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The reason is obvious. What can a Director residing in London know of the particular dealings of a Manchester manufacturer? The published averages of prices would no doubt improve credit generally, and local credit in every district; but the increase of banking business under these circumstances would make a division of labour indispensable.

Suppose, instead of establishing branch-banks in our country towns, where they interfere with the country banks and create a feeling of ill-will, the Bank of England undertook to establish branches in our Colonies, where they would promote industry at home and abroad; what objection would there be to the adoption of such a step? The chief difficulty would evidently be the obtaining circulation for the notes in the first instance. In this legitimate mode of extending the national credit, the Bank of England would have no resource but to adopt the mode of proceeding by which local banks improved their credit. As a district, by publishing its local transactions of trade and currency, obtained credit at home, so the nation ought to seek credit in her Colonies and throughout the world, by the most open challenge to competition and the most unreserved publicity regarding her banking transactions. From the local published prices, which it is thus manifestly the object of the trader to keep low, a weekly statement might be compiled for the nation. The inspection of these prices must be confided to persons fully qualified, and ought indeed to be a matter of election. No trust can well be conceived more sacred than that which would thus be reposed in these arbitrators between the nation and the trading world at large.

That the exchanges are regulated by the market prices is well known. The nation which desires to be well supplied with bullion has only to produce cheaper than all others, and the precious metals will flow into her markets from every quarter of the globe. Were our trading resources fully applied, and productions of every kind collected at the cheapest rate in England, which (for everything but food) is practicable, the first inconvenience felt by the Bank would be the abundance of bullion. This in the commencement would afford it the means of supplying the branch, colonial, or foreign banks with coin, which would gradually introduce the accept

ance of notes in places where it now enjoys no confidence. By degrees wealth and civilization would spread and be equalized in all countries that accepted the commercial alliance of England, and the irregular flow of gold and silver would cease. These metals might eventually be wholly withdrawn from the currency of civilized countries, and, like other metals, be appropriated to the construction of utensils, domestic or ornamental. In a good state of national credit, it would be just as absurd to stamp sovereigns of gold, as it would be to print notes upon thin sheets of that metal in lieu of


The utility of a candid publication of the Bank proceedings has been ably shown and energetically insisted upon by Mr. Tooke, whose services in exposing the real effect of the Bank issues have been of inestimable value to the nation. That we differ from this high authority, in considering the universal convertibility of notes into gold or silver to be perfectly impracticable with the present desirable extension of trade, may be accounted for by the difference of our respective positions. The attention we have turned to the state of the other parts of Europe and of our Colonies, has impressed us with a strong feeling of regret at the privations which whole communities now experience, and with the conviction that this state of things can be remedied,--but only by a reform of our principles of trade. The extent to which trade may be increased is, in our opinion, so enormous that the capabilities of our present circulation are utterly inadequate to keep pace with it. Indeed, we do not see how the principle can be defended, that the total productions of the earth and of the possible combinations of art are necessarily to bear any fixed proportion to any one product,-least of all to one of the most limited in quantity. That, however, nothing less than the free adoption of a sound commercial and currency system will allow England to exercise the commercial and political influence over her Colonies to which she is entitled, is clear, because the extension of the credit which she for the moment exclusively enjoys is an indispensable condition of the increase of trade which we contemplate.

The publication of the nature of the advances made by the Bank in notes sets the public right upon two points. The

amount of bills discounted shows whether trade is increasing or diminishing; and this, connected with the weekly averages, would point out the state of the country, its prosperity or distress. The advances made to government on exchequer-bills are the touchstone of the credit of all national banks under the system of secrecy, and indeed are everywhere the cause of any mystery being kept up. According to their proceedings on this point it is that the national banks of Europe deserve to be classified.

In England notes are advanced by the Bank on bills upon the Exchequer, on account of the current revenue. These bills form the unfunded debt: they are security to the Bank proprietors, like merchants' acceptances, and their intrinsic value is measured by the stability of the government. The accounts of the Bank show that this fair system has never been abused by that body; the greatest issue of notes was, as we have seen, in 1839, and at no time during the restriction were the Bank issues excessive. The depreciation in the value of the notes during the restriction may be ascribed to two very different causes. They were, as it is well known, low when measured in gold; but gold was no fair standard of the value of notes at that period, because the value of that metal was affected by causes peculiar to itself. The necessity of paying our foreign subsidies and the pay of our troops on foreign service in gold, caused an unusual demand for gold coin, which raised its value not only in relation to notes but to every other commodity. On the other hand the want of confidence in the stability of government, and the high profits of trade, which indisposed capitalists to let their stock lie idle in the shape of the funded debt, or of money, reduced the value of all government securities, and of course of all other securities that had no better guarantee. The depreciation of the government stock in the market was at all times greater than that of bank-notes, as may easily be seen by a reference to prices. According to Dr. Hamilton, whom Sir H. Parnell follows, the debt created between 1775 and 1816 amounted in money to 417,851,8177.: the capital funded was 589,086,2267. This gives but 70l. 19s. 6d. for 100l. of debt. Thus the sole effect of the Bank Restriction Act was to prevent parties holding notes from pre

senting them unadvisedly for payment in gold, which was naturally less practicable then than at present. The act of parliament was supported by the energy of the leading capitalists, or it would have proved a nullity. As it is,-mainly because the views of traders respecting the utility of high rates of profit were then more erroneous than they now are,-the civilized world was saved from a chaos of barbarism by the measure.

In conceding thus much, we do not abandon our view that the adoption at that period of sound trading and currency principles would have effected more good than the restriction. In fact the commercial power that England would have exerted under a system of open competition and fair currency arrangements would have been irresistible, and would have driven Napoleon, or any other disturber of the public peace, from his throne, without expenditure of blood, money and public morality. The lesson has been a severe one; let us hope that it will not have been given in vain.

The national Bank of France, according to its recently published statements, advanced in 1843 only 1,400,000l. on government securities: the rest of its advances were on private securities; but the notes it issued hardly exceeded the amount of bullion in its coffers. This is perfectly natural, in a country where there seems to prevail no idea of maintaining the national supremacy, or even existence, except by arms. A country that premeditates carrying confusion into every quarter of the civilized world on the first favourable opportunity is right to accumulate bullion; it is the only money where credit is destroyed. But even in such a conflict, a nation that possessed the means of preserving its credit but for one year and of keeping its prices low, would have a good chance of emptying its rival's coffers and filling its own. Even in time of war coin must circulate, and it is sure to flow to the lowest level. The advantage of an accumulated treasure of coin is therefore so slight, that we do not recognize the accustomed penetration of our neighbours in their announcement of having achieved a triumph of so dubious a character. It may be, indeed, that they speculate upon the chances of their neighbours not being wiser, or at liberty to act more wisely, than themselves. Of the correctness of this speculation we are more diffident in pronouncing an opinion.

The reports of the national Bank of Austria publish only the extent of the issues on discounted bills. These, as we have seen, amounted in 1837 to 296,553,809 florins, or 29,650,000. ; but as this was the total issue for the year, it gives us little information as to the state of the circulation at any particular time. The advances to government are in the shape of notes issued to convert the depreciated war currency which is now redeemed at the rate of two-fifths of its original value. The issues on this account amounted in 1837 to 137,187,300 florins. When the whole sum is redeemed, the advance will amount to about 16,000,0007. sterling, on which no interest is allowed to the Bank. The privilege of having its notes made a legal tender is the set-off to this, and in a country of such inexhaustible productive powers ought to prove a source of great profit to the Bank.

Prussia has no national bank; but an ambiguous relation subsists between the government and a company called the "See-Handlung," which is very prejudicial to the government credit. The late king, after appointing a commission, bound by solemn oaths to allow of no addition to the national debt after a certain period without an appeal to the nation, finding that loans were occasionally useful, allowed this "See-Handlung" or "Over-Sea Company" to be founded, ostensibly as a trading company, but really with the intention. of using its capital as a loan for which debentures were issued. The paper currency of Prussia,-whether composed of " SeeHandlungs-scheine " or "Tresor-scheine," which are direct issues of exchequer-bills in payment of salaries and for other purposes,-forms therefore the unfunded debt of the country, respecting which no account has ever been published, although it is fair to presume that accounts are kept. On a recent proposal to assimilate the metallic currency of the southern states of the Germanic Confederation to the Prussian dollar, an objection was taken on the ground of the liability to which the south German states would expose themselves of being inundated with Prussian "Tresor-scheine." A compromise was effected by the coinage of silver pieces worth 3 florins, which correspond to the value of two Prussian dollars. But the dreaded influx of paper was not averted by the southern states, in which the dollar-notes of Prussia are often at a pre

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