1836.] 



FARMERS' REGISTER, 



483 



houses, pays it to the Iiispeclor, who gives a ticket 

 lor tile amount. Tlie clerl<s of those houses to 

 wliom money is due, then receive tlie several sums 

 from tiie Inspector, who tal\es fi-om tliem a ticket 

 for the amount. Thus the whole of those pay- 

 ments are made by a double system of balance, 

 a very small amount of bank notes passing ii'oni 

 hand to hand, and scarcely anj' coin. 



It is difficult to form a satisfactory eslimale ol 

 the sums which daily pass through this o|)eration; 

 they fluctuate fi'om t\vo millions, to perhaps fif- 

 teen. About two millions and a half maj' possibly 

 be considered as somclhmg like an average, re- 

 quiring for its adjustment, perhaps £200,003 in 

 bank notes, and £20 in specie. By an agree- 

 ment between the different bankers, all checks 

 Avhich have the name of any firm written across 

 them must pass through the clearing house ; con- 

 sequently, if any such check should be lost, the 

 firm on which it is tlrawn would refuse to pay it 

 at the counter; a circumstance which adds great- 

 ly to the convenience of commerce. 



The advantage of this system is such, that two 

 meetings a day have been recently established — 

 one at twelve, the other at three o'clock ; but the 

 payment of balances takes place once only, at 

 five o'clock. 



If all the private banks kept accounts with the 

 Bank of England, it would be possible to carry 

 on the whole of these transactions with a still 

 smaller quantity' of circulating medium. 



In refiecting on the facility wilia which these 

 vast transactions are accomplished — supposing, for 

 the sake of argument, that they form only the 

 fourth part of the daily transactions of the whole 

 community — it is impossible not to be struck with 

 the importance of interfering as little as possible 

 with their natural adjustment. Each payment 

 indicates a transfer of property made for the bene- 

 fit of both parties ; and, if it vvere possible, which 

 it is not, to place, by legal or other means, some 

 impediment in the way which only amounted to 

 one- eighth per cent., such a species of friction 

 would produce a useless expenditure of nearly 

 lour millions annually : a circumstance which is de- 

 serving the attention of those who doubt the good 

 policy of the expense incurred by using the pre- 

 cious metals (or one portion of the currency of the 

 countr_v. 



One of the most obvious differences between a 

 metallic and a paper circulation is. that the coin can 

 never, by any panic or national danger, be reduced 

 below the value of bullion in other civdized coun- 

 tries ; whilst a paper currency may, fi-om the ac- 

 tion of such causes, totally lose its value. Both 

 metallic and paper money, it is true, may be de- 

 preciated, but with verydifftrent eflects. 



Dcpreciiition of Chin. — The state may issue 

 coin of the same nominal value, but containing 

 only half the original quantity of gold, mixed with 

 some cheap alloy ; but every piece so issued, bears 

 about with it internal evidence of the amount of 

 the depreciation : it is not necessary that every 

 successive proprietor should analyze the new coin; 

 but a few having done so, its intrinsic worth be- 

 comes publicly known. Of course the coin previ- 

 ously in circulation is now more valuable as bul- 

 lion, and quickly disappears. All future purchases 

 adjust themselves to the neu^ standard, and prices 

 are quickly doubled ; but all past contracts also are 

 vitiated, and all persons to whom money is owing, 



if compelled to receive payment in the new coin, 

 are robbed of one half of tlieir debt, which is con- 

 fiscated for the benefit of the debtor. 



Depreciation of Paper. — The depreciation of 

 paper money follows a different course. If, by 

 au}^ act of the govermncnt, paper is ordained to 

 be a legal tender lor debts, and, at the same time, 

 ceases to be exchangeable for coin, those who 

 have occasion to purchase of foreigners, who are 

 not compelled to take the notes, will make some 

 of their payments in gold ; and if the issue of pa- 

 per, unchecked by the power of demanding the 

 •joid it represents, l)e continued, the whole of the 

 coin will soon disap-per. But the public, who are 

 obliged to take the notes, are unable, by any inter- 

 nal evidence, to detect the extent of their depreci- 

 ation ; it varies with the amount in circulation, 

 and may go on till the notes shall be worth li'tle 

 more than the paper on which they are printed. 

 During the. whole of this time every creditor is 

 suffering to an extent which he cannot measure ; 

 and every bargain is rendered uncertain in its 

 advantage, by the continually changing value of 

 the medium through which it is conducted. This 

 calamitous course has actually been run in several 

 countries ; in France it readied nearly its extreme 

 limit during the existence of assignats. We have 

 ourselves experienced some portion of the misery 

 it creates ; but by a return to sounder principles, 

 hfiv^e happily escaped the destruction and ruin 

 which always attend the completion of that ca- 

 reer. 



Every person in a civilized coimtry requires, 

 according to his station in life, the use of a cer- 

 tain quantity of money, to make the ordinary 

 purchases of the articles which he consumes. The 

 same individual pieces of coin, it is true, circulate 

 again and again, in the same district;- the identi- 

 cal piece of silver, received by the workman on 

 Saturday night, passing throuah the hands of the 

 butcher," the baker, and the small tradesman, is, 

 perhaps, s'lven by the latter to the manufacturer 

 in exchange for his check, and is again paid into 

 the hands of the workman at the end of the suc- 

 ceeding week. Any deficiency in this supply of 

 money is attended with considerable inconvenience 

 to all parties. If it be only in the smaller coins, 

 the first eflect is a difficulty in procuring small 

 change ; then a disposition in the shop-keepers to 

 refuse change unless a purchase to a certain 

 amount be made ; and, finally, a premium in mo- 

 ney will be given for changing the larger denomi- 

 nations of coin. 



Thus money itself varies in price, when mea- 

 sured bv other money in larger masses : and this 

 effect takes place whether tlie circulating medium 

 is metallic, or of paper. These efii;cts have con- 

 stantly occurred, and particularly during the late 

 war; and, in order to relieve it, silver tokens lor 

 various sums were issued by the Bank of England. 



The inconvenience and loss arising from a defi- 

 ciency of small money fall with greatest weight 

 on the classes whose means are least; for the 

 wealthier buyers can readily procure credit for 

 their small purchases, until their bill amounts to 

 one of the larger coins. 



As money, when kept in a drawer, produces no- 

 thing, few people, in any situation of life, will 

 keep, either in coin or in notes, more than is im- 

 mediately necessiiry for their use; when, there- 

 fore, there are no profitable modes of employing 



