lars, doubloons, pence, shillings, and pounds, were obtained by labour, and bear the honourable denomination of intrinsic money. Does the symbolical or intrinsic species give to the bartering propensity of mankind the more trustworthy guarantee? Fixity of value and credit for currency we demonstrated to be indispensable requisites of the exchangeable medium. Symbolical money will not pledge itself to possess either: from birth it presumes to disregard suspicion. But political economy is not satisfied with complimentary pledges. Value cannot be fixed er credit confirmed so long as the issue of superfluous paper by needy exchequers and hungry engravers suspends mistrust over a nation. And in what manner an effectual control can be placed over these industrious copper-plate printers will perplex the thirtieth century, moral and republican, but still human in its generation. Why are the bills of a reputable merchant accepted? Because it is believed that he has property to back them; and reasonable credit is justifiable on the ground of expedience. But when a crisis brings ruin upon a score of houses, where is the value of their "promise to pay?"-flown with their credit, which alone supported it. Credit, in this case, reposed unworthily upon "an honourable man" and his flimsy bills: in like manner would it unworthily repose upon an honourable government and its flimsy notes. Intrinsic money, on the other hand, having a value equal to the cost of its creation, will Dot recompense the secret fraud of the private er official speculator. A necessitous ministry will be powerless to regulate its issues, which will be accommodated to the natural laws of commerce, being plentiful or scarce as the demand shall strengthen or relax. If the supply whence the circulation is in the first instance obtained be steadily proportioned to the growing wants of an increasing population and an extending business, the value of Honey will preserve the constancy which is inseparable from it. Presuming, for argument's sake, the possibility of a circulation so adjusted, we shall obtain a perfect currencyfixed in value, because no one can manufacture it more cheaply, and because government cannot flood or contract the market at pleasure-established in credit, since no one can refuse a tender essentially valuable, enforced by custom and law. The commercial transactions of civilized people rely upon the system of credit to a vast degree. Trade would be hampered, and judicious speculation wholly checked, if every bargain were struck with cash. The evils of rash credit must not be attributed to the use of money: were barter re-established, it would be found useful-in fact, necessaryto allow debts to stand over; and a debt is still a debt, whether due in goods or coin. If merchants consent to accept their creditors' paper certificates-if tradesmen choose to bandy these certificates-if capitalists will put faith in Spanish honour intrusted to pen and ink-they tempt fortune, wisely it may be or unwisely, yet of their own free will. Paper there always will be, and more and more of it as enlarged connexions and facilitated communications render the employment of it more desirable and more secure. But it would be cruel and most pernicious injustice to compel men against their will to traffic with unsubstantial paper, which might be depreciated at any moment by the fraud of government or individuals. Forgeries now are comparatively rare, because they have to contend with the prudence of those who recognise familiar signatures and intricate designs; but they would be unlimited, if millions of people were compelled to use notes of low amount, whose validity, obviously, they could not ascertain. The We presumed the possibility of adjusting the original supply of intrinsic money to the demand. Since the discovery of America, the quantity of the precious metals obtained from the mines has never exceeded the growing avidity of commerce. Europe may have had less, but certainly she has not had more metallic money than she required. produce of the Californian and Australian fields threatens to disturb the existent equilibrium. Abundance of gold, as of any other commodity, will tend to cheapen it; and until, by the failure of the supply, the price of gold be again permanently settled, the inevitable advance in the price of other articles will cause great perplexity and dispute in the matter of wages, rents, and other payments., Whether parliament could contrive a system by which a progressive accommodation might be effected, is a subject most digressive and difficult. A universally-diffused commerce will, of course, absorb more of the metals than has hitherto been required; but, should and food, and a great deal also for their ships, and carts, and railways, because these things are useful. If they grudge to pay for so useful an article as money, let them do without it, if they can; or try paper, if they choose. the mines be inexhaustible, recourse must be had to silver or platinum; or we may even anticipate that chemistry will compound a substance, expensive, durable, portable, difficult of imitation, possessing all the requisites of intrinsic money. The substitution of gold for a corresponding amount of paper Mr. Harvey hits hard when he asks why a to be withdrawn is inadvisable, for this rea- whole population have turned into grubbers son, that gold is a portion of the commu- and cinder-sifters. Will he describe his pronity's capital, incapable of increase by ger-tection against the forgery of paper? The mination a dead mass; and therefore, however small a quantity exists in a country beyond the need, is so much capital lying at waste. Leaving practical details to the suggestions of the future, and considering the main question in its theoretic principles, we conclude that an intrinsic currency ought to be the basis of a monetary system, because the credit which justifies the employment of symbolical money not universal, nor can it ever become So. The progress of time may abolish nationalities, and thus admit a world-wide reciprocation of paper; but there will never be so complete a reliance upon personal integrity as to render needless the in terrorem enforcement of hard cash. Australian grubbers are, in effect, forgers; but their trick will in time be frustrated by the failure of the gold, the legal supremacy of another metal, or the introduction of a valuable substitute. How will the symbolical mints maintain their credit against skilful imitators? A spurious sovereign can be detected and tested; a spurious five-shilling note will be as good as its better-a pretty bull, but a sad joke. The scheme of enhancing tokens with a labour value by means of Socialist banks is liable to the objections already adduced, and repeated failures have brought it into bad repute. Besides, this scheme cannot be separated from Socialism, the merits of which may be great, but we have nothing to do with them at present. Many considerations connected with our sub The benevolent but obscure intentions of J. H. are not sufficiently developed to be re-ject we have necessarily left untouched, for futed, except by the tenor of a general argument. Money would be cheap enough, and beyond his liking, upon the symbolical system. Fifty million pounds' worth of coined metal, accumulated through many years, is not too expensive for the service it renders, especially if it be indispensable. Englishmen pay a great deal every year for their clothes the ramifications of the question would occupy a treatise. We have simply endeavoured, by a comprehensive and conclusive argument, founded upon the nature of things, to establish the necessary qualities of money; and our conviction stands that a currency ought to possess the foundation of intrinsic value. SYMBOLICAL.-III. THIS discussion will not possess much of interest or importance in the eyes of antibullionists, unless we adopt that strict interpretation of the word money which makes it synonymous with legal tender. It will be known to most of your readers that all money, commonly so called, is not legal tender: that is to say, it is not such an instrument as a debtor can legally compel his creditor to accept in satisfaction of his claims. For instance, copper is not legal tender, neither is silver, above a certain limited amount. Some few years ago paper was legal tender; now gold alone is so. The question we propose to ourselves therefore is, Ought H. T. the legal tender of a country to possess an intrinsic or a representative value? or, in the indefinite original words of the question, "Ought money to be intrinsic or symbolical?" It is a mistake to suppose that it is any part of the necessities of our case entirely to condemn the use of metallic currency. 1 believe that, for the ordinary purposes of trade, we could not propose an advantageous substitute for our present silver and copper coinage. Paper would be impracticable for small sums; wood would be unsafe; and a metallic currency of other than intrinsic value would, in a greater degree than wood, be ex posed to the depredations of coiners. Itherefore prefer copper and silver to any other kind of currency of the same value. After this avowal, then, any wit or wisdom which may be expended in the attempt to prove the impracticability of a representative currency for small values, will be misapplied and expended in vain. At this point, however, my favourable opinion in respect to a metallic currency entirely ceases. Gold money, in every possible form, I consider an unmixed evil. My first charge against money, or legal tender of intrinsic value, is that it is hopelessly insufficient for the supply of our commercial necessities. It is a high estimate to give £40,000,000 as the amount of our present legal tender. And this amount, it must be borne in mind, cannot be so largely extended as to keep pace with our increasing wants. Add to this £40,000,000 of bullion £37,000,000 of notes, the amount of our paper circulation, and we have thus a circulation of £77,000,000, exclusive of purely commercial money. Well, then, if our metallic currency is sufficient for us, we may at once sweep away the whole stock of our paper currency. To do this, however, would be to reduce our circulation nearly one-half; and unless our present cirenlation is really superabundant, in a superabundant degree, the country could no more stand it than it could to have our little island compressed into half its present dimensions. But we may judge, by the light of history, of the probable effects to ourselves of such a reduction in our circulating medium. We had such a contraction of the currency in 1816 and in reference to the panic of that period, "Mr. Lloyd, the eminent banker, deposed before a committee of the House of Commons, in 1819, that the circulation of the country was at its highest in 1813 and 1814, but that it was reduced nearly onehalf in 1816 and 1817. The consequence was a scene of agricultural and monetary distress of unprecedented severity. The total number of bankruptcies in 1815 was 1,285; in 1816 they increased to 2,089, being an addition of fifty-five per cent. in one year. The government became alarmed, and the restriction of cash payments was further extended from July, 1816, to July, 1818. By this means the downward course of industry was promptly stayed. The bankruptcies, which in 1817 were 1,575, were reduced in 1818 to 1,056, being a decrease of thirtythree per cent."* Here, then, we have, as the result of contracting the currency to this extent, an amount of individual distress and ruin indicated by 6,005 bankruptcies in one period of four years. on the Sir James Graham has stated, authority of the most competent judges," that "the losses sustained at that period by individuals, counterbalanced all the profits of all the bankers during the war." From this we may judge of our probable condition were we to reduce the circulation to any considerable extent, as we should do were we to discard our "worthless rags." But if any further evidence were necessary to prove that any amount of metallic money we can command would be totally insufficient for the supply of our monetary necessities, it is supplied by Sir Robert Peel himself. In the bill which he introduced, in 1846, he gave to the Bank of England an issue in notes of £20,000,000; to the country banks, £8,000,000; to the Scotch, £6,000,000; and to the Irish, £3,000,000: £37,000,000 in all: thirty-one millions of which rest upon no metallic basis whatever! Are we not, then, justified in our strong condemnation of an intrinsic legal tender, when we see the "apostle of bullionism," in remodelling our monetary system, providing for a circulation of £31,000,000 of "flimsies?" Our next charge against money possessing intrinsic value is, that it has a natural tendency to create those disastrous commercial. panics which in previous years have brought this country to the very verge of revolution. There are but two ways in which gold coin can be made available for purposes of currency. The first is, to make the coin of any size and weight, simply affixing to it a mark to indicate its weight and fineness, and leaving its value to be determined by the current price of gold in the market. But it will be seen at once that this system could not be carried out, on account of the vast amount of trouble and inconvenience to which it would give rise. The other way is, to make the coin of some definite weight and fineness, and to give it a fixed denominational value, at which it shall be current throughout the kingdom. But, it is also quite obvious here, that, in * Duncan's "Letters on Monetary Science." order to give the coin a definite and fixed value, the price of gold itself, in the market, must also be fixed; otherwise the plan would offer a premium to private speculators to take advantage of the fluctuations of the market, and to derive a considerable profit by a brisk, though clandestine, competition with the mint. And it will also be quite evident, that the price so fixed must necessarily be a low one, else, being higher than that of neighbouring countries, the evil just noticed would not be obviated, while that of smuggling would be added to it. But supposing, however, these two points to be gained, we should then possess a gold currency which would possess the apparent double advantage of not being subject to any fluctuation in value, and of being current every where within the limits of the United Kingdom. Now, most of your readers will have discovered that we have sketched the precise plan adopted with reference to our present gold coinage; and, I suppose, many of them will think that, by its adoption, we, as a nation, have advanced a considerable way towards perfection in monetary science. But let us now see how the system works. A time of national prosperity is a time when the bulk of the population is employed at good wages, and, consequently, of high prices and large profits. Now at such a time it must necessarily happen that gold, being tied down by law to a certain dead-level price, cannot participate in the general rise of prices; and it therefore becomes the cheapest commodity we have. Under these circumstances, then, we are visited by the foreign merchant, and gold being to him not simply money, but a commodity, and, as such, the cheapest in our markets, he naturally takes it away in preference to anything else. This causes a drain of the metal from the country, which would be nothing were it simply gold; but being the sole legal tender of the country, it becomes of serious consequence. The first effect is to cause a ruincus competition in trade, and ruinous discounts at the bankers: in a short time follows the panic; banks are besieged; bankruptcies become ominously frequent; and then the full tide of consternation and misery rolls over the nation, under the effects of which it lies for the time prostrate and helpless. There is nothing of imagination or of exaggeration in this statement of the results of the system under notice. It is not a "sketch by fancy drawn," but a fair transcript from the page of English history. We have already presented one piece of evidence respecting these effects, and we now offer another illustration of the same truth. "It was We wish to impress upon our readers that this memorable panic (1825) arose solely from the want of a single commodity, gold. All other commodities were plentiful. The prosperity of the country is attested by the speech from the throne in that year (1825). "There was literally a whole population," says Mr. Francis,* "with food in abundance staring them in the face, unable to procure it, as nothing but gold would be taken." "Many a firm, of unimpeachable honour and unquestionable solvency, was compelled to bend before the storm. It was remarkable that the question would soon be, not Who goes? but Who stands?" stated that the distress arose from want of confidence in men able to pay 40s. 50s. and 60s. in the pound. The officers of the mint were ordered to coin sovereigns with all possible dispatch; they worked night and day: during the space of a week 150,000 were manufactured every twenty-four hours. But this activity did not stay the panic, or remove the pressure; and the reason is obvious. The sovereigns were still kept down to their mint price, and being cheaper than other commodities, were exported as fast as they were coined. The measure did not help British subjects, but enriched foreigners."+ Now we ask, in conclusion, would or could these things have happened had we had a legal tender of representative money? We say, No. Foreigners would have had no inducement to abstract our paper money, which to them would be "worthless rags:" and while we were allowed to retain our instrument of exchange, we should also have received the enhanced price of our goods: because, evidently, the foreign merchant would have to make his election between our goods and our gold; and, if he chose the latter, being paid in paper for the goods which he sold, he would have to buy it at its market price. But, as it would, at that price, be of less service to him, as a merchant, than manufactured goods, he would most certainly "History of the Bank of England," vol. ii. chap. i. +Duncan's" Letters on Monetary Science," p.5. have taken the latter, and thus would have country, instead of impoverishing and ruinhelped to promote the prosperity of the ing it. IRENE. Social Economy. WOULD COMMUNISM PROMOTE THE HAPPINESS OF MAN ? NEGATIVE ARTICLE.-VI. By the term Communism, I understand that principle which would render the earth and all it contains all its productions, whether animal, vegetable, or mineral, and the labour expended on such productions-as the common property of the human family. It advocates equality of labour, and equality of the profits of such labour; that the wisdom of the philosopher and the folly of the clown are both equally the property of the Community; and both are to be rewarded, not ia proportion to the merit of each, or the good respectively done, but each is to receive a like share of the blessings of this life. And here we may ask, at the outset, Is it exsistent with human nature for the philosopher to wish that the profits of his study should be shared by the illiterate? No; the industrious person would not wish the wages of his labour to be distributed amongst every idler, who had not contributed at all to such labour. Yet this is what the Communists wish. They would have the industrious and the lazy, the wise man and the fool, the learned and the unlearned, the philoso pher and the clown, all placed on the same footing. What form the great inducements to labour? The fear of want is, perhaps, the first motive. Yet, by the principles of Communism that fear would be taken away. A person would know that he need not exert his power, for he would partake equally of the general profits, whether his talent were used or not. He would see that if he were the most industrious, skilful, and cunning workman, that he would receive no greater remuneration than the idlest and most stupid member The of the community. Another inducement to labour is the desire of acquiring property. Yet the Communist would take away this, by depriving a man of the possession of anything that was not necessary to his actual and present wants. What, then, would be the effect of Communism? Would it not create idleness, the greatest of all evils? The progress of literature, science, and art would be immediately stopped, and, as F. F. remarks, we should soon become "a mere food, clothes, and shelter-producing community." community would not consent to support the astronomer, the traveller, and the mechanic for a lifetime in return for the chance of their discovering a new planet, a new land, or a new piece of machinery. But suppose some were supported in order to study in each different department of science, while others were condemned to the performance of manual labour. Is it possible to suppose that all would be satisfied with the department of business allotted to them? One man's work would be easier than another's. All would be discontented, all would be grumbling. Truly this would make a wonderful exhibition of "a HAPPY family" of Communists. Suppose all were employed in mere manual labour. Then I would put the question before proposed by F. F.: If one man can produce in ten hours that which takes another fifteen, how are they to be treated? Are both to work the same time? If so, would not this cause great dissatisfaction? Besides, one man would fancy that he performed more than his share, while a lazy fellow, a thorough Communist, would be idling away his time, knowing that whether he worked much or little, there was an equal share of the profits for him. I should like very much to see how the advocates of Communism would have affairs managed. should like an epitome of what they would I |