TRACT No. m.] THE LIVERPOOL CUEIENCY K,EFORM ASSOCIATION. Committee; CHAULES f^AND, Esq., Chairmax, EDWARD BRADLEY, Esq. J. M. BRAGA, Esq. NATHANIEL COX, Esq. JOHN DORNING, Esq. JAjMKS HARVEY, Esq. G. B. JOHNSON, Esq. RICHARD ROWLINSON, Esq. JAMES RYDER, Esq. EDWARD WELCH, Esq. THOMAS WILLEY, Esq. HENRY WOOD, Esq. LIVERPOOL: PRINTED BY LACE AND ADDISON, STANDARD OEFICE, 4, ST. GEORGE’S CRESCENT. 1849. LIVERPOOL CURRENCY REFORM ASSOCIATION. No. 3. The gnaiest sourcs of spontaneons flnciuations in tliis country, and the most dklurling power, is the talue of the precious metals. It is alw-tts changing. Thirty years since a soyereign represented only half as much of the necessaries, comforts and Inxnries of life as it novr does; and its yalue has since been con- tiniially on the increase.—Times, September 22, 1819. There can hardly be a more emphatic condemnation of our monetary system than that expressed in the ahoye quotation. The ■nriter eTidemly points to Sir E. Peel’s BiE of 1819 as the cause of the fluctuations in yalue lyhich hare dming that period disarranged the commerce and paralysed the industry of this country. It does not require much penetratiou to pereciye that if the soyereign,— i. e. our money or legal tender,.—has doubled in yalue in the last tliirty years, our nationid burthens must hare also doubled yyithin the same period—a fact \yhich is sufficient to account for the prevailing and increasingly uneasy feeling that prevades the public mind, arising from the aggrayated weight of taxation, now crushing the energies of the people, and which feeling is showing itself in the loud and general cry for Financial Keform. But how paltry and insignificant must any excess in public expenditure appear when contrasted with the annual loss inflicted upon the commerce and industry of the country by a monetary system, the basis of which is “ ahoays changing in value," and, consequently, continually disturbing the relation between debtor and creditor ? Although any extravagance in public expenditure, and waste of national resources, must be deprecated by all, yet any attempt at reform in matters of detail must prove, futile as long as the main grievance, “ the great disturbing power" remains untouched. The further and more energetic influence of a money based on a “metaUie formula” in arresting the progress of industry, and in curtailing the remunerative profit of the merchant and manufacturer. must here be only alluded to. The Liverpool Currency Reform As¬ sociation would earnestly entreat the commercial community to give their attention to this most vital question, which lies at the root of the all-pervading discontent, and social disarrangement which we see around us; and to give a careful perusal to the following able ARTICLE FROM THE LIVERPOOL STANDARD, OCT. 23. Conversions upon the subject of our Monetary System are going- on at a great rate. As if by one consent, the various interests of the country are turning their regards in this direction, as containing the cause of the non-fulfilment of their e.vpectations of approaching prosperity; and the admissions, made by some of these, are widely different from the opinions formerly propounded by them with almost oracular dogmatism. The following appeared, a few days since, in a leader of the once violent bullionist, the London Times, on the subject of the present prospect of the Railway Share Market: “The greatest source of spontaneous fluctuations in tliis country, and the most disturbing power, is the value of tlie precious metals. It is alwavs changing. Thirty years since a sovereign represented only half as mucli of the necessaries, comforts, and lu.\uries of life as it now does; and its value has since been continually on the increase.” Wliat a splendid standard of value that gold must be, which is the greatest “disturbing power,” and which is “always changing” ! “ Thirty years since” (says our contemporary,) “a sovereign repre¬ sented only half as much of the necessaries, comforts, and lu-xuries of life as it now does.” A black look out this has proved to tax¬ payers, mortgagufs, and persons with encumbered properties ; and a pleasant one to annuitants, mortgagees, and such people as her Majesty’s Ministers! “Its value,” our contemporary adds, “ has since been continually on the iucrease.” Taking averages of years, so it has; but it lias also jumped up and down with surprising irregularify. It was worth, for instance, a third more in October, 1847, than in January in the same year. Yet this is our unerring standard, by the viJne of wliieh every monetary engagement in this great commercial country must be measured; and wLoever bad ventured to impugne which, the Times, a few months ago, would have regarded as madmen or knaves ! 4 Another great bulhonist authority—the young Peelite Chronicle — thus spoke of it no later than in December last:—" Now in this country gold is the standard; it has been adopted, because it has proved to be Zm to fluctuation than any other commodity” We leave the two doctors to settle their differences upon this point as they can. The Times, however, sees now a prospect of a movement in the opposite direction. The value of the sovereign—or rather it should be said of the legal pound —^is about to be gradually reduced. “ Looting,” he says, “ to the various probabilities of the question, and with the &ct of a whole American State being now actively employed over an immense territory in the snccessfnl search of gold, we incline to the opinion that gold will henceforth suffer a gradual, though slow, depreciation. That, of course, has a most important bearing on the question between fixed and fluctuating dividends. Should there be such a depreciation, guaranteed shares will press less and less on the profits, which will of course vary according to the general wealth of the country, and not be tied to a metallic formula.” A surprising facility truly our contemporary possesses in the dis¬ covery of encouraging circumstances for his friends ! A sovereign is about to decrease in value to 15s., ergo a man who has given 100 sovereigns, at their present value, for a railway share paying eight per cent., out of which he has to pay a guaranteed sum of three sovereigns, is benefitted by that three sovereigns becoming worth three times fifteen shillings. What, however, are the remaining five sovereigns worth ? Why just five times fifteen shillings. What is the share itself worth, stiU earning eight per cent, and paying three f Why just a hundred times fifteen shillings, or five-and-twenty per cent., measured in commodities, less than it cost! This is certainly no very consoling state of things. In conclusion, we are glad of the confession that fixed incomes now are “tied to a metallic for¬ mula.” We rather imagine that every sort of income is in this pre¬ dicament—“tied to a metallic formida;” and we should rather not be thus tied. We observe too that Mr. Hamer Stansfield, a prominent mem- her of the League, has discovered that Free Trade is not worth I having, without having as well “ free trade in money.” Mr. Stans" i field conceives that his party have begun at the wrong end; and has propounded his views in a pamphlet, which contains an ap- proach, at least, to correct principles. We shall be glad to see him pursue his enquiries further; and, in the mean time, rejoice that he is disposed to give honour to whom'honour is due for the discovery which he has already made. In his introductory letter he thus addresses the members of the Liverpool Currency Reform Association :— “ Gentlemen,— I am glad of this opportunity of expressing my obligations to you, for calling the attention of tlie mercantile community to the all important question of the currency," &c. And he concludes his pamphlet by saying:— " Wc trust tliat the Liverpool Currency Reform Association, to whom the credit j3 due of first organizing themselves, and hoisting the standard of currency reformi will nevcrstrike their flag until they have attained theirobject. They have assumed an honourable and responsible position! but have a good cause in hand, and right eventually will overcome might," Our contemporary, the Morning Herald, also, in a series of very able letters, signed “ Justitia,” has lately been doing good service to the cause. On Tuesday last, the writer offers the following remarks upon the relative positions of the Banks of France aud England, the former of which, by a well-regulated paper currency, was enabled to sustain the commercial classes of a country involved in the tur¬ moil of a revolution ; whilst the latter threw the whole commercial fabric of Great Britain into suffering and ruin, aud herself only escaped insolvency by suspending the boasted monetary laws of Sir Robert Peel. “ The revolutions of the years 1848-9, if they have done no other good, have taught one practical lesson, which oUr statesmen, if wise, ought not to overlook, and that is the relative position of the Banks of England and France. “ By the operation of the English banking laws, under the acts of 1819 and 1844, all notes must bo paid in gold on presentation. So that, whenever we run short of food, or the foreign exchanges rule against us, and gold is sent out of the country, the money in circulation—that is, the notes—must be restricted, the value of money almost doubled thereby; merchants must curtail their exportations for want of ac¬ commodation, and their stocks must be depreciated, mills closed, railway and aU other undertakings suspended, for want of extended or cheap credit; all incomes curtailed from trade or speculation ; and many thousands of the industrious classes thrown ont of employment; and all for the imaginary benefit of securing payment for notes in gold on demand; and yet on three different occasions the Bank of Eng¬ land has been so closely pressed for gold, that, had it not been for the interference of government, the directors of the Bank of England would not have been in a position to pay more than a twentieth part of their notes in circulation in gold or “ If your readers will turn back to my letters in the Morning Herald, of August 2 and 8, and September 8 and 12, they will there perceive, from facts stated on. authority, that by the provisional government of Franco passing an ordinance restricting the payment of notes into coin on demand, a greater security has been 6 given to the holders of the notes issued by the Bank of France than at any previoiij period, for the notes nowin circulation, and the bnlUon and coin in the coffers of the bank, are nearly equivalent. That is to say, they have precious metals sufficient to pay all their notes in circulation, which the Bank of England has never yet been in a position to do. And for this gratifying circumstance the French are indebted to a well regulated paper corrency, which has given employment to the artisan, and permiHed the tmmvfactUTer to send abroad his goods, to bring back to France other produce or manufactures, or the value in gold or silver coin, or other pre¬ cious metals or commodities. “ When the Bank of England, as in ISt7, should have been in a posilion to give a stimulus to trade, by a cheap and full currency, the reverse teas the case, and British labour was suspended, to the ruin of capitalists and employers of every Let ns prove the correctness of the statement, which we have marked in italics, hy onr exports, at the period mentioned, to a single country—the United States of America. In 18-46, we had become large importers of American grain, &c., of which the natural restdt would have been, had we been permitted to pay for such grain, in manufactured goods, that we should have increased our exportations. Our gold, however, was in that year the cheapest commodity for exi'ort; and whilst it was rapidly drawn from us, contracting onr currency, causing the operations of the merchant and manufacturer to be suspended, and the labourer to be driven to the verge of famine, we were enabled to export of the two great staples of the cotton manufacture—plain calicoes and printed and dy^ calicoes—only 10,640,009 yards of the former, and 13,ii.56,509 yards of the latter. In 1847 we were again large importers of American grain, in payment of which gold continued to be drawn from ns, until, in October, the bank had to suspend cash payments, and the prices of every commodity had fallen ruinously. What wms the operation which ensued ? It was this. Gold had appreciated in this country. It was matter of life and death to us to procure a supply, in order to restore our circulating medium ; and to get that supply, we had to export, in 1847, at the ruinous sacrifices which American holders were enabled to wring from us, 41,519,244 yards of plain calicoes, and 44,425,017 yards of printed and dyed calicoes! Had we, like France, possessed at this time an expansive and well- regnlated domestic currency, nothing of this kind could have, by any possibility, occurred. The total exports would have been pretty eqn^y spread over the two years; and the drain of specie, the contraction of our medium of exchange, with their fearful conse¬ quences, would not have taken place, to an extent to interfere at all with the commercial and industrial occupations of the country. A fortnight ago, our readers may remember, we showed the mis¬ apprehension of the working of our monetary laws contained in the project mooted hy Jilr. Disraeli to the agriculturists at Aylesbury, for producing “cheap capital (!)” for the landed interest, by an increase of the land tax to £5,000,000 a year, and the application of that sum to form a sinking fund for the liquidation of the national debt. We contended that it was not “ cheap capital^^ which the agriculturists wanted, but “cheap money;” that cheap money meant, in reality, an abundant supply of legal tender; that such supply must not be liable to constant fluctuations; and that none of these desiderata could be secured by Mr. Disraeli’s plan, or, at all, under our present metallic system. We are glad to find a very able writer in the Morning Post, under the signature of “ Observer,” rebuking the bon. member’s implied sanction of that system, and directing the attention of the community to the fact that, in a very great measure, the monetary laws of 1819 and 1844 have been the inducing causes of the distress and suffering, past and present, of the agricultural interest. “ We have had,” says this writer,” “sineethe passing of the bill of 1819, periods of prosperity and adversity. From 1819 to 1823 we had a contracted currency and distress. From 1823 to 1825 we had an abundant currency and prosperity. From 1826 to 1833 we had a contracted currency and distress. From 1834 to 1837 we had monev plentiful, and the people employed and prosperous. From 1837 to 1843 we had the circulation restricted, and all the productive classes in a state of suffering. In 1844, 1845, and 1849, the currency was again abundant, and prosperity again returned; and we are now once more enduring the consequences of a contraction of the circulation.” During one of these periods of depression, which was most severe upon the agriculturists,—in 1830—the writer shows that petitions and memorials were presented to the legislature from nearly every portion of the empire; and that the universal opinion expressed was that the sufferings of the farmer had been mainly caused by the act of 1819, whicli increased the burthens of taxation and the pressm’e of all fixed payment.^, whilst it reduced enormously wages, profits, and the prices of produce and commodities. We perfectly coincide with the Post's correspondent, and these petitioners, as to the effect of our recent monetary policy upon their condition; and we would strenuously urge upon the friends of the agriculturists, and of every branch of the native industry, to devote themselves to an inquiry into this most important subject. In conclusion, we must, with Mr. Hamer Stansfield, offer our humble meed of congratulation to the Liverpool Currency Reform Association, upon the success which is at length rewarchng their meritorious efforts. The straw is at length moving. The golden idol of the economist, beneath whose feet the commerce and industry of the nation have so long been trampled, totters already upon its pedestal. Its advocates no longer flout us as maniacs or revile us as robbers and revolutionists in disguise. We have already diiven them from redoubt to redoubt, and even taken some of their strong¬ holds. We have wrung from one of themselves what will serve as an answer to the question of the great buUionist leader, “ what is a “ pound ?” It is a measure of value which “is always changing!” Tliirty years since it represented only half as much as it now does ; and its value has since been continually on the increase !!” We have made engagements to pay a pound, for which we are now paying in labour and commodities forty shillings ; and we are making fur¬ ther engagements, of which we are told we shall be asked only to pay about one-half. Surely sensible men cannot much longer tolerate a monetary system so obviously dishonest, and so notoriously accom¬ panied by alternations of mania, wild speculation, social robbery, and commercial and industrial prostration ! The admission on the part of the Times, that the value of the precious metals is always changing, seemed to the Association too important to be passed over. They consequently wrote a letter, which, however, was not replied to, nor even inserted. The Asso¬ ciation then had recourse to the columns of the Horning Herald, .and beg to acknowledge the prompt insertion of the following :— TO THE BBITOR OF THE HORNING HERALD. Sir, —The following short question, suggested by the signifioant and ominous article on our present imperfect money, was sent to the Editor of the who has not inserted it. As it bears on the most important feature of the most important question of the day, we hope you will give it publicity. I remain. Sir, your obedient servant, On behalf of the Committee of the Liverpool Gurreney Eeform Association, J.AAIES HARVEY, Liverpool, 9th Oct., 1819. Hon. Sec. TO THE EDITOR OF THE TIUEH, Sir, —We quote the following from your article of the 22d instant;— “The greatest source of spontaneous fluctuation in this country, and the great disturbing power is the value of the precious metals. It is always changing.” We beg to ask you the following question :— If the precious metals ai'e confessedly so liable to these fluctuations—if their value be always changing—are they fit to perform the functions of a money, the great desideratum of which is steadiness of value ? An answer wfll oblige Tour’s respectftdly. On behalf of the Commiteee of the Liverpool Currency Reform Association, JAilES HARVEY, Hon. Sec. Liverpool, 27th Sept., 1849.