15 



tracts its issues, for it is liable to pay its notes in gold at 3. 

 17s. lO^d. an ounce. Hence money becomes exceedingly 

 scarce, interest rises enormously, prices fall, trade is para- 

 lysed, hoarding begins, panic ensues, and distress and ruin, as 

 in 1825, 1832, 1837, 1839, and 1847, follow (hear). The 

 effect of the panic of 1825 is thus described by Sir James 

 Graham in his Corn and Currency : " Commerce is stagnated, 

 " manufactures suspended ; masters are without money, and 

 " men without employment ; and ruin and insurrection stalk 

 " throughout the land." " I believe," said Mr. Cobden, in 

 nis evidence before a committee of the House of Commons, 

 " greater evils have been occasioned to the trade and manu- 

 " factures of the country in 1836 and 1837, and the subse- 

 " quent periods, by the fluctuations in the currency ; greater 

 " evils pecuniary, social, and moral than by the direct 

 " failures of all the bunks of issue since they were first 

 " established in the country " (hear). The Manchester 

 Chamber of Commerce in 1836 declared that the loss on 

 cotton, wool, silk, linen, and hardware, amounted to forty 

 millions through the Currency Laws. In 1847, the loss to 

 the country, as stated by Mr. Richard Spooner in the House 

 of Commons, was upwards of 250 millions. These ruinous 

 fluctuations and panics would be obviated under a well regu- 

 lated Currency (hear, hear). 



III. But the most important advantage of a Representa- 

 tive Paper Currency is this, that we should obtain a circu- 

 lating medium capable of expansion, a money in which prices 

 would be able to rise as taxes are imposed, so that taxes 

 might be added to the cost of production, and a remunerative 

 price be obtained (hear). And further, as our population in- 

 creased, and our commodities increased also in other words, 

 as our buyers and sellers increased, and the things to be 

 bought and sold increased money, the medium of exchange 

 between man and man, might increase in due proportion. 

 People sometimes ask me why the law which governs or 

 which ought to govern the Currency, cannot be discovered ? 

 It is discovered. " Supply and demand," I say, " is the law of 

 the Currency." As men increase, more food is required, and 

 more clothes are required ; and if left to itself, the supply 

 will increase with the demand. So it is with Money. Make 

 Paper Money as safe as you please make it as safe and secure 

 as gold itself; and this we can prove can be done and then 



