ANTAGONISTIC ANOMALIES. 
 
 INCONVERTIBLE PAPER AND EREE TRADE, 
 FREE TRADE AND BULLION, 
 
 INCONVERTIBLE PAPER AND PROTECTION. 
 
 By ALBERT WILLIAMS, Esq. 
 
 “ 0 cams hominum! 0 quantum cst in rebus inane!" —Persius. 
 
 LONDON: 
 
 JOHN OLLIVIER, 59, PALL MALL. 
 1847._ 
 
BY THE SAME AUTHOR. 
 
 Just Published, price Sixpence, 
 
 TIIE CRISIS AXD THE CRASH; 
 
 A Letter to the Free Traders of England. 
 
TO 
 
 THE FKEE TRADERS OE ENGLAND, 
 
 Gentlemen, 
 
 Let us see wliat economical doctrine will hear 
 the roughest handling. That doctrine will prove to 
 he a bullion currency guarded by protection to British 
 industry. It has at least one merit. It is not 
 anomalous. We do not produce bullion: we acquire 
 it, and therefore it ought to be our common sign of 
 value, and the industry that acquires it ought to be 
 secure of being always profitably employed. Secure 
 that, and you acquire bullion and ensure a sufficient 
 currency. 
 
 Exactly one calendar month ago, I took the 
 liberty of addressing you on the crisis and the crash 
 occasioned by the prevailing influence of what is 
 called Political Economy, and ventured at that time 
 to predict, that unless an immediate and effective 
 arrangement were made to meet the emergency, 
 either the Bank Charter Act must go, or that distress 
 and losses must increase. Failures have continued 
 up to the present time, and the Bank Charter Act is 
 also placed in a more than questionable predicament. 
 It is aclmowdedged by friend and foe that it cannot 
 remain intact, and this circumstance induces me to 
 offer a few observations which may or may not receive 
 consideration at your hands, though as I shall sin¬ 
 cerely endeavour to make truth apparent, I am led to 
 hope that they may. 
 
 Supposing that the Act is to receive amendment, 
 
4 
 
 or alteration, or its final doom, the question arises. 
 What is to be substituted for it? And first I will 
 express a hope that it will not be either a limited or 
 unlimited inconvertible paper-currency, or an imme¬ 
 diate unfixing of the gold standard. Either of these 
 measures would entail a fearful danger upon this 
 country, for whatever it is that we call money must 
 be admitted to be the common sign of value, and 
 nothing ought to be so exempt from variation as that 
 which is the common standard of the nation’s wealth. 
 It is certainly quite obvious, even if we take lor 
 instance that portion of national and individual 
 wealth at present in trade, that trade itself is in its 
 own nature extremely uncertain; and it is more espe¬ 
 cially io be hoped that the recent experience we have 
 had of this truth will operate as a salutary check upon 
 any hasty desire to add a new uncertainty to one 
 which has already been the cause of so much confu¬ 
 sion and disaster. 
 
 And first, the doctrine of an inconvertible paper- 
 currency, whether limited or unlimited, is open to the 
 charge of the greatest uncertainty. One instance 
 may suffice. Xot to treat the subject with levity, by 
 suggesting that the whole of it might explode sub¬ 
 stantially, after the manner of gun-cotton, there are 
 interests of every description, such as shares, stock, 
 debentures, national debt, and other securities, which 
 are certainly not, at present, either money itself or 
 current in the character of money. How is their 
 value to be ascertained? It could only be ascer¬ 
 tained, under a new currency, by experience. An 
 issue of inconvertible paper would in itself be no 
 more a sign of value than the interests which such 
 paper might profess to represent, but if you make it 
 currency and legal tender, then upon the faith of its 
 
5 
 
 sufficiency there would he an enormous expansion of 
 credit, and the mere issue of such paper would (in 
 proportion to its extent) send up the nominal value 
 of these interests to double, ten times, or twenty 
 times, that by which they are at present dealt with. 
 Then would arise the credit system to the height of 
 the value by which these interests might he repre¬ 
 sented in inconvertible paper; and from the nature of 
 things it must happen that both the credit and the 
 paper would vanish as suddenly as they arose, leaving 
 the interests they profess to represent without any 
 defined value at all. For British wealth and British 
 industry ought certainly to be convertible terms, and 
 if you represent them with an inconvertible paper sign 
 it is self-evident that all these interests could not be 
 raised so enormously in price in the first instance, 
 without affording individuals an opportunity of secur¬ 
 ing immense wealth in inconvertible paper. These 
 individuals would then, while the system was swelling, 
 realize that wealth in commodities most enduring and 
 least liable in their nature to depreciation; and when 
 these were monopolized, their real value would un¬ 
 doubtedly become apparent, and a certain collapse 
 of the whole system of paper and credit must inevit¬ 
 ably follow. How this would happen, no one can 
 venture to say. It might happen from a refusal of 
 the monopolizers of real value to trade any longer 
 upon credit. It might be from their having remitted 
 the whole of their monopolized and realized wealth 
 into a foreign country where the inconvertible paper 
 would he of no value whatever; hut I have pointed 
 out what I conceive to be a certain foreseen incon¬ 
 venience arising from a system of paper and credit 
 without a fixed sign of value into which it might be 
 converted, and the experience we have had of the 
 
operation of free trade convinces me tliat foreseen 
 dangers are often less mischievous in their result than 
 those which in any theory, if it he mere theory, gene¬ 
 rally lurk unforeseen. For instance, in July, 1846, 
 the protectionists foresaw that free trade would lead 
 to great fluctuations in prices; hut if they had then 
 said, that in May, 1847, the price of the four-pound 
 loaf would he eleven pence, hut that in October, 1847, 
 it would he five pence, and yet that the commercial 
 and manufacturing classes would he in greater distress 
 in October than in May; and that Exchequer Bills 
 with the interest doubled in May would he sold in 
 October at a great discount, such an announcement 
 would have been received with shouts of free-trade 
 derision. Yet the danger lurked in the free-trade 
 theory—it impended over the nation then, and is at 
 length unhappily realized. 
 
 That there is danger in the doctrine of an incon¬ 
 vertible paper currency must on the fullest considera¬ 
 tion he recognized. If we are to have money at all, 
 that money must he a sign to represent value. Metal 
 seems so obviously made for the purpose, that some 
 nations, as we shall see, adopted it widely when circum¬ 
 stances required that they should not have done so. 
 For us, however, it is the best sign we can have; the 
 most durable and least liable to loss by wear. From 
 amongst the metals, gold and silver should be un¬ 
 doubtedly selected as of most intrinsic value, and 
 therefore more portable than the coarser and more 
 abundant metals, and because from their nature they 
 are more easily reduced to a relative equality of 
 standard. Look to the most barbarous methods of 
 current signs of value, and you find some nations 
 making use of salt, which is always liable to great 
 waste; others, different kinds of merchandise, which 
 
7 
 
 caused them to waste time in equalizing them accord¬ 
 ing to the momentary ideas of the merchants buying 
 and selling. The Grecians at one time used oxen, 
 and the Romans sheep; but how was it possible for 
 one ox to be in all respects of equal value with 
 another, or for one sheep to be exactly of the weight, 
 size, health, age, flavour, and other qualities as its 
 next neighbour? Ho one contends for such currency 
 now; these animals and commodities are, in fact, 
 things signified by our currency, and the thing to 
 be established to meet the requirements of England 
 at the present time is, a sufficient currency and a 
 sound one. 
 
 How, if money be a sign of value, and you issue 
 unlimited inconvertible paper and make it money, it 
 may happen that you will have more signs than things 
 signified, and the whole issue would cease to be money 
 at once, because it could not be ascertained what 
 paper signified anything and what did not. This 
 uncertainty disposes of the doctrine of an unlimited 
 issue of inconvertible paper. 
 
 And if you limit the issue and still make it incon¬ 
 vertible, there is still an uncertainty. For you would 
 fix the limit of the issue by the supposed want or 
 necessity, or by the supposed value of national wealth, 
 or things in trade; and that would be the limit of the 
 issue, or signs of wealth. And as the things signified 
 would then be the national wealth, or things in trade, 
 but would not always remain so, it might very well 
 happen that you would have inconvertible signs signi¬ 
 fying nothing either of wealth or in trade; signifying, 
 perhaps, what had perished or been consumed, or sig¬ 
 nifying something which had yet to become a thing 
 of wealth or in trade, until which time it could not 
 be ascertained what the inconvertible sign might 
 
.signify, unless it signified value; and then it must 
 signify the value of all things of wealth, or things 
 then in trade, which, under a system of fi’ee trade, 
 would he contrary to the nature of sufficiency in a 
 limited issue of inconvertible paper, which could then 
 with propriety only represent itself. And that is an 
 anomaly, because although you might make a law 
 that the proportion of ten to twenty should represent 
 the same value as that of ten to thirty, or ten to six, 
 the law of Mature would annul its operation. A 
 limited issue of inconvertible paper could not therefore 
 sufficiently represent the value of all commodities at 
 all times; the compound ratio of things, value and 
 signs, would forbid it. 
 
 But if all paper be convertible into gold and silver 
 signs, always signifying value, then it is true you may 
 limit the issue of paper by the amount of specie; and 
 if free trade eat up the specie, that is an anomaly 
 which converts free trade into no trade; but the 
 paper always signifies a gold or silver sign of value, 
 the abundance of which will depend on your legis¬ 
 lation, and may be either limited or unlimited, ac¬ 
 cording to the amount of national industry con¬ 
 verted into produce, which is wealth, and may be well 
 represented by metallic signs, if your legislation pro¬ 
 tect both the industry and the currency; and, there¬ 
 fore, to be sound, British wealth and industry, which 
 are themselves convertible terms, ought both to be 
 protected by legislation, and it would follow that both 
 might be well represented by acquired metallic signs. 
 I would especially call attention to the reason why 
 they should be. It is, that we do not produce either 
 gold or silver; and I hope to make it apparent, that 
 if we could produce gold and silver to the same 
 extent we produce paper, that would be a reason why 
 
9 
 
 gold or silver should not be the inconvertible signs of 
 our national wealth. 
 
 The very quality of a sign of value is, that it 
 should he convertible into the value of any commo¬ 
 dity of which it is the sign, hut that it should he 
 neither of the same abundance, nor of the same 
 nature, as the things whose value it represents. Take, 
 for instance, the cases of Spain and Portugal. Their 
 mines were wealth to them at first, hut they ceased 
 to he profitable to them, and why? Because pro¬ 
 duction is a sign, not of production, hut of labour; 
 and here is the whole secret of currency. Looked 
 upon in its true light, there is always an inherent 
 defect in the use of a sign signifying its own nature. 
 For labour is rendered profitable in production, if the 
 produce he a commodity or a sign of labour, but 
 not if the produce be at once commodity produced by 
 native labour, and also a sign of commodity. Profit 
 is then destroyed by the sign instead of being ex¬ 
 tended by the labour, and herein consists a strong 
 ground of argument in favour both of a metallic 
 currency for England, not the produce of English 
 labour, and protection for that currency itself and 
 the industry which, not producing it, secures its pos¬ 
 session. These two countries, Spain and Portugal, 
 are examples. Owning the produce of their mines, 
 that produce ought to have been to them only com¬ 
 modities, but they made signs of these commodities, 
 and ruined their wealth after the following free 
 trade fashion. 
 
 They first drew the metals by labour from their 
 own possessions, aird then made these metals the 
 signs of their wealth. They held possession of the 
 wealth in the mines, but could not prevent the signs 
 from circulating. They continued to draw the metals 
 
10 
 
 and continued to multiply the signs, which they did 
 not retain. But the more they produced the metals, 
 and the more they multiplied and circulated the 
 signs, it followed by the rule of progression, that the 
 less valuable the mines became; because a complete 
 metallic sign became abundant, which represented 
 an unwrought metallic wealth or commodity of its 
 own nature, which could only continue to he pro¬ 
 duced by incessant labour: and when they had by 
 labour doubled their produce of the metal, they had 
 also progressively rendered it by so much less valu¬ 
 able by having made abundant (“' with all the world,”) 
 the metallic signs, which required no laboux - , but only 
 the possession of them, to cause them to represent 
 that wealth for which the nations owning the mines 
 had still to labour. So that by making circulating 
 signs of their wealth to represent that wealth, they 
 laid the foundation of poverty. They laboured, in 
 fact, for those countries which, so to speak, drew 
 their manufactured produce from them in the com¬ 
 plete form of their signs, which representing that 
 wealth for which they themselves had still to labour, 
 the law of nature fixed a limit at which that labour 
 ceased to be profitable, blow this is an argument both 
 against an inconvertible paper currency in England, 
 and also against legislating to encourage an unli¬ 
 mited export of complete signs of national wealth, 
 in the vain hope of recovering more, by labour which 
 then becomes unprofitable. British labour was em¬ 
 ployed profitably when the metallic signs of value 
 were here in abundance, but the loss of the signs has 
 caused unprecedented confusion, which renders labour 
 unprofitable; and if, upon such a state of things, we 
 issue an inconvertible paper currency, the result can 
 only be dimly guessed at, when we recognize the fact. 
 
11 
 
 that paper is a commodity of British manufacture, 
 and that its inconvertibility, either as a sign of things 
 or as a sign of value, will most undoubtedly facilitate 
 a speedy monopoly of all the metals which we do not 
 produce. 
 
 With such a monopoly our foreign trade must 
 cease, for an adverse balance of trade could not he 
 met. The real value of the metals will then become 
 apparent, through the utter inefficiency of inconver¬ 
 tible paper to command their distribution. 
 
 The Emperor of Russia acts as if he understood 
 the value of gold. He works his mines by the labour 
 of captives and convicts, and lends the produce to 
 nations which cannot retain it. If such policy he not 
 counteracted by legislation, he will most undoubtedly 
 have it in his power to break those nations down, not 
 by invasion, hut by debt, payable in gold which they 
 continue to borrow and continue to lose. 
 
 Wishing thoroughly to arrive at that desirable 
 object, a sufficient and sound currency, and not main¬ 
 taining a doctrine merely for the sake of doing so, 
 the question now arises, How can gold and silver, or 
 paper, convertible into these metals, possibly discharge 
 nil existing obligations and liabilities? And the 
 honest answer is, That they cannot do so at one and 
 the same time: but then it must be remembered, that 
 they have in times of prosperity, (by which I mean 
 when we legislated to protect currency and industry,) 
 answered the purpose required of them, which was 
 currency, and that all debts and liabilities are not 
 required to be discharged at the same time. If they 
 were so discharged, there would be an end of com¬ 
 merce and trade—there would he an end of all in¬ 
 come, by destroying the system of paying interest at 
 all, and a whole people must then live upon capital. 
 
12 
 
 In a legal point of new, the whole currency has 
 been based upon a gold standard, not excepting that 
 portion of it based on the Government debt; for the 
 debt was legally payable in currency, and that cur¬ 
 rency was a gold one. The debt, therefore, was as 
 much an obligation to pay in gold as any convertible 
 Bank of England note. Here, however, we are met 
 by the practical difficulty—the gold is not in England 
 either in sufficiency to pay the debt or even to sustain 
 public confidence. Then I contend, that the Govern¬ 
 ment is hound to propose a system of policy that 
 shall bring the gold here and retain it. Under the 
 protective system we possessed gold, if not in suffi¬ 
 ciency to liquidate all claims at one time, at least in 
 sufficiency to sustain public confidence and mercantile 
 credit: and if the gold he gone, the mistake was in 
 legislating, first, to prevent more gold from coming 
 here in balance of trade, and then to send away the 
 gold we had, as free trade has done, and will inevi¬ 
 tably do. It is at length apparent, that the bullion 
 currency cannot exist with what is called free trade, 
 and the only question is, whether to restore protec¬ 
 tion and prosperity, or abandon the bullion currency 
 for a new theory, involving at least a new uncer¬ 
 tainty to all interests whatever. 
 
 I apprehend all that is wanted is, that the cur¬ 
 rency and the several articles of British produce, 
 merchandise and manufacture should bear this rela¬ 
 tion to each other, viz., that those who have one may; 
 if they please, have the other in exchange for it, 
 according to the relative value which the one should 
 properly hear to the other, in respect as well to the 
 intrinsic value of commodities as to the number of 
 signs; and having regard to the taxation to be borne 
 by the community. How I think it clear that as we 
 
13 
 
 do not produce specie, the mining examples above- 
 mentioned teach us that specie ought in our country 
 to represent value, viz., the value of all commodities; 
 that legislation should favour the acquisition and 
 retention of specie in abundance, and that paper 
 should represent, not what it is itself, commodity, 
 but specie as a sign. And if debt be payable in 
 specie, and our recent legislation has rendered specie 
 scarce, and so destroyed paper and credit; why not 
 at once use the national resources at command and 
 make, not bank issues, but government issues of 
 paper based upon public debt, that is to say, public 
 obligation to pay in specie, and then legislate to 
 bring the specie here ? The relief would be instan¬ 
 taneous and permanent, instead of being tardy and 
 doubtful. It would also be legitimate; for the paper 
 so issued would be of a convertible nature, which if 
 made legal tender for a fixed period by proclama¬ 
 tion, might be issued through the bank to be redeemed 
 by the bank with its own lawful issues when the bank 
 had been paid the specie to cancel the obligation of 
 the public. But that would involve the necessity of 
 recovering the gold, and can anything be more appa¬ 
 rent, than that a country indebted in gold is bound 
 to do all in its power to obtain it ? Is it wise, is it 
 honest for a nation to become liable in gold, and then 
 send the gold away, saying “We wish it would go,” 
 and then we will prosper, because we shall have free 
 trade? It seems incredible that while this nation 
 assumes to be at the head of the civilized and mer¬ 
 cantile world, ancl gold is abundant everywhere but 
 here, that we should he unable to obtain or retain a 
 sufficiency of it to carry on or sustain the common 
 transactions of individuals, without being dependent 
 for it upon continental aliens, who become our na- 
 
14 
 
 tional creditors, blowing that as soon as we get the 
 gold it must under the operation of free-trade dis¬ 
 appear for com and other commodities. Tet so it 
 undoubtedly is. The tide of wealth obeying the law 
 of its own nature refuses to hearken to the mandate 
 of the modem Canute. "Will he commit the unheed¬ 
 ing current for its contempt, or will he rebuke his 
 courtiers who flattered him that he might for ever 
 exercise a mighty control by seating himself on the 
 shores of democracy upon the throne of free-trade? 
 
 There is a trite old adage that the effect will 
 cease on the removal of the cause. If then the 
 eanse of the recent confusion be manifest; why not 
 remove it; and instead of applying what is called the 
 •'Bank screw’ to England, apply the British parlia¬ 
 mentary screw to the foreigner? Tou would then 
 quickly recover and certainly retain a sufficiency of 
 gold to sustain the widest currency that ever circu¬ 
 lated; for it should not be forgotten that when the 
 bullion was here there was no want of paper to 
 represent it, and the reason of the Bank Charter Act 
 breaking down is precisely because the converse does 
 not hold good; the bullion gone, the paper disap¬ 
 peared,—the bullion here, there is paper to represent 
 it,—whether it be gold alone, or gold and silver; if 
 the two be made to bear a relative equality—but not 
 otherwise, then let paper be issued upon both by all 
 means. “What I contend for is, that paper ought not 
 to be inconvertible and yet representative; there is 
 danger in such a system which is palpable; and 
 dangers besides which cannot be foreseen for want of 
 experience in its practical working. If we had wisely 
 adjusted the customs duties, instead of repealing 
 them wholesale, whatever gold might necessarily 
 have gone to America woidd have been received 
 
from continental Europe in our own right; and we 
 should neither have seen this horrible crisis, nor have 
 placed ourselves at the mercy of both continents for 
 the means wherewith to meet it. 
 
 Inconvertible paper-currency must be an anomaly, 
 whether under free trade or protection. Gold arrives 
 from the European continent to he invested in the 
 funds. It departs in payment for adverse balances of 
 trade consequent upon our system of free imports. 
 How the funds represent a debt; and when the foreign¬ 
 ers are your creditors for gold, will they take payment 
 in inconvertible paper, either for dividends or capital? 
 If not, then inconvertible paper would not pay either 
 the dividends or the debt; and you would have a sign 
 of value which for all purposes of payment in Eng¬ 
 land (if for any) must be made current by law, but 
 which for some purposes would not be current in fact. 
 
 And if you obliged the national creditors, subjects 
 of the realm, to take this paper, while you paid the 
 foreigner his claim in gold, you would be discharging 
 a debt due to creditors holding the same class of 
 securities with two distinct currencies, giving the pre¬ 
 ference to the foreigner and placing him in a condi¬ 
 tion to receive in gold, (besides his original investment 
 and his dividends,) whatever advance in price the 
 paper-currency might cause in the value of the funds. 
 
 And if the paper were legal tender in England to 
 British subjects, foreigners might acquire that also for 
 their goods and with it make payments for specie. 
 
 Having monopolized your specie by such payments,' 
 they might still be your national creditors for gold 
 invested in consols and monopolized in trade. And 
 they would leave you to raise your taxes and pay your 
 land and sea forces abroad in inconvertible paper. 
 
 Let us then in the name of common sense pro- 
 
16 
 
 tect our industry and our currency with those safe¬ 
 guards which would have made both gradually and 
 sufficiently prosperous; and let us abandon mere 
 theories for honest endeavours to restore that pros¬ 
 perity and public confidence which have been so 
 heedlessly sacrificed. Rest assured, however, that 
 free trade and bullion currency are antagonistic, and 
 that inconvertible paper will not meet an adverse 
 balance under a system of free imports. Rest assured 
 too, that true protection and inconvertible paper are 
 in their nature inconsistent with each other, and let 
 us have restoration. 
 
 Speculative theories are well enough, as such. 
 Reduce them into practice and you have seen the 
 consequences of at least one of them. But mighty 
 preparations are still afoot. The pompous expedition 
 which is to swallow up opposition rather than over¬ 
 come it, is planned. Free trade is yet the order of 
 the day, and the commencement of the great bridge 
 which is to convey the untold millions not across the 
 Hellespont—but the Atlantic, is undertaken. The 
 navigation laws are next to bow beneath the yoke of 
 the victor: and ships by thousands and men in na« 
 tious are economically and breathlessly awaiting the 
 onslaught. Protectionist predictions may meet with 
 tree trade derision, but in spite of derision I will 
 predict. There will be a Themistocles and a storm! 
 perchance a wreck, a battle, and a broken bridge. 
 Shift the scene, and lo, a Salamis! from whence great 
 Xerxes will disappear on the political horizon in a 
 skiff! 
 
 I am, Gentlemen, 
 
 Tour dissentient Fellow-Countryman, 
 Lincolns Inn Fields, ALBERT WILLIAMS. 
 
 .Nor. 1, 1847.