TRANSACTIONS OP THE SECTIONS. 97 



STATISTICS. 



Some suggestions for an improved system of Currency and Banking. 

 By Francis Bennoch. 

 Having explained the nature of money, and the kinds of money that are, or have 

 been, in existence in England — viz. gold, silver, and copper coins, — bank notes ex- 

 changeable on demand vtrith gold coins at a fixed rate of price in these notes, — and 

 notes in which the gold coins were left free to find their market price, — he showed 

 that gold coins were only legal tender so long as they were of proper weight, and 

 that silver and copper coins could only be considered as tokens, because they were not 

 intrinsically worth what they circulated (or. He then argued that the pound ster- 

 ling had perpetually varied in its metallic value. The gold pound in 1352 weighed 

 360 grains, in 1552 it weighed 174 grains, in 1650 it contained 140 grains, in 1750 

 129 grains, and in 1850 it was only 123 grains. So that the pound sterling in 1850 

 was only one-third the weight it was in 1352. As it had been found necessary to 

 reduce the weight of the sovereign from time to time to bring it to bear a relative 

 value with silver, so now the question would arise, when gold was becoming more 

 abundant, whether we should increase the weight of the sovereign or decrease 

 the weight of the silver. He contended that, inasmuch as our great national debt 

 and every existing contract meant in reality so much weight of gold, it would be 

 most unfair to the debtor classes to increase the weight of the sovereign. Every 

 increase of an eighth to the weight of the sovereign would in reality increase the 

 national debt by one hundred millions of pounds sterling. He next proceeded to 

 show the advantages and disadvantages of our present system, and explained the 

 third kind of money of which this country had some experience from 1797 to 1819. 

 Instead of permitting the Bank of England to issue notes, he would have all issues of 

 legal tender money under the control of Parliament, and that it should be limited to 

 an amount equal to the annual taxation. Instead of the Government issuing, as now. 

 Exchequer bills, on which were issued Bank of England notes, he would recommend 

 the issue of Exchequer notes, which would circulate as money, and finally be received 

 back into the Exchequer in payment of taxes. This money being for State purposes, 

 there might also be a system of commercial money to work in harmony with it. All 

 banks issuing paper should be obliged to place in the hands of the Government, securi- 

 ties which could not be touched so long as a single note was in circulation, and as each 

 note would bear a uniform stamp, indicating its security, there would be abundant 

 faith — runs upon banks would never be made, and panics could seldom, if ever, 

 occur. The object in this discussion was not for the section to consider what money 

 was, but what money ought to be. Should it be value in itself, or the representative 

 of value? A metallic currency could never be depended upon for the due perform- 

 ance of its important functions ; when most needed as money, it was liable to be 

 exported as an article of commerce, or broken up for purposes of manufacture. 

 Under a paper money system properly arranged, such as had been suggested, all 

 sudden changes of value would be avoided, and panics unknown. The essence of 

 money was that it should expand and contract, so as to meet every emergency with- 

 out any violent action. National prosperity would be secured, because our money 

 would have the security of the nation. Growing prosperity meant increase of trade. 

 Increase of trade demanded extended circulation. Every advance in wages, or in 

 the price of commodities, required more money to pay for the same quantity of la- 

 bour or material than had been before necessary. The greater the amount of indus- 

 trial operations, the larger the sum of money required to pay the wages. Under 

 our present system, this necessarily withdrew bullion from the Bank ; reduced the 

 quantity of notes issued ; created financial alarm ; discounts were advanced in rate ; 

 manufacturers and merchants sold their goods at a reduced price to obtain the money 

 needed ; a diminution of production followed, and ultimately mills were closed and 

 hands thrown out of work. So that out of the highest possible prosperity, our 

 system of money managed to manufacture the direst adversity, and through panics 

 to lead to pauperism. Mr. Bennoch concluded by declaring that a metallic 

 currency was merely barter, and that a paper currency, based on national property, 

 was the wisest that could be adopted, inasmuch as it constituted nineteen-twentietbs 

 of our present system ; but that twentieth part had the power to disturb the whole. 

 1853, 7 



