prices were ob- 
 tained for the products of industry than could possibly be 
 realised after they were put an end to. By reference to a table 
 furnished by Sir George Shuckburgh Evelyn to the Royal 
 Society in 1798, it would appear that wheat was at least Is. 6d. 
 a bushel lower for three quarters of a century after the esta- 
 blishment of the Bank of England than it had been for 500 
 years previously. Even if we doubt the accuracy of this table, 
 from the remoteness of the times to which it has reference, we 
 are informed by McCulloch’s Commercial Dictionary, that wheat 
 was l 5 . a bushel lower for half a century after the establishment 
 of the Bank than it was for half a century previously. 
 
41 
 
 Unfortunately, however, for the country, the civil wars, and the 
 distractions of the Revolution, so weakened the confidence of the 
 people in the integrity of the ruling powers, that all Government 
 securities, such as Exchequer hills and tallies, fell to an enor- 
 mous discount. Sir John Sinclair informs us that these se- 
 curities were at a discount of 40, 50, and even 60 per cent. 
 This placed the Government in circumstances of great em- 
 barrassment, in the midst of which a few individuals came for- 
 ward and projected the Bank of England ; and as the projectors 
 agreed to lend the whole of the capital of the Bank 200,000 
 to the Government at 8 per cent, interest, the Government 
 gladly availed itself of so convenient a loan, when its own 
 credit was at so low an ebb ; and allowed the new Bank note 
 circulation shortly to supersede the old Exchequer money which 
 had been in use for so long a period, and which had rendered 
 such essential service to the state. 
 
 If we refer first to what Dr. Davenant writing in 1698 says, 
 and secondly, to the circulation of the Bank for twenty years 
 afterwards, we shall discover what a deplorable difference to the 
 country this substitution of Bank paper for the old Exchequer 
 money of the country made. At the first mentioned period, 
 Davenant says, ‘‘We had upwards of 14,000,000 in tallies, 
 lottery tickets. Bank stock, malt tickets, and securities of the 
 like nature, which went from hand to hand, having their founda- 
 tion in the public faith.” And he adds, “ In this kind of cur- 
 rency, the landlord received his rent duly, the farmer sold the 
 product of his land at a high rate. Wool, tin, lead, and leather, 
 bore a great price, and which was of great consequence, the 
 manufactures of the kingdom went on cheerfully.” 
 
 A very different state of things, however, is unfolded to us 
 when the Bank obtained control over the circulation of the 
 country. Instead of 14,000,000 of credit currency circulating, 
 which allowed of remunerating prices to all producers, as Da- 
 venant remarks, we find that so soon after as the death of 
 Queen Anne, in 1714, the paper circulation of the Bank and 
 of Exchequer bills together did not amount to more than 
 6 , 000 , 000 . 
 
 The effect which this contraction of the currency had upon 
 prices and labour we have already described ; this depression 
 continued during the first three quarters of the 18th century. 
 
42 
 
 Towards the close, however, of the 18th century, many circum- 
 stances, which we cannot stay to describe, combined together 
 to burst asunder the chains of a contracted currency, which had 
 for so long a period bound the productive classes hand and foot ; 
 and in the year 1797 the old Exchequer tally system was in some 
 measure restored by the Bank note being made a legal tender, 
 without its being liable to be converted into gold at a fixed 
 price. 
 
 It is not correct, therefore, as Sir Robert Peel has asserted, 
 that the system of currency to which the Bank Restriction Act 
 of 1797 gave rise, was a new course of practice in our monetary 
 affairs. The fact is, that it was in a very great degree the 
 resumption of the old system, which had been in practice for 
 600 years previously ; and it would be more correct to say that 
 the exclusive circulation of coin, and representative currency 
 convertible on demand into coin was a new course of practice. 
 The chief difference between the circulation of the Exchequer 
 tallies and the Bank notes, under the Restriction Act, was this, 
 that the nation had to pay interest for the use of .the Bank 
 notes, while for the use of the Exchequer tallies it had to pay 
 no interest. 
 
 In conclusion. Gentlemen, we beg leave shortly to recapitu- 
 late the points upon which we think we have shewn Sir Robert 
 to have been mistaken : — ^ 
 
 1. That according to the practice, and the ancient monetary 
 policy of this country, the Pound has not been what Sir Robert 
 Peel described it to have been, namely, a certain definite (by 
 which it is concluded he must mean invariable) quantity of the 
 precious metals. 
 
 2. That, supposing it had been such hitherto, it ought no longer 
 under the existing circumstances of the country, to be of such a 
 character ; for that the quantity of gold or silver to be obtained 
 for the Pound, ought, as is the case with all other commodities, 
 to be made to depend upon the amount of taxation upon com- 
 modities. 
 
 3. That Sir Robert Peel by means of his corn law legislation, 
 has proved that the Pound should be very different to what he 
 would make it by his currency legislation — and not only so. 
 
43 
 
 but that the Pound ought to be a variable quantity of gold or 
 silver, instead of a fixed quantity. 
 
 4. That unless it be so, goods cannot rise in price according to 
 taxation, in obedience to the soundest maxims of political eco- 
 nomy, and that neither can taxation be made to fall on the par- 
 ties who ought to pay it. But on the contrary, if gold and 
 silver be allowed to rise and fall like other commodities, the 
 diminished quantity of gold or silver which people would receive 
 in exchange for their Pounds, would act as the most perfect pro- 
 perty-tax. 
 
 5. That the circumstance which has been represented to be such 
 a dire calamity to the country, viz., the unfavourable state of 
 the exchanges produced by the Bank Restriction Act, and 
 which has given rise to all Sir R. Peel’s fatal measures on the 
 currency, was in fact that very circumstance which produced 
 ample and remunerating prices to all our productive classes ; and 
 also prevented the foreigner from unduly profiting in our high- 
 priced markets at our expense. 
 
 Lastly, That instead of the Bank Restriction Act giving rise 
 to a new course of practice in our monetary affairs, it might 
 more properly be described as a resumption of the ancient prac- 
 tice, which had existed for 600 years previous to the establish- 
 ment of the Bank of England, and which the circulation of that 
 corporation had unfortunately superseded. 
 
 I would beg to conclude by entreating you, that as Sir Robert 
 Peel said that the whole foundation of his measure rested upon 
 certain assumptions with reference to the Pound, and from which 
 assumptions I hope I have made out to your satisfaction that the 
 Premier had no good warranty, that you will exert the utmost 
 influence you possess to prevent the dire calamities which must 
 ensue should Sir Robert Peel succeed in establishing his system 
 of Currency in all its stringency and rigour. With regard to 
 the ultimate result I am perfectly at ease, as I know the truth 
 must prevail in the end. The Premier’s present success will 
 ensure his final defeat, but the misfortune is, that this happy 
 result will only be brought about by the intense sufferings of 
 the people. If the further suffering of several years could be 
 prevented by the exertions of those who are actively engaged 
 in combatting the errors which prevail on this subject, it would 
 
44 
 
 indeed, be a glorious achievement. May I without offence 
 earnestly and respectfully beg all present to lend their aid to 
 that excellent Society, the. Society for the Emancipa- 
 tion OF Industry,” ‘at the request of the promoters of which 
 I have ventured to appear before you this day, and given what 
 assistance lay in iny power in elucidating the subject. 
 
 
 
 London : 
 
 Printed by A. Spottisw’oode, 
 New- Street- Square .